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St. James’s Place suffered a sharp decline in net inflows in the first quarter as the asset manager struggles with withdrawals of client funds and possible compensation payments to clients.
The FTSE 100 company said net inflows fell to just over £700 million in the three months to the end of March, compared with £2 billion a year ago. Analysts said the figures were a fifth below their expectations of £900 million.
Mark FitzPatrick, who became SJP’s chief executive late last year, warned that the number of customers withdrawing their money was “at an elevated level”, reflecting a broader industry trend as customers “draw on their savings to spend their money.” to meet financial obligations.” Needs”. Shares of SJP fell nearly 3 percent in morning trading on Tuesday before clawing back some of those losses.
However, Hargreaves Lansdown, Britain’s largest DIY investment site, on Tuesday reported net inflows of 1.6 billion pounds in the first three months of the year – in line with last year’s level. And SJP rival Quilter last week reported net inflows of £810m during the quarter – around double the year-ago figure.
SJP’s latest figures come after a turbulent year for the UK’s largest asset manager, which saw its share price fall by more than 60 per cent. During the year the group announced a major overhaul of its fees to comply with new consumer tax rules that came into effect last July and aimed at giving customers fair value. On Tuesday, SJP said it was “continuing to move forward” with plans to implement the new fees, which will no longer impose exit penalties for early withdrawals.
FitzPatrick is also conducting a review of the business after money flowing into the group’s funds and other products almost halved last year. He said on Tuesday that the company was “making good progress” on the review and would return the market to half-year profit levels in the summer.
SJP was forced to set aside £426m earlier this year to cover potential compensation for customers who had not received adequate service from the firm’s financial advisers. FitzPatrick said SJP is moving forward with a review of historical customer service records.
David McCann, an analyst at Numis, noted that the level of customer churn was worse than expected, but said the company was positioned to capitalize on market opportunities in the longer term. He pointed to the growing need for advice as more people take responsibility for their retirement provision due to the switch to defined contribution pensions.
Jefferies analyst Julian Roberts said SJP advisor numbers “continue to rise, which we see as a sign of health, despite difficult market conditions for capital flows.”
The value of SJP’s total assets under management increased to £179 billion from £154 billion last year, due to strong investment performance.