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The new chief executive of St James’s Place has said he will conduct a review of every element of the business, as inflows to the group’s products nearly halved last year.
Mark FitzPatrick, who took the helm of the FTSE 100 wealth manager in December, said the review would be undertaken as part of the company’s planning for its “vision for 2030” in a trading update on Thursday.
It comes as the wealth manager reported that economic upheaval and attractive returns on cash had dented clients’ confidence in long-term investments, pushing annual net inflows down to £5.12bn, from £9.78bn a year earlier. Total funds under management rose to a new record of £168.2bn, however, helped by strong investment returns.
Shares, which are down 48 per cent in the past year, fell by 9 per cent in morning trading in response to the update. “Sentiment [among shareholders] is not in a fantastic place,” one analyst told the Financial Times.
FitzPatrick said that while the “need for trusted face-to-face financial advice” remained “as strong as ever”, clients’ ability and confidence to commit to long-term investments had been “impacted by the economic environment and short-term alternatives in the form of cash deposit and savings rates”.
Cash deposits in SJP’s externally-managed cash deposit service rose 55 per cent to £3.9bn during the year, and the number of advisers rose 3 per cent to 4,834.
The update comes after the group announced the largest overhaul of fees in its 31-year history in October, after the Financial Times revealed the company was facing pressure from regulators to embark on a more radical overhaul of charges following modest changes in July.
SJP will create a new charging structure for the majority of new investment bonds and pensions sold to clients in the second half of 2025, and will remove early withdrawal penalties for new clients. The company has previously come under fire for its complex fee structure involving upfront fees and ongoing annual charges.
In December, the Financial Times revealed that the company was also planning to raise up to £1bn by 2030 to buy the businesses of retiring partners.
Higher interest rates and the company’s increasing scale are challenging the internal market which facilitates the selling of client books internally, which allows advisers to slim down their practice book or leave, while keeping the clients with SJP.
