St James’s Place: Another grim day as cash craters and complaint provisions rise

St James’s Place: Another grim day as cash craters and complaint provisions rise

Wealth manager St James’s Place said it had been a “challenging” year today as its cash result cratered on the back of an overhaul in its fee structure and provisions for a deluge of complaints.

Britain’s biggest wealth manager said its net inflows through 2023 came in at £5.12bn, below market expectations, as funds under management came in at £168.2bn at the end of the year, up from £148.3bn at the end of last year.

Analysts had been pricing in inflows of £5.3bn and funds under management of £166.9bn.

The firm’s cash results of £68.7m marked a sharp fall from the £410.1m notched last year, which bosses said had been “significantly impacted” by an assessment into its service to clients and fees.

Chief Mark Fitpatrick said the work was undertaken “following a significant increase in complaints, particularly in the latter part of 2023, mostly linked to the delivery of ongoing servicing”.

“The assessment revealed that our evidence of ongoing client servicing was less complete in the years preceding investment into our Salesforce CRM system in 2021, and we have therefore made a provision for potential client refunds to address this,” he added. “Looking forward, the investment we’ve made into Salesforce means we are confident this is a historic issue.”

It comes after a turbulent year for the money management industry in which volatile markets and rising interest rates have dampened savers’ appetite for wealth management.

Fitzpatrick is looking to push through a turnaround after a tumultuous year for the firm in which it was forced to overhaul its controversial fee structure under the FCA’s stringent consumer duty rules.

After dropping its controversial exit fee, SJP warned the change was likely to come with a £140-£160m price tag for implementation alone and deliver a hit to the bottom line in the short term.

Bosses revealed an overhaul in its fund managers late last year in a bid to cut costs, pulling $1.5bn from Jacob Rees-Mogg’s former fund manager Somerset Capital.

St James’s Place has also suffered a series of bruising headlines after freezing withdrawals on a property fund, and featuring heavily on the closely-watched ‘dog funds’ list of the worst performing investment vehicles in the industry.

Shares in the embattled company have cratered around 50 per cent over the past 12 months.

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