Wealth management giant St. James’s Place (SJP) has outlined its future strategy plans in its half-year results published today (30 July), which includes a cost base reduction programme up until 2027.
The programme aims to reach full run-rate, pre-tax savings of 15% per annum, by 2027. This equates to £100m per year.
SJP said costs incurred to achieve savings of £80m will “largely incur in 2025 and 2026”. The firm expects cumulative net savings to approach £500m through to 2030, with these savings ultimately being reinvested back into the business over the next five years, from next year, with the aim of “supporting strategic initiatives and underpinning long-term growth ambitions”.
The plans come as part of a business review from SJP, which found that “opportunity remains compelling given structural growth drivers and rising demand for advice”.
The future growth plans will be built around four pillars: ‘brilliant basics’, which involves simplifying and standardising operations; ‘differentiated client proposition’, ‘leading adviser offering’, with the aim of “setting the standard for the future of financial advice”; and being a “performance-focused organisation”, with a focus on “empowerment and accountability”.
Discussing the review, Mark FitzPatrick, CEO of SJP, said: “Ultimately, this work has reinforced our conviction that SJP continues to be a very strong business, with a fantastic opportunity ahead.
“We must though acknowledge that for all our qualities as a business, we have a lot of hard work ahead of us over the next 24 months to strengthen our core and execute our existing programmes of work, helping us to become a more efficient and effective business.
“From a strong base, we can capture the structural market opportunities ahead of us and drive growth over the long term.”
He added: “As we look to the future, we are ambitious and have a clear direction of travel towards achieving sustained success. I am confident that the approach set out following our business review will enable us to achieve annual FUM growth in the mid-to-high single digits over time.”
Company results
During the first half of this year, SJP saw gross inflows of £8.5bn, compared to £8bn over the same period last year. This marks a 6.3% uptick. However, net inflows stood at £1.9bn, representing 2.3% of the firm’s opening funds under management (FUM). Compared to the first half of 2023, this is a 44.1% decline, with last year’s net inflows reaching £3.4bn, of 4.6% of opening FUM.
Overall, FUM reached a record high for the business of £181.9bn, compared to £168.2bn at the end of last year. This amounts to an 8.1% increase over six months. Elsewhere, SJP’s client base has increased by 30,000 over six months, from 958,000 at the end of last year to 988,000 to the end of June 2024.
Underlying post-tax cash within the business amounted to £205.2m, compared to £207.1m over the same period last year.
FitzPatrick said: “I am encouraged to report robust business performance for the first half of 2024 across each of our key operating and financial metrics, demonstrating the continued resilience of our business model even as we work to address the past challenges that I set out earlier in the year.
“We have seen high levels of activity and engagement between our advisers and our clients, contributing to positive flows. Helped by strong investment returns for our clients, we have achieved record funds under management, delivered a good outturn for the cash result, and grown the partnership and our client base. It’s evident that we remain in good shape.”
