2013ANNUAL REPORT

The Institute of Asset Management

Who are we? Our Vision: To be recognised as the leading, international, professional body for asset management

The IAM is a not-for-profit membership organisation that exists to advance for the public benefit the science and practice of asset management.

Our priorities are to promote and enable the generation and application of knowledge, training and good practice, and to help individuals become demonstrably competent.

Our current focus is to create and provide tools and resources. Firstly, to help people gain the knowledge and understanding to implement asset management in their organisations. Secondly, to help organisations check their current performance, choose their destination and then make progress towards it. These are the ‘Individual and Corporate Journeys’ we now recognise and want to support.

Our Enduring Objectives are:

• Collect / Collate / Disseminate existing knowledge and good practice • Generate and extend knowledge and good practices • Influence public policy and stakeholder expectations • Promote capability and excellence in asset owning organisations or their suppliers and structured schemes for recognising these achievements • Promote knowledge and competence of individuals and structured schemes for recognising these achievements • Deliver Member publications, engagement and networking opportunities and other valuable Member Services • Raise profile and respect for IAM and the profession • Collaborate with and support other bodies having similar objectives • Develop and maintain an appropriate and sustainable organisation

We welcome the support of both organisations and individuals who want to join us in developing this exciting discipline. By becoming a Member, you can demonstrate your support and show colleagues or clients and suppliers your commitment to the principles and practice of asset management for business benefit.

If you’re not already a member, why not join us now?

3

Contents

04 An introduction by the President

05 Financial results

07 Membership

08 Professionalisingthe discipline

10 IAM Examinations

11 The year ahead

As another year draws to a close, so does my tenure as President of the Institute. I find myself reflecting not only on another hugely successful year for the IAM but also on the three years of my Presidency and nine years on Board. And what an exciting - and hugely rewarding - journey it has been!

The highlight of the year was the long anticipated publication of ISO55000 and its launch in London in February. Some people saw the creation of this new international standard as diluting the IAM’s stature and influence, which came from PAS55 published in 2004. But in proposing the development of the new international standard, we recognised that there were examples of leading practice in other parts of the world that would enhance the work we had started with PAS55.

Our mission, as a learned society, is to further the discipline of asset management for the benefit, not only of our members, but for the wider community. A significant contribution was made by a number of our individual and corporate members, who worked closely with our international partners. We should be rightly proud of the leading role we took in the development of ISO55000 and its subsequent adoption by many of the leading companies across the world.

The other highlight of the year, and of my Presidency, is the successful first year of exams. Although there were some delays, whilst we learnt from early pilots and further refined the examinations, the successful launch of the Certificate and Diploma is an important step on the road to professionalising the discipline. I am very grateful for the support and diligence of the Examination Board and the newly formed Examination Committee.

It is only when we stop and look back on the year’s activities that we can appreciate just how much has been going on and what we have achieved. Landscape 2 and Anatomy 2 have arrived, and the new Self-Assessment Methodology (SAM) for use with both PAS55 and ISO55000 has recently been launched. The SSGs, whilst slightly delayed owing to our desire to collaborate with our GFMAM colleagues, are now ramping up.

We spent a lot of time this year reviewing our membership structure to ensure we continue to support both the individual and corporate journeys. This is already beginning to bear fruit as we see the number of new members increase; a thriving NxtGen - and now NxtGenPlus - community; an expanding Patrons group; and new UK Branches and international Chapters.

When I was elected President in 2011 I was fortunate to inherit an Institute that was in good health and was seen by many across the world as the reference point for Asset Management thinking. I hope that, with the many dedicated volunteers and staff of the IAM, I have helped to guide the Institute to being recognised across the world as the leading asset management authority. With over half our members resident outside of the UK I am proud that the Institute can rightly claim to be the international Asset Management body.

As a volunteer organisation our aspirations are only limited by the willingness of our members to become active! To all those volunteers: thank you, on behalf of the Board, for your valuable contribution to the Institute and the discipline of Asset Management. We should be proud of what we have collectively achieved in our journey to date and be excited by the possibilities that lie ahead. If we can achieve all this in our first 20 years, just think what we can all achieve together in the next 20!

Stephen Morris

4

‘If we can achieve all this in our first 20 years, think what we can all achieve together in the next 20!’

An introduction by the President

5

Financial ResultsThis is the first complete year of trading since moving to a calendar financial year. Calendar FYs simplify some of our book-keeping and allow more time to consolidate figures from our Chapters and Branches between January and our AGM.

We have also completed the separation of our Membership Business from our Knowledge Business. Although this is largely a back office issue, the principles are important.

Our aim is to keep the cost of membership to a minimum. Your subscriptions now pay only for membership services, including professional development and the magazine. All our projects, publishing, events, training and examinations are now priced to make a commercial margin to reinvest in knowledge activities – with significant discounts for members, of course.

The last two years have been complex owing to several unusual factors, including the significant membership restructuring – still in hand at the end of 2013.

Our turnover is now too big to use true ‘cash accounting’ but our accounting policy is to treat subscriptions in this way. We do not assume members will re-join simply because they exist. Invoices for Individual Subscriptions are now raised in the ledger only when we receive the cash. This avoids creating debtors and keeps the income in the right financial year.

This is not so easy with Corporate Subscriptions because invoices have to be raised and sometimes these sums are received several weeks or even months later. (We have just introduced a discount for prompt payment and we hope this will reduce late payments as it did for Individuals.) So when this process spans the financial year end, we need to make manual adjustments to present a clear picture.

The directors are pleased to report a clean audit report. The opinion of the auditor (Dunkley’s) was that the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities, of the state of the Institute’s affairs as at 31 December 2013.

Dunkley’s have prepared the Balance Sheet and P&L summaries for Members because the best way to review our income and expenditure is consolidated figures. The Institute now has several wholly-owned trading companies: IAM Trading Ltd, IAM Learning Ltd and IAM Chapters Ltd to carry out our activities in the most convenient and tax-efficient manner. The Institute of Asset Management Ltd makes donations to fund the operations of subsidiary companies.

Notes to the Balance Sheet: a. 2012 Debtors have been adjusted – see Note d in the Profit & Loss account 2013 Debtors include:- £46,356 trade debtors in Trading; £4,145 of 2013 membership fees paid late; £6,900 deposit paid on offices; £7,994 VAT awaited / due back b. Creditors include:- £13,9176 Trade creditors; £4,804 PAYE & National Insurance due to HMRC; £13,570 accruals c. The 2012 loss is explained in the commentary

CONSOLIDATED BALANCE SHEETYear Ending31 Dec 13

Period Ending 31 Dec 12

Companies House

Period Ending31 Dec 12

Annual ReportNotes £ £ £ £ £ £

Fixed Assets 31,882 45,641 45,641Current AssetsStocks 17,459 26,764 26,764Debtors a 65,396 74,816 172,816Cash at bank 331,080 248,090 248,090

413,935 349,670 447,670CreditorsAmounts falling due within 1 year b 157,550 129,071 129,071

TOTAL ASSETS LESS CURRENT LIABILITIES 288,267 266,240 364,240

RESERVESOpening Balance 266,240 328,830 328,830Net surplus / (deficit) for year c 22,027 (62,590) 35,410

Closing Balance 288,267 266,240 364,240

6

Notes

Unfortunately, a number of 2014 renewals were delayed by the membership changes. Much of our corporate income is received in January so this has required quite a lot of unravelling! This is why the result now shows a small loss in this extraordinary 9-month period.

We have shown, for comparison, the corrected figures for the 9 month period reported at last AGM. Essentially we have reduced the apparent income by £98k, removing assumed income (amounts invoiced but not yet paid) and the debtors – and moved some of it into the correct membership year.

We believe that this is a better baseline for comparisons in future years. Our new accounting arrangements will give Members a better understanding of the IAM’s activities in future, especially as we ramp up our non-Membership businesses (events etc).

Notes to the Profit & Loss Account: d. Member subscriptions were overstated in last year’s Report to Members (as were debtors – see Note a to Balance Sheet). This has been rectified as explained in the text on Page 5. e. Includes £15,000 donated to Chapters for start up f. We expect magazine costs to reduce following membership restructuring g. PAS55 sales have reduced, as expected, owing to the impending ISO55000 h. Although there was a loss in 2012, you can see from Total Assets and Cash at Bank that the Institute remains healthy - this accounting policy adjustment is a better and more cautious reflection of member renewals and recruitment income in any financial year.

CONSOLIDATED PROFIT AND LOSS ACCOUNTYear Ending31 Dec 13

Period Ending 31 Dec 12

Companies House

Year Ending31 Dec 12

Annual Report

Not

es

£ £ £ £ £ £

MEMBERSHIPMembership fees received

d 315,979 195,364 293,364

Membership services e (14,400) 377 377

Assets (journal costs) f (85,825) (77,609) (77,609)

215,754 118,132 216,132

EVENTS

Event income 237,839 123,069 123,069

Cost of events (173,339) (84,727) (84,727)

64,500 38,342 38,342

PUBLICATIONS

Sales income g 22,442 64,078 64,078

Cost of sales (11,498) (27,408) (27,408)

10,944 36,670 36,670

ENDORSED PROVIDER SCHEMES

Endorsed Assessors 55,062 38,061 38,061

Endorsed Trainers 60,960 21,177 21,177

116,022 59,238 59,238

PROJECTS

Projects income 46,487 359 359

Projects costs (45,501) (38,713) (38,713)

986 (38,354) (38,354)

OVERHEADS & ADMINISTRATIONRent and office services (255,054) (159,988) (159,988)

Post, stationery and expenses (5,998) (5,193) (5,193)

Web site and computer costs (55,752) (38,030) (38,030)

Affiliation fees (18,357) (21,273) (21,273)

Accountancy (2,177) (7,748) (7,748)Legal & professional fees (500) (675) (675)

Net bank charges (9,608) (4,261) (4,261)

Depreciation of website development (38,733) (39,450) (39,450)

(386,179) (276,618) (276,618)

SURPLUS/(DEFICIT) FOR YEAR h 22,027 (62,590) 35,410

MembershipUnderstanding and drawing meaning from the graphs above is somewhat subjective. The final numbers are still emerging from the restructuring of our membership categories. We are very pleased that so many members have supported us by joining as individual members; and that, although the consultation process took longer than planned, the response has been overwhelmingly positive.

There is now wide consensus that we now have the right long-term structure and that making entry requirements more demanding for MIAM and FIAM was essential. Membership Committee will be opening up the opportunity of application for FIAM during 2014.

As ever, looking to the future, we can be impressed and reassured by the fast-growing NxtGen and NxtGenPlus community. These are the Members who will achieve our Mission by improving the management of assets everywhere. We shall continue to foster and support this exciting interest and activity wherever possible.

It is vital that we remain relevant. The involvement of respected industrial and commercial organisations as well as government and others is the touchstone for checking what we are doing. Last year, our Senior Patrons briefing event drew a warm response and this is now a feature of the autumn calendar. We want to add greater and greater value to our Global Partners, Patrons, sponsors and exhibitors and, of course Corporate Members.

7

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

2010 2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Apr

200018001600140012001000800600400200

0

2010 2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Mar

Linked in Affiliates

Paying Members Corporates (inc Patrons) Corporate Nominees

LinkedIn and Affiliate Members

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

2010 2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Apr

200018001600140012001000800600400200

0

2010 2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Mar

Linked in Affiliates

Paying Members Corporates (inc Patrons) Corporate Nominees

Paying Memberships

Paying Members include: Fellows, Members, Associates, Students. Corporate Nominee Membership ceased in the first half of 2014.

8

Professionalising the DisciplineThe Corporate Journey There is no question that the Corporate Journey has been dominated by the arrival of ISO55000. The transition from using PAS55 to ISO55001 will loom large in the minds of many: when / why / do we want to / what is the significance? On the other hand, we also have increasingly the recognition that the management system is vital, but is not sufficient on its own.

We are delighted that PAM has been replaced by SAM (Self-Assessment Methodology) and that the same tool now handles either standard as well as being much improved. This is one of the resources we provide for Corporate Members. You may be aware that we helped produce the specification1 for the knowledge and understanding of asset management required to be a good auditor.

This emphasis on personal competence and expertise has its reflection in the maturity and excellence of asset management practices in an organisation. We are planning to issue guidance on what this means and looks like in a variety of organisation, based on our recent Green Paper and a project just starting.

Our focus, now that the Standard is an ISO, is to support Corporate Members with resources, tools, information and training to help them not only make progress on their Journey but also decide how far it is valuable for them to become excellent.

The SSGs are starting to be published and we also envisage more case study material and ‘how to’ documents and possibly seminars and training. We would be interested to hear from anyone with strong views. We think the new Chapters will offer opportunity for sharing cross-sector and producing pragmatic and practical advice.

We have not made as much progress as hoped on asset management practices in the service sector but this work is still in hand. We think it is relevant not only for service providers but for their clients to know how to manage the interface and outsource effectively for the long term.

With regard to our Academic community, we are preparing guidance on designing qualifications at degree or MBA level and we hope this will help increase the available choice and quantity on offer to potential students.

More than anything else, we shall continue to take the lead from our Patrons and Corporate Members to ensure that the work we do is valuable and relevant.

1. GFMAM Competence Specification for an ISO 55001 Asset Management System Assessor / Auditor - see www.theIAM.org/AuditorSpec https://theiam.org/knowledge/ISO55000-Auditor-Assessor-Specification

9

The Individual JourneyWe have a clear vision of the Individual Journey but there is a lot that still needs to be developed and put in place. Essentially, we need to define the target for a professional asset manager and the criteria for recognising this – and then help newcomers form a personal development plan and support them to get there. This IPD and the following CPD programme need to be the basis for the material and events we offer Members.

Instead of disappointment that new members must start as ‘Associates’, we need to make sure everyone recognises the meaning and value of MIAM and wants to become evidently capable of admission to that grade, and then FIAM. We now have the more rigorous requirements and procedures for admission to each category (see page 7) and we are introducing a pilot Professional Development structure in conjunction with NxtGenPlus. Our long-term strategy is to offer Chartered Asset Manager and we have started the scoping project for this already.

NxtGen The IAM’s Next Generation initiative celebrates its second birthday this July, but there is further need for celebration – as we launch NxtGenPlus.

NxtGen is an informal community providing knowledge-sharing and social events for those new to asset management and, since its launch, membership has grown to over 4,000 members across 111 countries.

The inaugural 2013 IAM awards featured a NxtGen award dedicated to those who are new to the discipline and saw an influx of nominations for exceptional candidates from across the world. We were delighted to announce the winner, Laurie-ann Smith (of PEME), and runners up Ross Scott (of SKM)

and Augusto Siguero (of Ferrovial) at the IET/IAM Conference in November.

Why the need for NxtGenPlus? The growth of the NxtGen reflects the development of asset management into new areas of business, new industries and geographies and illustrates there is a growing appetite to learn and develop within the community. To address this desire for development, the IAM is introducing its approach to professional development - including NxtGenPlus, which is the IAM’s programme to support individual professional development towards asset management competence and professional qualifications.

Who is NxtGen Plus for? NxtGenPlus is for Associate and Student members wishing to progress their asset management career, whether a student, a professional joining from another business area or someone in the early stages of their career.

NxtGenPlus is designed to act as a stepping stone between NxtGen and full membership of the IAM (MIAM), providing initial professional development that dovetails with the IAM’s wider approach to Professional Development. What does NxtGenPlus offer? NxtGenPlus has launched its mentoring scheme, which pairs NxtGenPlus members with experienced members of the IAM (MIAM) to support their individual development journeys. NxtGenPlus will also be facilitating a number of workshops and events, such as its Asset Management Anatomy workshop and Onsite Insight visits, aimed at improving knowledge and application of asset management.

The launch of NxtGenPlus is a step forward in the IAM’s own development and is a fundamental part of the future of asset management.

For more information visit www.theIAM.org/NxtGenPlus Danielle Humphrey eAsset Management

Presentation of the 2013 IAM NxtGen Award. L-R: Laurie-ann Smith (NxtGen Award winner), Sam Chew (NxtGen Committee member), Stephen Morris (IAM President), Ross Scott (NxtGen Award runner up), Augusto Siguero (NxtGen Award runner up)

As reported in previous years and this Annual Report, the IAM is focused on supporting and recognising personal development and competence. A crucial part of this strategy is evidence of knowledge and understanding – hence the Qualifications project.

The IAM Certificate and Diploma examinations were first made available, in January 2013 and June 2013 respectively, as a test of Asset Management

knowledge and its application. As expected, most candidates have tackled the Certificate but we have been delighted by the sheer numbers (and

broad international coverage earlier than expected); sessions have been held in Australia, Canada, Dubai, Ireland, Malaysia, Oman, The Netherlands

and United Kingdom.

10

IAM Examinations

Examination Board

The IAM established the Examination

Board in 2013 to provide oversight

and governance of the examinations,

and to ensure they remain a fair

and robust test of Asset Managers. The Examination Board is

independent of the IAM commercial organisation ensuring the

quality of the examination is the sole focus of those responsible for

its governance. As its independent Chairman, Chris Knowles reports

directly to the IAM President.

The Examinations Board includes a Chief Examiner, Dr Steven Male

and currently four other members. An Examination Committee,

chaired by the Chief Examiner, is responsible to the Examinations

Board for the questions set, the review of results and the ongoing

quality of the examinations. This team of volunteers has, both

individually and collectively, significant practical asset management

expertise coupled with the academic teaching and assessment skills.

Examination Board Members and affiliations:- Professor Celso

de Azevedo, Assetsman (France); Dr. Charles Johnson, CAS; Chris

Knowles, Lloyd’s Register, Dr Steven Male, Independent; Colin Porter,

IRSE; Steve Wyton, City of Calgary (Canada).

Many improvements have been made during the pilot phase, both to

content and procedures. The question sets have been reviewed and

improved, particularly where candidate feedback indicated ambiguity

or other problems; there is an ongoing question bank programme; and

an effective process to review and validate results is in place, which will

allow more certainty in advising candidates of the outcome.

Both the Certificate and the Diploma have become a significant test

of Asset Management knowledge. We appreciate that those who

have not achieved a ‘pass’ may be disappointed but it is important

that these achievements are a significant test and earn respect

widely. We are looking at the commercial aspects again and we are

considering discounted re-sit pricing to encourage candidates. We

are also developing pricing to make these challenges attractive to

NxtGenPlus members.

The achievement of this first phase of the IAM’s Qualifications is

an important milestone for the IAM and for the profession. We

are most grateful to all concerned with the IAM Qualifications, in

particular to Chris Knowles for his leadership and diligence (the task

we set him was much more onerous than promised!). But everyone

who contributes is valued, whether for a single question or for

working so hard on the Exam Committee or exam Board. Thank you

all, most sincerely.

Chris Knowles, Chairman

I think the IAM can

be very proud of the

role we have played

in establishing the

discipline of Asset

Management over

the last 20 years.

As we look forward

into our 21st year, the outlook is certainly very

different from when the IAM started. We now

have a defined discipline, an international

standard, international consensus on the

Asset Management Landscape, new education

opportunities from a range of sources and our

own qualifications in Asset Management – and

‘early adopters’ have already demonstrated

benefit.

There is ever-growing demand for guidance on

how to ‘do’ Asset Management. The IAM has

an extremely important role to play here – both

for the corporate and individual member – and

whether beginning or well-advanced on this

journey.

It is important that ISO 55001 assessments and

certifications are undertaken by organisations

that truly understand Asset Management

and we will soon require EA Assessors to

demonstrate that their personnel meet a

minimum knowledge and understanding

requirement.

There is growing interest in maturity and

excellence in Asset Management, and what

‘excellence’ means for individual organisations.

We recently published a Green Paper on this

subject and we are starting a pilot project

to describe the various stages of maturity.

Based on this work, a new project will publish

guidelines on Asset Management maturity and

how to assess it across the 39 Subjects.

For the Individual Journey, we are introducing

formal IPD / CPD arrangements and there

is more about NxtGenPlus, an exciting new

initiative on page 9. NxtGenPlus dovetails

with the IAM’s wider approach to professional

development (and working towards becoming

a Chartered Institute) and is a fundamental part

of the future of the IAM.

We shall respond to growing demand by

increasing the number of Certificate and

Diploma exams over the coming year, wherever

the demand is strongest. We shall launch

foundation level IAM training courses, both

open and in-company, delivered by approved

trainers; while our Endorsed Training Providers

address the more experienced market.

There are also internal challenges to address as

the Institute grows to deliver the ever growing

demands placed upon it: how we encourage

participation of members wherever they are;

how the new Chapters can engage fully in the

work of the Institute; matching IAM resources

to the increasing activity level; and we need to

ensure we are running our own business affairs

responsibly and sustainably.

These are just a few highlights from a very

ambitious plan. I am very excited about the

coming year and I very much look forward to

working with you in taking the IAM forward to

achieve our ambitions.

Richard Edwards Deputy President

The Year Ahead

“I think the IAM can be very proud of the role we have played in establishing the discipline of

Asset Management over the last 20 years… and I very much look forward to working with you

in taking the IAM forward to achieve our ambitions.”

GFMAM Competence Specification for an ISO 55001 Asset Management System Assessor/Auditor - see www.theIAM.org/AuditorSpec

Institute of Asset Management

St. Brandon’s House,

29 Great George Street,

Bristol, BS1 5QT

United Kingdom

T. +44 (0) 8454 560 565

E. office@theIAM.org

www.theIAM.org

Registered Office: Woodlands Grange, Woodlands Lane, Bradley Stoke, Bristol, BS32 4JY

Design: Bob Design and Marketing www.meetbob.co.uk

The Institute of Asset Management