F IN A N C I A L ASSESSMENT EY CREDIT RISK BAROMETER AN ECONOMIC HEALTHCHECK ON FIDI AFFILIATES Following the reintroduction of a financial assessment requirement as part of FAIM 3.2 and working with auditors EY, FIDI is now producing an annual report on the economic status of its affiliated business across the world. Here, we highlight some findings from the first of these A financial assessment requirement was reintroduced as a part of FAIM 3.2 in January 2019, to demonstrate that FIDI Affiliates are financially sound and dependable partners to do business with in other words, they can pay their bills. FIDI has now released the first report from EY assessing the creditworthiness of FIDIs membership, based on the financial accounts of affiliated companies. By introducing an annual financial assessment of a companys liquidity, solvency and profitability, we will be able to not only demonstrate its financial health at the time of assessment, but more importantly, we can identify trends in these ratios over time. We now have data from this first pilot year, which has been assessed by EY one of the big four in auditing. The main conclusions of the report are positive, including that more than 80 per cent of our FIDI Affiliates have a low risk score; and that FIDI Affiliates generally score better for solvency. However, it also singles out a significant weak point: FIDI movers (and likely all movers worldwide) are not very profitable. The report gives a good indication of how FIDIs Affiliates are doing, what we are good at, where our pain points are and what we should be focusing on from a financial standpoint. This is particularly interesting at a time when our industry is grappling with the short-term effects and long-term implications of the COVID-19 crisis. When change for survival is the prime concern, it is the bottom line that counts. Here are some of the most significant findings and graphics from the report. FIDI MEMBERSHIP IN NUMBERS FIDI Membership in numbers 428 Completed financial assessments 94% of Affiliates financial statements made available 83% Median Affiliate results1: Affiliates with low risk score Median: 9% (low risk) Average: 18% (low risk) 73% of low solvency risk EY CRB high risk (n = 42) EY CRB medium risk (n = 31) Median: 0,06 (low risk) 39% of low liquidity risk EY CRB low risk (n = 355) Median: 0,13 (medium risk) 19% of low profitability risk Median: 1 Value 0,03 (medium risk) separating the higher half from the lower half of a data sample. Page 2 50 FF298 AugSept20 pp50-53 EY.indd 50 WW W. F I D I FOC U S . OR G 21/07/2020 11:41