St James’s Place funds hit record high on market boost

St James's Place reported a record high in its funds under management (FUM) in the third quarter, with FUM rising by 14.2 per cent to £242.4bn. The firm credited this increase to improved market performance, as it attracted £1bn of investment returns for the year to date, totaling £19.1bn. However, the FTSE 100 group experienced a slowdown in inflows, with gross inflows dropping from £5.7bn to £5.1bn in the quarter.

Net inflows also decreased significantly to £0.5bn from £1.7bn. St James's Place's CEO, Mark FitzPatrick, attributed this decline to increased customer caution due to market volatility and uncertainty leading up to the Autumn Budget. FitzPatrick noted that the momentum from their new charging structure, which resulted in a surge in activity the previous year, had now slowed.

The company increased its exposure to North American equities to 40 per cent, or £95.5bn, and boosted its investment in Asian equities by 14 per cent to £38.7bn. However, its exposure to UK assets remained relatively low at just eight per cent, or £20.3bn, and European equities accounted for only 12 per cent of the portfolio. Despite the decrease in inflows, client retention remained strong at 95.1 per cent, and outflows were stable at 5.1 per cent.

FitzPatrick attributed this to business simplification, improved efficiency, and the creation of new investment opportunities. However, analyst Max Harper from Third Bridge warned that concerns around tax were pushing customers towards seeking advice, and St James's Place's charges still remained expensive compared to other market segments.

Harper also suggested that consumer duty has brought fees into the open, with outflows posing a potential threat, and differing generational approaches to wealth management could lead younger prospective clients to manage their own portfolios.