St James’s Place’s funds under management reached almost £130bn last year, but its financial performance was tainted by a 33% jump in its Financial Services Compensation Scheme levy.
The firm reported net inflows of £8.2bn during 2020 – 8% lower than in 2019 and equivalent to 7% of opening funds under management.
Overall, net flows, together with robust markets, increased the wealth manager’s funds under management by 11% to £129.3bn, setting the firm on course to hit SJP chief executive Andrew Croft’s target of £200m by the end of 2025.
FSCS levy a ‘real concern and cause of frustration’
However, Croft (pictured) said the outcome for the year was “significantly impacted” by the £36.7m FSCS levy which was a third higher than the year before.
The firm reported an operating profit of £919m for the year, down from £952m in 2019.
“While we continue to support an industry safety net for consumers, the increasing size of the levy is a real concern and source of frustration,” said Croft. “Good companies are having to continue to fund a significant cost over which they have no control or influence.”
See also: Industry in disbelief as FSCS levy forecast to hit £1bn
SJP chief financial officer Craig Gentle added in his report: “Although we are fundamentally supportive of a mechanism that protects consumers, we agree with the comment made by the FCA chair Charles Randell when he said “…all too often, the polluter doesn’t pay. The cost of bad behaviour by firms which then fail is usually mutualised through the FSCS, rather than borne by the wrongdoers“. We welcome the goal that has been outlined by the FCA of redesigning the system to make the polluters pay.”
See also: Liz Field – Pimfa prioritises FSCS reform in the year ahead
Rowan Dartington inflows drop 24%
Elsewhere, SJP’s DFM arm Rowan Dartington reported net inflows 24% lower at £278m. SJP said new business was affected by difficult trading conditions caused by the pandemic, although funds under management ended 2020 at £2.9bn, a 3% increase since the start of the year.
Croft said: “Our operations and performance during 2020 were inevitably disrupted by the lockdowns and social distancing. However I am very pleased to report that our business has demonstrated real resilience and made further progress with net inflows of £8.2bn for the year and funds under management closing at a record £129.3bn.
“This outcome was possible because of high client engagement levels, our recent major investment in technology platforms, and the agility of our advisers and employees. Overall, I am very pleased with both our new business and financial results for 2020.”
