St James's Place predicts £200bn AuM by 2025 despite job cuts

St James's Place (SJP) has announced it expects to hit £200bn AuM by 2025, despite announcing 200 job cuts throughout the financial advice firm.

The global wealth management group, has today issued its annual results for the year ended 31 December 2020 announcing a drop in gross inflows of £14.3bn, a drop on 2019's £15.1bn figure and net inflow of funds under management of £8.2bn, dropping from £9.0bn in 2019.

Despite the drop in inflows, funds under management hit £129.3bn (2019: £117.0bn). SJP is now represented by 4,338 qualified advisers across the partnership, a figure that is predicted to drop in the next 12 months.

The SJP statement said that the company had "achieved rapid and successful transition to remote working practices, aided by pace of technology investment" and pointed to its "ambitious set of five year planning assumptions" published today together with revised forward-looking dividend guidance.

Job cuts
Announcing the job cuts, Andrew Croft, chief executive officer (pictured above), said that in early 2020 the company began a review of strategic priorities, which has resulted in plans during 2021 "simplify" operations.

"Unfortunately, this streamlining of the business means a loss of around 200 roles from across the St. James's Place business," Croft said. "We hope, however, that a combination of filling vacant roles across the business and a voluntary redundancy programme in appropriate areas, will mitigate the number of individuals impacted by this difficult decision. 

Croft pointed that 2020 was an "extraordinary year" for individuals, families, businesses and broader societies across the globe, with events shaped by the covid-19 pandemic that began early in the year.

"Our lives have been disrupted and we have all had to adapt to protect the physical, mental and financial health of ourselves, our friends and loved ones, our colleagues, and the vulnerable," he said.

"Overall, I am very pleased with both our new business and financial results for 2020. At the outset of the pandemic the Board made the difficult decision to withhold 11.22 pence of the 2019 final dividend, until such time when the financial and economic impact of covid-19 became clearer.

"I am pleased to report that we have not needed to utilise those funds and, whilst the pandemic is still on-going, we now have the confidence to pay this withheld amount as a further interim dividend during the first quarter."

Growth
Croft has predicted a bold ambition to deliver growth in new business of around 10% per annum which, with what he calls "modest help from investment markets and continued high retention rates", would see SJP funds under management grow to in excess of £200bn by the end of 2025.

"Growth on this scale will require continued investment but given the success of our technology initiatives in recent years, we believe overall expense growth can be held to around 5% per annum thereby delivering additional value for shareholders through operational leverage in the cash result."

He predicted "difficult months" ahead but as covid-19 restrictions ease, Croft said that the company is hopeful there will be an economic recovery and this will, in turn see a return to more "normal growth in new client investments".

Advice
"The demand for trusted advice is stronger than ever and I am confident that given the quality of the partnership, the strength of our client proposition, and the resilience of the St. James's Place community, we are ideally placed to continue to grow and deliver on our new five-year planning assumptions," Croft added.

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