St James’s Place (SJP) has seen its annual net inflows fall from £9.8bn in 2022 to £5.1bn last year, according to its annual trading statement published today (25 January).
Gross inflows in 2023 stood at £15.4bn, a 9.6% decrease compared to last year’s £17bn figure. Closing funds under management increased by 13.4%, however, from £148.4bn to a record £168.2bn, with advisers bringing £3.7bn of new client investment into the business during Q4 alone.
The retention rate for SJP’s funds under management in 2023 stood at 95.3%, a modest reduction from its 96.5% retention rate in 2022.
Meanwhile, net flows into SJP’s Cash Deposit Service, run by Flagstone, increased by 65% from £2.5bn to £3.9bn over the course of the year.
Mark FitzPatrick, the firm’s CEO who joined from Prudential at the end of last year, said performance has remained “robust” amid a “solid year” for the business, despite a “difficult industry backdrop”.
“While the need for trusted face-to-face financial advice remains as strong as ever, client capacity and confidence to commit to long-term investment have been impacted by the economic environment and short-term alternatives in the form of cash deposit and savings rates,” he said.
“Our IMA performed very well during 2023, delivering strong investment returns relative to peers for the benefit of our clients. This, combined with ongoing net inflows, has driven funds under management to a record £168.2bn.”
FitzPatrick added that he continues to see a “huge opportunity to support more clients who need help and advice”.
“I want SJP to capture this long-term opportunity, so as we start planning our vision for 2030 I am reviewing all elements of our business to ensure we are fully fit for the future and best placed to keep delivering for all our stakeholders.”
In October last year, SJP announced a restructuring of its fees including scrapping early withdrawal charges and gestation periods for most of its new investment bonds and pensions. It has also changed the management line-up on several of its funds recently in a bid to reduce charges.
Analysts at brokerage Jefferies have rated SJP shares as a ‘buy’, concurring with the CEO that the update is “solid” at a time of “improving underlying conditions”.
“Gross inflows were in line, but outflows are slightly elevated,” they stated. “Adviser numbers are very slightly below forecasts, but do not imply an exodus at this stage. Improving market performance may help customer confidence in future periods. The CEO’s review as he plans for 2030 may introduce some uncertainty into shareholders’ minds, but we do not envision major structural change.”