Key facts
- St James's Place experienced a £1bn drop in net inflows, which fell to £2.7bn in the first half of the year.
- Profit before tax decreased to £278.4m from £307m year-on-year.
- Investors are withdrawing funds to avoid inheritance tax on pensions, which will be included from April 2027.
- The company announced an interim ordinary dividend of 6p per share and a £128.1m share buyback program.
- Funds under management reached a record £240.8bn.
St James's Place has reported a £1bn decrease in net inflows for the first half of the year, with figures dropping to £2.7bn from £3.8bn in the same period last year. This decline is attributed to market uncertainty and anticipated changes to inheritance tax rules for pensions, which will come into effect in April 2027. Investors are reportedly withdrawing funds from their pension pots before the 40% levy is applied.
The company's profit before tax also saw a reduction, falling to £278.4m from £307m in the prior year, influenced by a significant overhaul of its fee structure. Key changes include separating charges into distinct components and eliminating early withdrawal penalties on pensions and bonds. Additionally, advisers will now receive ongoing advice fees on a monthly basis instead of annually, starting next March.
Despite the hit to inflows, St James's Place announced an interim ordinary dividend of 6p per share and a new share buyback program valued at £128.1m. Shares of the company fell 3.9% in morning trading, contributing to a year-to-date decline of 26.8%.
The company noted an increase in customer retention across both its adviser and client channels, attributing this to the upheaval in the UK tax system driving demand for financial advice. Adviser numbers edged up to 4,951, and client numbers grew to 1,064,000. Funds under management (FUM) reached a record £240.8bn, supported by a 16.4% annualised investment return and a 95.4% FUM retention rate. Gross inflows remained stable at £10.5bn.
Mark FitzPatrick, CEO of St James's Place, expressed confidence in the long-term outlook for financial advice in the UK, highlighting its under-penetration and the increasing client demand for trusted advice, quality service, robust investment solutions, and modern technology.