St James’s Place (SJP) reported today (30 July) record funds under management of £181.9bn as it looks to reach annual savings of £100m by 2027, in its half-year results.
By 2030, the UK-headquartered wealth manager with Middle East and Asia presence, expects cumulative cuts of £500m, of which half will then be reinvested back into the business.
It said the ambition between now and the end of 2026 was “to deliver an addressable cost base reduction programme, which will reach full run-rate savings of £100 million (pre-tax) or 15% p.a. by 2027”.
The total costs to achieve savings of £80m would be “largely incurred in 2025 and 2026” with anticipated cumulative net savings of approaching £500m through to 2030.
“Approximately half of these savings, once realised, will be invested back into the business between 2025 and 2030, supporting strategic initiatives and underpinning long-term growth ambitions”, the statement said.
SJP saw higher gross inflows of £8.5bn (2023: £8.0bn) with continued strong retention of client funds at 94.6%1 (2023: 95.6%).
Net inflows fell to £1.9bn (2023: £3.4bn), representing an annualised 2.3% of opening funds under management (2023: 4.6%)
There were record funds under management of £181.9bn (31 December 2023: £168.2bn) and a net 3% increase in client base to 988,000 (31 December 2023: 958,000).
IFRS profit after tax was £165.1m (2023: £161.7m).
Mark FitzPatrick (pictured), chief executive officer, 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.
“The first half has seen us make progress against our significant programmes of work to simplify our charging structure and review historic client servicing records. We are on track to deliver our new charging structure in the second half of 2025, in line with previous guidance.
“The focus of our review of historic client servicing records has been on building and readying the infrastructure that is necessary to analyse significant amounts of servicing records efficiently and accurately. We remain comfortable that the provision we have set up to cover the costs of this exercise is appropriate.”
FitzPatrick continued: “Beyond our operating and financial performance, we have performed a thorough review of the business and the markets in which we operate. 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.
“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.
“While near-term profit growth will reflect the structural impact of transitioning to our new simpler and more comparable charging structure as announced last October, we expect to see the Underlying cash result accelerate in 2027 and beyond, doubling between 2023 and 2030. Importantly, much of this rapid growth is highly predictable because of those changes that we are making to our charges.
“We are positioning for further success, and I am confident that our refreshed strategic focus leaves us well placed for a very bright future ahead.”
