The members present their annual report and financial statements for the year ended 31 March 2025.
The principal activity of the limited liability partnership (LLP) is that of a financial planning and investment management business.
The LLP has achieved a turnover of £2.06m in the current year compared to £1.98m in the prior year. From this profits of £580k were generated in the current year compared to £609k in the prior year.
The LLP's compliance monitoring procedures are designed around risks considered to be relevant to the LLP. These are updated annually through a process taking input from senior management, the board and suitably qualified external consultants. The compliance monitoring process also highlights the processes in place which are designed to mitigate any identified risks.
Risk management and mitigation measures are reviewed and where appropriate modified according to need. The LLP's risk position is monitored by the board.
The risks facing the LLP are identified and considered both from the perspective of the likelihood of their occurring and from the perspective of their potential impact on the LLP should they occur. This includes the current economic uncertainty caused by high interest rates and stubborn service level inflation. The board are continuously assessing the situation and taking precautions as necessary to ensure the risk is mitigated as well as possible.
The LLP also considers risks relevant to the Internal Capital Adequacy Risk Assessment Process (ICARA) as detailed in the ICARA document. The implication of the LLP's risk management plan and the consequences of any review of the plan are fed into the ICARA process. The LLP's risk management approach reflects the FCA requirement that it must manage a number of different categories of risk. These categories of risk include liquidity, credit, market, interest rate, business and operational risks as described further below:
Liquidity risk
The LLP manages all cash and working capital requirements to ensure there are sufficient liquid resources to meet the operational needs of the business whilst adhering to the credit terms set by suppliers. As covered in note 1.2 to the financial statements, this is supported through the annual budgeting process including the analysis of forecast future cash flows taking into account the potential impact on the business of possible subsequent events.
Credit risk
Credit control is an important function which requires assessment, on an ongoing basis, of the recoverability of amounts due from debtors. Where recovery is in doubt, management will adequately provide against this specific debt and will arrive at such conclusions based on the knowledge of the debtor whilst adopting a prudent approach to credit control. With that said, a large proportion of the LLP's income arises from regular management fees which are based upon a percentage of client assets under management. These fees are recovered directly from client portfolios which is facilitated through the financial institution in which the assets are held. Moreover, where this is not the case, the LLP's clients are typically long-standing with a low risk profile in relation to recoverability issues.
Market risk
The LLP does not directly own any listed investments or other financial instruments, and has minimal risk in relation to currency fluctuations operationally. The LLP is however indirectly impacted by market risk as fee income, as noted under credit risk, is correlated with the value of client assets under management. This is managed by ensuring client portfolios are sufficiently diversified so as to mitigate market volatility where possible, and from the LLPs fee structure with minimum fee levels set so as to provide a sustainable income level during market downturns and protect the long-term viability of the business.
Interest rate risk
The LLPs has minimal direct exposure to interest rate risk with no external borrowings in place and no direct reliance placed upon cash interest. The LLP is indirectly exposed to interest rate fluctuations through its impact on the financial markets which is covered above under market risk.
Business risk
Business risk stems from a few key areas, the first being a significant drop in the markets which results in a downturn in fee income through client assets under management. This is partially mitigated as noted in market risk through the LLP's implementation of minimum fee levels. The second key area is the loss of key staff and advisors resulting in difficulties managing workload which is mitigated through working practices instilled by the business to improve staff wellbeing and staff retention. Thirdly, there is the risk that system failures were to result in loss of data or an inability to service client needs which is mitigated through the implementation of disaster recovery plans and system back-ups.
Operational risk
The key operational risk identified is that of reputational risk and the possibility of this being damaged through poor client satisfaction, erroneous advice being provided, issues with key regulators, or other external factors. This is mitigated where possible by ensuring compliance with the laws and regulations applicable to the business, the timely resolution of client disputes, the internal controls in place within the business, and the monitoring of external influences.
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so the retiring members are repaid their capital at "par".
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Blackadders Wealth Management LLP (the 'limited liability partnership') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the balance sheet, the reconciliation of members' interests, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
Other information
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the limited liability partnership has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management informed us that there were no instances of known, suspected or alleged fraud;
We obtained an understanding of the legal and regulatory frameworks applicable to the limited liability partnership. We determined that the following were most relevant: FCA regulations; Data Protection Act 2018; Anti Money Laundering regulations; employment law (including payroll and pension regulations), and compliance with the UK Companies Act;
We considered the incentives and opportunities that exist in the limited liability partnership, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly; and
Using our knowledge of the limited liability partnership, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Enquiry of members about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of those charged with governance;
Reviewing quarterly FCA returns, the LLP's current authorisation status with the FCA, and external compliance assessments in relation to FCA compliance;
Review for instances of non-compliance with Anti Money Laundering regulations;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular the valuation of work in progress, and the estimation of accruals; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Owing to the inherent limitations of an audit, there is unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
Use of our report
This report is made solely to the limited liability partnership's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the limited liability partnership's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the limited liability partnership and the limited liability partnership's members as a body, for our audit work, for this report, or for the opinions we have formed.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
Members' capital ranks after unsecured creditors and other debts due to members rank pari passu with unsecured creditors in the event of a winding up. The amount of capital each member is required to subscribe is determined by Blackadders Wealth Management LLP's Management Board provided that the level at all times satisfies the regulatory capital requirements of the Financial Conduct Authority. Under the LLP Agreement, a member can withdraw capital when he or she either ceases to be a member or with the agreement of the Management Board.
Blackadders Wealth Management LLP is a limited liability partnership incorporated in Scotland. The registered office is 10 Euclid Crescent, Dundee, DD1 1AG.
The limited liability partnership's principal activities are disclosed in the Members' Report.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention.The principal accounting policies adopted are set out below.
The financial statements have been prepared on a going concern basis. The Members have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. In response to the current economic outlook, the Members have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from high interest rates and stubborn service level inflation. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.
Based on these assessments and having regard to the resources available to the entity, the Members have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and accounts.
Services provided during the year to clients, which at the balance sheet date have not yet been billed, are recognised as turnover. Turnover is recognised by reference to an assessment of the fair value of the services provided at the balance sheet date as a proportion of the total value of the engagement. No revenue is recognised for unbilled amounts on client engagements where the right to receive consideration is contingent on factors outside the partnership's control. Work in progress on such client engagements is valued at the lower of cost and net realisable value. Amounts to be billed to clients are included in debtors.
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
The LLPs classifies distributions of profit under financing activities within the cash flow statement.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
At each reporting period end date, the limited liability partnership reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the limited liability partnership estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Cash and cash equivalents include cash in hand and deposits held at call with banks.
The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the limited liability partnership after deducting all of its liabilities.
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
As part of the year end process members are required to assess the ongoing performance of work in progress. This assessment results in the recognition of income and provisions against ongoing recovery depending on the degree of completion and the likelihood of a fee being raised. These judgements are made using the members' experience as well as a detailed working knowledge of the work being provided to clients.
Management estimate the requirements for accruals using post year end information and information available from detailed budgets. This identifies costs and income that are expected to be incurred or received for services provided by and to other parties. Accruals are only released when there is a reasonable expectation that these costs will not be invoiced in the future.
An analysis of the limited liability partnership's turnover is as follows:
The average number of persons (excluding members) employed by the partnership during the year was:
Their aggregate remuneration comprised:
The total remuneration of employees and members who are considered key management personnel in the year was £447,433 (2024 - £369,549).
Profits are shared among the members after the end of the year in accordance with agreed profit sharing arrangements and include interest on members' funds. Members are required to make their own provision for pensions from their profit shares.
The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.
Members' capital ranks after unsecured creditors and other debts due to members rank pari passu with unsecured creditors in the event of a winding up. The amount of capital each member is required to subscribe is determined by Blackadders Wealth Management LLP's Management Board provided that the level at all times satisfies the regulatory capital requirements of the Financial Conduct Authority. Under the LLP Agreement, a member can withdraw capital when he or she either ceases to be a member or with the agreement of the Management Board.
The Bank of Scotland Plc have a floating charge over the assets and undertakings of Blackadders Wealth Management LLP as security over loans held within Blackadders LLP.
During the year, Blackadders Wealth Management LLP paid rent of £12,000 (2024 - £12,000) to Blackadders LLP, a limited liability partnership with common members. The closing balance with Blackadders LLP was a net debtor of £77,593 (2024 - £92,848 debtor).
Members of Blackadders Wealth Management also received discounts on management fees and investment advice during the year with a total value of £2,452 (2024 - £1,787)