Analysts at Panmure Liberum think that the future is bright for St James’s Place after the wealth manager released a trading update for the third quarter yesterday.
The UK’s largest wealth manager reported that it had attracted gross inflows of £4.4bn in the three months to September, ahead of City predictions and 20 per cent ahead of the same period last year.
By the end of the quarter, funds under management had swelled to £184.4bn, up from £181.9bn the quarter before and also ahead of consensus.
“Clients continue to put their trust in St James’s Place,” analysts at Panmure Liberum wrote.
The wealth management industry is likely to face some changes at the upcoming Budget as the Chancellor looks set to target pension pots and inheritance reliefs.
However, the analysts suggested this might actually be a net positive for the group as clients seek advice to navigate the changes.
“The need for financial advice continues to grow, and the forthcoming Budget is another clear driver of this. Quite what changes in the Budget is unknown, of course, but ‘no change’ is the least likely outcome. For those seeking to save, a trusted adviser plays an essential role,” they wrote.
Boss Mark Fitzpatrick referenced the challenges thrown up by the Budget in his statement.
“While speculation around the forthcoming autumn budget compounds this, we know that our advisers are providing invaluable advice to our clients, helping them to navigate the uncertainty and safeguard their financial futures,” he said.
Fitzpatrick joined the firm in December last year at a time when it was still reeling from the impact of the Financial Conduct Authority’s (FCA) consumer duty rules, which forced the firm to overhaul the fees it charges clients.
St James’s Place is still in the process of reforming its fee structure, including axing its controversial exit fee, but the analysts said this too could be an opportunity.
“SJP grew faster than the industry with a product range deemed by many as opaque and overpriced. Imagine the prospects with clearer, competitive pricing,” they argued.
Analysts at Deutsche Numis agreed: “The company is a market leader in a structural growth industry”.
Its shares are up nearly 30 per cent in the year-to-date.