St James’s Place has returned to profit on the back of strong customer inflows after a tough period in which the UK’s largest retail wealth manager had to grapple with compensation costs and fee changes.
The FTSE 100 company recorded a £535.9mn profit before tax for 2024, reversing a loss of £4.5mn in the previous year when the group made a chunky provision for potential customer redress relating to its advice services.
The company said last month that gross inflows rose by a fifth in 2024 to £18.4bn, helping to boost total assets under management to £190.2bn.
Net inflows, however, fell to £4.3bn from £5.1bn a year earlier as customers withdrew from their pensions. Wealth managers reported an increase in customer activity around October’s Budget due to concerns that chancellor Rachel Reeves would change the way assets were taxed.
Mark FitzPatrick, chief executive, said: “Bringing pensions into scope for inheritance tax purposes only adds to the complexity of estate planning, driving the need for financial advice.”
The company said on Thursday that distributions to shareholders amounted to £224mn for the year through a combination of dividends and share buybacks.
The wealth manager announced in 2023 that it would overhaul its fees, including an exit penalty on certain products, after coming under scrutiny from the Financial Conduct Authority.
FitzPatrick said SJP was making “good progress with the implementation of our simple, comparable charging structure”, which he added was “on track” to be in place by the second half of the year.
It made a £426mn provision a year ago because of an increase in complaints from customers who claimed they had not received sufficient financial advice.
FitzPatrick, who joined in late 2023 from Prudential, is seeking to repair SJP’s image.
The Financial Times reported in December that SJP had decided to abandon its ritzy annual staff gathering in London and a spring break at the luxury Gleneagles hotel in Scotland.