St James's Place has reported a rise in pre-tax profits of 42% in 2022, but this year the advice firm plans changes to how it operates to comply with the incoming Consumer Duty rules.

The wealth management firm reported IFRS profit before shareholder tax of £501.8m in the year to the end of December, up from £353.8m in 2021, while post tax profits were £405.4m, up from £287.6m. 

Underlying cash was £410.1m, up from £401.2m last year, with the group's primary source of net cash generation is product charges.

SJP investment director Rob Gardner departs to found environmental venture

SJP has long faced industry criticism over the transparency of its client charges. 

Following what it called this year's "record results", in light of the Financial Conduct Authority's incoming Consumer Duty rules, SJP has said it will review its company practices, and some will need to change.

Andrew Croft, chief executive at SJP, said in a statement: "While we believe that we already achieve good outcomes for our clients, we are nonetheless reviewing all our client focused activities and reflecting on how we can develop them to meet ever increasing expectations. 

"Ahead of Consumer Duty coming into force, there will be aspects of the way we operate which will need to change in order to meet regulatory expectations. 

"The FCA is expecting action and where we identify this is required, we will respond to improve client experience and reduce any risk of poor client outcomes."

SJP attracted £17bn of gross inflows in 2022, the second-best year for new business flows in its history. Net inflows were £9.8bn, equivalent to 6.4% of opening funds under management.

Joe Wiggins heads to Fundhouse as new CIO

The significant falls in investment markets resulted in funds under management ending the year at £148.4bn, down 4% compared to the start of the year, the advice firm said.

However, Croft said the firm remains well placed to deliver its £200bn target by the end of 2025.

Croft said he was "encouraged  to  see  indicators  that  UK inflation may have peaked and that there are some signs of optimism for the direction of economies and investment markets worldwide".

These suggest improving consumer sentiment "activity levels and of course   funds   under management, as 2023 unfolds", he added.