St James’s Place (SJP) has reported strong performance for the six months ending June 30, 2024, setting a record for funds under management (FUM) at £181.9bn.
The firm’s gross inflows reached £8.5bn, up from £8bn in the same period last year. Despite a slight decrease in client fund retention (94.6% compared to 95.6% last year), it achieved net inflows of £1.9bn.
This represents an annualised 2.3% of opening funds under management, a decline from last year’s 4.6%.
The firm also reported a net increase of 3% in its client base, reaching 988,000 clients, up from 958,000 at the end of 2023.
On the financial front, SJP’s underlying post-tax cash result was slightly lower at £205.2m compared to £207.1m in the previous year.
However, the firm saw a small increase in IFRS profit after tax, rising to £165.1m from £161.7m last year.
SJP also stated that it is on track to implement a new and simplified charging structure in the second half of 2025.
In addition, its review of historic client servicing records is focused on building infrastructure to analyse substantial amounts of data, with SJP confident that it is able to meet the associated costs.
Looking ahead, the firm plans to focus its strategic efforts around four pillars:
- Brilliant basics: Simplifying and standardising operations to ensure excellent client outcomes.
- Differentiated client proposition: Enhancing offerings across diverse client segments.
- Leading adviser offering: Setting the benchmark for financial advice in the UK.
- Performance-focused organisation: Driving performance through empowerment and accountability.
It has also announced an ambitious cost base reduction programme, aiming for full run-rate savings of £100m annually by 2027, equivalent to a 15% reduction.
The initiative involves total costs of £80m, largely incurred in 2025 and 2026, with anticipated cumulative net savings approaching £500m by 2030.
SJP claims these savings will be reinvested into the business, supporting strategic initiatives and underpinning long-term growth ambitions.
The firm expects these efforts to be cost-neutral through 2024-2026. Projected benefits include £30m before tax in 2027, increasing to £50m in 2028 and £70m from 2029 onwards.
This strategy supports SJP’s goal to double its underlying cash result from 2023 to 2030.
CEO Mark 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 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.
“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.”
SJP ended 2023 with record funds under management (FUA), but net inflows fell by almost half.
This followed a turbulent year, with the removal of the firm’s controversial exit fees as part of an overhaul of its charging structure and the departure of its previous CEO Andrew Croft.
Is this an example of putting lipstick on a pig? Another paper is carrying this headline:
“SJP aims for £500m cost savings as inflows slump by a third”