St James’s Place has reported a 22% drop in profit, down from £208.2m to £161.7m year-on-year, amid sluggish growth and regulatory changes.
The wealth management company put the loss to the increase in the rate of corporation tax.
In its report for the first half of 2023 published today (27 July), SJP announced that despite a “challenging” market environment it has attracted £8bn of new client investments, and overall client retention rates of 95.6%.
It also reported net inflows of £3.4bn equivalent to an annualised 4.6% of opening funds under management (FUM).
SJP added that the ongoing net inflows combined with positive investment market returns during the period has resulted in FUM closing at £157.5bn.
Its chief executive Andrew Croft said: “This operating performance has been mirrored by a strong financial outturn for the period. Despite the headwinds of a challenging new business environment, the impact of inflationary pressures on our cost base, and a marked increase in the rate of UK corporation tax, we have delivered an underlying post-tax cash result of £207.1m, up 4% versus the prior year.”
The wealth management company also announced plans to cap product charges ahead of the Consumer Duty new rules next week.
SJP said the change followed a review of its business in a bid to provide good client outcomes.
Croft said: “This cap, which is set at 85 basis points, represents support for clients who have invested over the long-term and we estimate there are around 65,000 clients who will immediately benefit from this positive action, a figure that will grow over time.”
The change, which takes effect in August, applies to client’s bond and pension investments with a duration longer than 10 years.
It will cost SJP £859.2m to implement the new cap on product charges and shares were down by 11% following the announcement this morning.
Meanwhile SJP also announced an increase in its adviser numbers.
The wealth management company now has 4,766 qualified advisers across the partnership, an increase of 73 so far this year.
It has also seen 169 advisers graduate from its academy with 346 now enrolled.
