The Institute of Asset Management

Annual ReportApril 2011 - March 2012

Our Mission 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 mission is to: raise awareness of the existing knowledge base generate growth in the knowledge base disseminate knowledge influence public policy and industry practice deliver valuable services to our members manage a robust, sustainable organisation.

We welcome the support of either organisations or 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. Join us today!

3

Contents

0405070910

An introduction by the President

Last year

Membership and financial results

Values for members

The year ahead

On my first anniversary, it is good to review what progress we have made in delivering the activities I outlined last year.

In keeping with our Knowledge objectives, we published the ‘Anatomy’ and made it freely available to everyone. This will be a valuable companion to PAS55 (and the upcoming ISO5500). I am also delighted that work has started on producing the first of 39 Subject Specific Guidelines.

We also prepared the groundwork for the launch of our AM Certificates and Diplomas. This represents a significant investment for the Institute and will, I believe, prove to be as ground breaking and important as PAS55 was back in 2004.

Whilst we celebrate many successes, we must also recognise a few activities have been slower than we would like. Your Institute is ambitious in pushing the boundaries of Asset Management thinking and is aspirational in the delivery of tangible benefits to members. But as a volunteer organisation we must recognise that we have limited resources.

Whilst the web portal is now in place the Knowledge Centre has not yet developed as we would have wished. This is now a key activity: please help populate it with case studies, asset management knowledge and active discussion threads.

In looking forward to another exciting year, I want to thank all of you who have made such a valuable contribution this year. I am very confident that, with the support of an increasingly active membership, we can continue to deliver a growing Institute and help further the development of Asset Management as a maturing yet business-critical discipline.

4

… with the support of

an increasingly active

membership, we can continue

to deliver a growing Institute

and further the development

of Asset Management as

a maturing yet business

critical discipline.

Stephen Morris

An introduction by the President

Membership and Financial Results

2007

2008

2009

2010

2011

Corporate(inc. Patrons)

A�liates

Corporate Nominees

Paying Members

2012

232356 360

561 602675

387706

1,123708

1,570

3,273

44 44 6487

128

201

2007

2008

2009

2010

2011

Corporate(inc. Patrons)

A�liates

Corporate Nominees

Paying Members

2012

232356 360

561 602675

387706

1,123708

1,570

3,273

44 44 6487

128

201

5

Last year we explained our plans for further significant investment but a mixture of project slippage and unexpected growth has enabled us to return a positive bottom line. We shall continue to use Members’ funds as effectively and as economically as possible but we shall not attempt to create bigger reserves as we believe your cash should be utilised not simply held.

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 March 2012.

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 has a wholly-owned trading company (IAM Trading Ltd) to carry out our activities in the most tax-efficient manner. The CLG (The Institute of Asset Management Ltd) makes donations to fund Trading’s operations.

Notes to the Balance Sheeta. Primarily outstanding member subscriptions.b. 2011 was unusual (2010 figure was £103,064)

We are glad to report continuing growth – without marketing - in all categories of membership, despite the difficulties of the severe recession. We are revising our Membership categories and reviewing the subscription levels in line with our new business model. Basically, subscriptions need to cover membership services: whilst our Knowledge activities (for example, events, publishing and competence / qualifications need to be self-funding).

We anticipate that this may cause a temporary reduction in membership next year but we realise that there is no value in a large but inactive membership – we aim to give both Individuals and Corporates value by becoming engaged. As we move towards becoming a true qualifying body, we anticipate the number of Individual Members will rise as people working in asset management wish to gain recognition for their competence – and show that they have committed to Continuing Professional Development.

Corporate Nominees will remain the method by which Corporate Members gain value and these appointments will continue to be free of competence requirements.

The extraordinary rise in Affiliates may indicate only that people wish to obtain the knowledge we offer free of charge – but we shall encourage them to migrate to other categories of membership when they feel ready.

CONSOLIDATED BALANCE SHEET31 Mar 2012

31 Mar 2011

Notes £ £ £ £Fixed Assets a 56,651 69,893Current AssetsStocks 10,138 27,304Debtors b 132,291 102,277Cash at bank 220,003 374,742

362,432 504,323Current LiabilitiesAmounts falling due within 1 year 90,253 264,060

TOTAL ASSETS LESS CURRENT LIABILITIES 328,830 310,156RESERVESOpening Balance 310,156 332,003Net surplus for year 18,674 (21,847)Closing Balance 328,830 310,156

6

We managed to make significant progress with our website in the last year. Previously there were serious problems (for users of Internet Explorer 6, for example). We have changed our website supplier and this has been very successful. Not only have the bugs been fixed but the speed and responsiveness of the website has been greatly enhanced.

The new wiki based knowledge centre has also been redesigned and we shall be developing activity in this area during the next year. We hope that this will be a natural partner with our increasing online and social networking activities.

We have been extending our direct self-service facilities both to existing Members and applicants. Members can now pay their subscriptions; order services and products; adjust personal preferences and review/print their own receipts.

The new Member application arrangements are also fully online. Applicants can complete forms and also upload evidence and our Membership Committee is able to review this material and exchange comments with the applicants without any paper involved. We hope to introduce this also for Corporate applications very soon.

We welcomed Michael Jones to our Bristol Office last year as Technical Services Manager and we are planning to recruit more help next year to support the increasing scale of the whole Institute, for example, the new IAM Qualifications.

In order to support our knowledge activities, we are introducing a Register of Expertise. This will allow Members to record their own particular area of knowledge so that when we are looking for peer review or original participation in projects we can invite relevant people to participate. We hope this will be another incentive for Members to engage with the work of the Institute and set off on the path of increasing expertise that can be recognised.

Notes to the Profit & Loss Account: a. Last year included old overdue subscriptions (2010 figure was £210,485)b. Increasing attendance despite pricing policy c. Negotiated trailing payment contracts make costs in any one year unrepresentative.d. Endorsed Provider Schemes are designed to break even over time; initially loss-making. e. Work on Qualification products

CONSOLIDATED PROFIT AND LOSS ACCOUNT31 Mar 2012

31 Mar 2011

Notes £ £ £ £MEMBERSHIPMembership fees received a 340,134 423,595

Membership services (267) 0

Assets (journal costs) (66,138) (62,422)

273,729 361,173EVENTSEvent income 109,941 55,609Cost of events (63,271) (53,006)

b 46,670 (2,603)PUBLICATIONSSales income 65,326 46,661Cost of sales (34,013) (68,040)

c 31,313 (21,379)

ENDORSED PROVIDER SCHEMESEndorsed Assessors 32,132 9,258Endorsed Trainers 6,651 (4,812)

d 38,783 4,446

PROJECTSProjects income 0 0Projects costs (38,296) (24,088)

e (38,296) (24,088)

OVERHEADS & ADMINISTRATIONRent and office services (196,117) (203,490)Post, stationery and expenses (4,041) (17,039)

Web site and computer costs (33,024) (20,483)

Affiliation fees (19,403) (11,725)Accountancy (14,412) (12,855)Legal & professional fees (6,324) (24,230)

Net bank charges (6,369) (7,066)Depreciation of website development (53,835) (47,714)

(333,525) (344,602)

SURPLUS/(DEFICIT) FOR YEAR 18,674 (21,847)

7

“We are delighted to say that,

at the time of writing, there are

already many volunteers engaged

in new knowledge projects.”

Last year Faculty is the Committee which co-ordinates all the technical work of the Institute. This formed last year and has been putting a structured approach in place to developing and presenting more knowledge. We are delighted to say that, at the time of writing, there are already many volunteers engaged in new knowledge projects.

Council has also made a start on mobilising volunteers amongst the membership to resource the standing Committees of the Institute. These are the real engine room of the Institute and it is very important that we get even more people involved if we are going to support our aims.

We are delighted that the Global Forum on Maintenance and Asset Management is turning out to be a very productive Forum. Last year there was international agreement on the definition of the scope of the discipline and a document was issued called ‘The Landscape of Asset Management’. An important aspect of this work was to agree where the boundary of asset management lies and to identify a focus for our joint work.

The IAM has already agreed to collaborate with Abraman in Brazil and we are delighted that PAS55 is now available in Portuguese. We are very excited about this International work and we are looking forward to new initiatives to develop competence and training courses in Brazil.

In fact it is very interesting that, despite the well-known progress with ISO55000, there is increasing demand for PAS55 in various translations. Last year we translated PAS55 into Portuguese, Chinese and French – and, of course, we already offer it in Spanish.

The IAM has maintained its commitment to the development of ISO55000. We look forward to its publication in 2013 and we are indebted to the efforts of a number of our members for their input. We continue to encourage participation by more and more countries and there are now 26 participating countries and 11 observers.

Institute of Asset ManagementLinkedIn Membership

Sept 2008 May 2012

500

1000

1500

2000

2500

3000

Sept 2008 May 2012

Another major achievement last year was the publication of the IAM’s Anatomy of Asset Management. This was provided free of charge to download from our website as part of our obligation to non-members as a learned society. It has proved to be very popular and large numbers are now in circulation. We intend to revise and improve it in the coming year and then hope that it will remain stable for the next year or two.

As well as the reported increase in membership, there is increasing activity on our new LinkedIn group (where there were well over 2,500 members at the end of this financial year). This interest and the large increase in IAM Affiliates and Registrants is very promising for not only the discipline but the success of your Institute.

We are developing plans to link more actively the knowledge created in various events with our Knowledge Centre. We are also looking to link events and training with our project work. It is notable that we participated through the joint TPN in running a European event in Brussels last year and we are talking to various commercial event providers about provisions of events to Members who live in far flung parts of the world.

Another challenge we have is how to support Members properly in distant places (and time zones). We already have some embryonic Chapters and we also wish to foster collaboration with sister bodies. This means we need to develop not only electronic means of support but also events and Chapters where they are needed.

The website will be developed to provide pages dedicated to such groups, in languages other than English if there is the enthusiasm for this. In terms of establishing Chapters we are deliberately open to collaboration with all kinds of existing membership bodies or starting such organisations where there are none.

8

“Council has also made

a start on mobilising

volunteers amongst

the membership to

resource the standing

Committees of the

Institute. These are the

real engine room of

the Institute.”

9

Value for MembersA key focus of the strategic review was the value proposition for Members. We are in the process of identifying what Members of various categories need and want and putting plans in place to improve our current offerings. Three of our active members give us their feedback here about what the IAM offers.

Our focus now is ‘the Journey’ both for Individuals and also Corporates, with a view to producing ‘how to’ publications; competence, qualifications and professional development support. We are also working on how to improve the benefits we provide to overseas members and to enable their active involvement in Council, Patrons Group and our numerous projects and initiatives.

Daniel Pairon, KPMG, Brussels As a global network of professional firms providing Audit, Tax, Advisory and Accountancy services, we are proud to be working with the IAM. In our daily activities, we notice a gap between the financial/accounting and technical/operational worlds. We have enhanced PAS55 for our audit work and, thanks to our involvement in the IAM, we have developed an understanding of the concerns of engineers and persuaded them to appreciate ours.

On the one hand, we translate this experience in our daily work to improve our assurance work, IFRS, life cycle cost accounting, and so on. On the other hand, we do our utmost to give added value to the IAM’s Accountancy Practice SSG Project and contribute to ISO55000, especially in the areas of financial and technical reporting and transparency. For us, the IAM is a place that brings together people with common interests, different backgrounds and varied approaches.

This diversity and mutual understanding make our membership in the IAM worthwhile and rewarding, despite being based outside the UK.

Donald Miller, Scottish Power As a Mechanical Engineer, surrounded by Electrical Engineers, I am often asked why are we involved with IAM - is it not just good engineering practice? Tough question but I believe the IAM is different, it draws all disciplines and all interests to consider the whole enterprise. As an individual, Patrons’ Group allows me to meet a group of Asset minded people from different sectors who I wouldn’t normally have access to. Where else will you find a Dutch Accountant talking to a Scottish Engineer and an English Operational Analyst about the true value of an asset and the tools and

techniques to apply the concept in investment and operational decisions? As an organisation, it allows us to share practice and support the growth in knowledge to underpin our organisation and develop our Asset Management thinking. If we want to recruit people with the skills we need then we need to shape the qualifications available and make Asset Management more of a transferrable skill rather than a collection of industry or company specific knowledge. One company or industry can’t do that but the IAM can.

Darren Anderson, Individual Member The benefits I derive as an Individual from the IAM are both numerous and diverse. I can probably best articulate some of them through my personal journey. My initial engagement as a member gave me access to a considerable amount of new material on the subject, including the PAS55 Assessment Methodology and various models and frameworks. Whilst not always self-explanatory or totally aligned to my individual needs, this started to provide context and help me to understand Asset Management from the position of each of the businesses I am involved with and to align my own experiences and existing knowledge to the PAS55 specification. From this point I started to attend IAM conferences and events and encountered a wide and interesting network of relevant individuals. Through networking and discussions, I was able to challenge the models and learn from others interpretations and cement my understanding by listening to presentations and discussions about other people’s journeys. The benefits have not stopped there, I am now fortunate to be an active Council member and Patron representative, enabling me to support the IAM and give something back to a community that has helped me considerably over the last few years.

Last year, we completed our Strategic Review and confirmed our basic raison d’être as a Learned Society, supported by a Membership Body. This drives everything else.

We are hoping to increase our output on knowledge-related activities.

One of the constraints is volunteer time so we are looking for ways to

leverage that which is available. We are also constrained by cash, not

only design, publishing and web portal but also the opportunity to

use technical authors to support volunteer expertise. If you think you

might be able to sponsor this activity, we would be delighted to hear

from you!

Although we have talked for some time of the ‘roadmap’ and ‘journey’

both for Individuals and Corporates, this is now a guiding principle for

the work we are planning.

An exciting initiative is our Next Generation Project and Nick Cahill

(see below) is already finding great enthusiasm amongst younger

people who wish to learn how to be good asset managers. We intend

to make this a thriving group of people not only younger members but

people of all ages who are new to asset management.

One of the next pieces of work, which the Faculty is currently scoping,

is to develop better tools and understanding of what constitutes

maturity and excellence in the implementation of asset management.

Perhaps the most challenging series of Projects is the commitment

we have made to producing 39 Subject Specific Guidelines to provide

guidance to all kinds of organisations about what those subjects really

encompass. The exact format of these SSGs may evolve so we are

initially working on four or five subjects with a view to setting the

template for the remainders. The more people we have, of course,

the faster we can do this work. So if you are interested, we would be

delighted to hear from you – whether or not you are a Member of the

Institute.

10

The Year Ahead

“We are delighted to announce the launch of NxtGen, the much anticipated IAM Next Generation. NxtGen is a new

network focused on the needs of students and other people new to the asset management profession.

The objective of NxtGen is to increase awareness of asset management (especially among younger professionals)

and provide professional development support and advice. NxtGen social meetings will take place most months -

a welcoming, informal and fun opportunity to learn, meet like-minded people and get involved. Every few months

we will invite ‘whoever interesting is in town’ to give a 10 minute talk to NxtGen members loosely on the topic of

asset management. This being piloted in the UK and we are keen to extend this elsewhere as quickly as possible.

We will organise more formal events to help NxtGen members gain professional qualifications

(the IAM Certificate and Diploma) and other competences to become full members (MIAM).

I hope you will support us by encouraging students and graduates especially to join and come to events.

Together we will help the asset management community, and the IAM, build for the future.”

Find out all about it at www.theIAM.org/NxtGen

The biggest single feature of the year ahead is undoubtedly the IAM

Qualifications Project. We have identified the need for many of our Members

and prospective Members to demonstrate evidence of competence for their

employers. In keeping with our aim to encourage convergence of thinking and

recognition of the discipline of asset management, we are launching these

qualifications globally so that they are recognised universally at the University.

This is a major undertaking for an Institute of our size but we believe that it is

essential if there is not to be great confusion in the market place. We expect

there will be a rapid increase of interest and demand for training but the IAM

does not intent, at the moment, to offer any training directly. By retaining our

independence as the Examination Provider we hope to encourage respect for

the qualifications and innovation and entrepreneurship amongst the training

provider community.

We plan to consolidate our ideas for member categories and recognition

of competence and experience. This will give us a better context for Initial

Professional Development (IPD) support and activities. We also want to consult

on our plans for continuing Professional Development (CPD) and one of the

objectives for our Professional Development Committee is to make some of our

events recognised for this purpose. We shall work with commercial providers to

see where we can identify opportunities both for Members and non-members to

attend identifiably good events.

We also wish to engage more closely with the financial community. We currently

have a very strong engineering and technical base but we recognise that nearly

all organisations need to involve others if they are to do asset management well.

Our aspiration is to reflect this mix in our membership.

We know that there is significant knowledge and expertise outside our

membership and we are deliberately making it possible for non-members to

contribute / collaborate / participate in the knowledge work of the Institute.

We would be delighted if you want to get involved.

Join us!

“The biggest single feature of the

year ahead is undoubtedly the IAM

Qualifications Project. We have

identified the need for many of our

Members and prospective Members

to demonstrate evidence of

competence for their employers.”

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