St James’s Place has delivered more positive flows figures than Hargreaves Lansdown in the latest quarter while Integrafin has a more attractive valuation than the direct-to-consumer platform giant, analyst notes published on Wednesday have stated in response to Q3 trading updates.
SJP funds under management (FUM) have surpassed the £100bn mark, according to the wealth manager’s latest quarterly results.
While net flows totalling £2.47bn were down 5% quarter on quarter, the figures were better than the 16% fall reported by Hargreaves Lansdown, Citi noted in an analyst note. Hargreaves’ shares fell 6% on its latest trading update, published earlier this month, where chief executive Chris Hill warned of weak investor sentiment and uncertain markets.
Pensions provide stable flows at SJP
Pensions consolidation and the need for advice around pensions decisions was a key driver for new business growth at SJP, Citi said.
Pension net flows of £1.66bn were up 3% quarter on quarter and 23% when compared with the previous year. In contrast, unit trust, Isa and bond flows were down 21% quarter on quarter. Over the year, they are down 17%.
However, pension flows trends were encouraging, Citi said. “Retirement savings should be a source of flow stability, even in times of weaker investor confidence.”
Transact also draws HL comparisons
Meanwhile, Peel Hunt has upgraded Transact parent Integrafin to a ‘buy’ due to share price weakness, noting it is trading at a favourable discount to Hargreaves Lansdown.
Integrafin stock has fallen 14% over the past month and in a note preceding the adviser platform’s update Peel Hunt analyst Stuart Duncan said it was trading at a 12% discount to Hargreaves Lansdown on a EV/NOPAT basis.
Funds under direction grew 3.9% over the quarter to close at £33.1bn. Net inflows were £979m up 2% from the last quarter.
Positive market movements contributed a further £316m to FUD.
Integrafin CEO Ian Taylor said while FUD had grown markets are becoming increasingly challenging.
Duncan said: “Clearly short-term market weakness/volatility always has the potential to impact reported numbers on a short-term basis but the long-term drivers of FUD growth are largely immune and the business model is underpinned by the longevity of relationships with financial advisers.”
