Yesterday, St James’s Place shareholders were shocked by disappointing quarterly inflows as well as plans for an operational review.
The market was digesting news that net inflows totalled £770 million in the December quarter, a slower pace than earlier in the financial year and signs of possible upheaval.
Mark FitzPatrick said that he is “reviewing every element of our business” to make sure we are ready for the future. He also wants to be in the best position to continue to deliver for our stakeholders.
St James’s Place revealed recently that it is considering raising up to £1 billion in a new fund to support the independent businesses run by the self-employed advisers who sell their products. regulatory pressure has also forced the firm to change some of its fees. It announced plans to eliminate controversial exit penalties as high as 6 percent for clients who withdraw money in their first years.
Cheltenham’s company boasts 900,000 customers and is used by many of Britain’s wealthier households. The total funds under management reached £168.2bn by year’s end, as the stock market rally boosted client portfolios by £8.9bn. St James reported a net inflow of £5.12billion for the entire calendar year 2023. This is down from £9.78billion in 2022.
FitzPatrick succeeded Andrew Croft (59), on December 1, after a two month handover. He served as the chief financial officer of Prudential from 2012 to 2022, and was then its interim chief executive. He was part of the team at Prudential that managed a strategic shift, demergers and a focus on Asia.
He described St James’s Place’s past-year performance as “solid”. “While the demand for trusted, face-to-face advice is as strong as ever before, the economy and the short-term options of cash deposits and savings rates have affected client confidence and capacity to commit to long term investment.”
“As our firm builds on the solid foundations that we have built over the past three decades, we see an enormous opportunity to help more clients in need of advice and assistance. I want SJP seize this long-term chance.”
Analysts stated that they didn’t expect a major strategic shift. One analyst said, “This appears to be a new CEO pulling the rug up to see what’s beneath.”
The new consumer duty, which was introduced last year and requires all financial service providers to treat customers fairly, may continue to exert pressure on the company.
St James’s Place shares closed down by 4.4 percent, or 29 1/2p. They are now 646 1/2p.