Wealth management giant St James’s Place reported a positive first half of 2021 with gross inflows rising to £9.2bn ($12.5bn, €10.6bn), which was up from £7.3bn in 2020.
Net inflows came in at £5.5bn from £4.5bn last year.
The firm’s funds under management have grown to £143.8bn in the first six months of the year, from £129.3bn at the end of 2020, up 11% year to-date.
SJP will focus on three main areas going forward: growing new business by 10% per year supported by a rising number of advisers; retaining client investment with net inflows rising 10% per annum; and, keeping expense growth at around 5% a year.
It also set out to increase its partnership by 3-5% in the current year, and so far, the wealth manager has attracted 139 financial advisers, a 3.2% increase. This was done through a combination of recruitment and 71 graduations from its academy.
SJP now counts 4,477 qualified advisers across the partnership, with 277 students enrolled in its academy. It has over 2,500 partner firms across the group.
Asia
The wealth manager’s Asian business also reported a positive first half of the year with gross inflows of £185m – around 20% higher than the previous year – contributing £1.4bn to the group’s funds under management, up 19% from the beginning of 2021.
The firm said that net investment in Asia in the first six months of the year has been lower than 2020 “reflecting higher fee income from increasing FuM together with strong expense discipline”.
“This result is tracking our objective to see out Asian operations become cash positive by 2025,” SJP added.
Growth plans for the region include building 100 partner businesses to offer advice to expats and high net worth individuals. SJP has 132 advisers across Asia working in multi-person partner firms, but it did not disclose how many businesses it has currently.
The Asian discretionary fund management business, Rowan Dartington, also performed well with £282m of new client investments, 33% higher than H1 2020, leading to a 14% increase in FuM to £3.2bn.
Rowan Dartington also contracted with outsourcing supplier SS&C to provide system and administrative services for the next 10 years, a step towards making the business cash positive by 2024.
Covid uncertainty
Andrew Croft, chief executive at SJP, said: “I am very pleased to report a strong set of new business and financial results for the first six months of the year.
“During the first half, the partnership attracted £9.2bn of new client investments, with strong flows reflecting a combination of factors including improving client sentiment, a sharp increase in household savings rates, and high levels of client engagement.
“Retention has remained strong through the period, resulting in net inflows of £5.5bn in the first half, equivalent to 8.6% of opening funds under management on an annualised basis. These net inflows, together with the positive impact from investment markets, has resulted in funds under management closing the half at a record £143.8bn, up 11% year to-date.
“Growth in new business and funds under management has resulted in strong growth in income whilst ‘controllable’ expenses for the six months are modestly lower than in the first half of 2020 reflecting the phasing of our planned cost growth towards the second half of the year. The combination of the income and expense outcomes has resulted in a strong financial result, with the underlying cash result of £189.3m, up strongly on the prior period.
“During the first half we added a net 139 advisers through resuming activity in both experienced adviser recruitment and academy graduation. Having grown the partnership by 3.2% during the first half, we are well positioned to support even more clients with their long-term financial planning goals going forward.
“The impact of the pandemic on the timing and value of flows in 2020 and 2021 will naturally result in a variable pattern of year-on-year growth and normal phasing of business. Taking this into account together with a strong start to July, we anticipate a rate of gross inflow growth for the second half of around 20% despite strengthening comparatives in the latter part of the year.
“Although there remains inherent uncertainty in the operating environment as the UK and the world at large continues to navigate the pandemic, the results we have announced today show we have made an encouraging start against our 2025 ambitions.”
