St James’s Place (SJP) recorded its second-best year in terms of net flows in spite of a £5.6bn hit to funds under management (FUM).
SJP funds pulled in a net £9.8bn of investor cash for the year to 31 December 2022, a sum topped only by the £11bn recorded in 2021.
The decline in FUM was concentrated in the first half of the year, as the UK’s largest wealth manager added £5.2bn in Q4 to close out 2022 on £148.4bn. By contrast, FUM rose 20% in 2021 to £154bn.
This was largely driven by a £3.2bn increase in the firm’s pensions division over the three months to the end of December. Its investments operation ended the year with £33.3bn, a £750m FUM increase for the quarter.
The firm’s UK equities investments, which make up 11% of total FUM, were the largest detractor to performance as they ended the year worth £16bn. At the beginning of the year, they had totalled £21.5bn.
CEO Andrew Croft (pictured) said: “Despite significant macroeconomic challenges, which deepened as the year progressed, 2022 marks the second-best year for new business flows in SJP’s history. This strong outcome is testament to the hard work of everyone in our community and to the enduring resilience of our business, no matter the environment.
“I am pleased to report that our advisers attracted £3.87bn of new client investments during the final quarter, rounding out another successful year for SJP with gross inflows for the full year totalling £17.03bn.
“Retention of client investments remains very high, reflecting not only their long-term nature, but also the steadying hand of our advisers in difficult markets. This, together with new client investments, resulted in net inflows of £2.05bn for the quarter and £9.78bn for the year, or 6.4% of opening funds under management.”
The firm also increased its army of qualified advisers over the year to 4,693 from 4,556.
Looking ahead, Croft added: “2023 has started in much the same way that 2022 ended but it is encouraging to see more recent positive indicators that UK inflation may have peaked, together with some evidence that currency and investment markets are more stable.
“A sustained recovery in macroeconomic indicators would naturally be conducive towards improving consumer sentiment, activity levels and of course funds under management, as 2023 unfolds.
“Longer term, the demand for trusted, face-to-face advice is only getting stronger, so with a growing partnership and a business in great shape, we continue to be well positioned to capitalise on our market opportunity and deliver against our 2025 ambitions.”
SJP Q4 update
| Three months ended 31 December 2022 | Investment | Pension | UT/ISA and DFM | Total |
|---|---|---|---|---|
| £’Billion | £’Billion | £’Billion | £’Billion | |
| Opening FUM | 32.54 | 70.67 | 39.93 | 143.14 |
| Gross inflows | 0.55 | 2.34 | 0.98 | 3.87 |
| Net investment return | 0.67 | 1.64 | 0.87 | 3.18 |
| Regular income withdrawals and maturities | -0.07 | -0.43 | – | -0.5 |
| Surrenders and part-surrenders | -0.4 | -0.36 | -0.56 | -1.32 |
| Closing FUM | 33.29 | 73.86 | 41.22 | 148.37 |
Buy rating reaffirmed
In the wake of the trading update, ratings firm Jefferies has reaffirmed SJP’s ‘buy’ rating.
Jefferies analysts said: “Flows, FUM and adviser numbers are very close to consensus expectations, retention has increased year-on-year and there are green shoots in the macro outlook. New business figures were the second-best year ever for the company. Retention remains at the elevated pandemic levels. Management has reiterated its 2025 goals, which we believe is positive vs some expectations, and may please the market.
“Interestingly, retention strengthened slightly year-on-year, exceeding the heightened levels seen during the pandemic when spending was curtailed by lockdowns. This maybe due to caution among advisers while inflation remains high and the economy uncertain.”
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