St James's Place shares slump on Consumer Duty charge cap and inflows slowdown
Andrew Croft (pictured) is the CEO of St James's Place.
The firm's share price is down 15.8% today (27 July), according to Morningstar data, following the publication of its interim half-year results, which revealed plans to cap product charges at 85 basis points a year for clients who have been invested for a decade.
The change, which will benefit around 65,000 clients, will take effect from August onwards. According to SJP, the impact will be to lower the margin range on net income from funds under management by some four basis points going forward.
St James's Place makes raft of manager and remit changes to fund range
As the advice giant prepares for the introduction of the FCA's Consumer Duty rules next week, the charge cap will cost the advice giant £859.2m as an exceptional item, driving the operating loss for the period to £119.1m, down from a £914.2m in the first half of 2022.
St James's Place's funds under management rose 6% to a «record» £157.5bn in the first six months of the year, supported by positive investment performance and net inflows of £3.4bn, down from £5.5bn in the same period last year and £9.8bn in H2 2022.
After attracting £17bn in gross inflows in the six months to December 2022, the firm collected £8bn on a gross basis in the first half of 2023, down from £9.1bn in H1 2022.
The group's IFRS profit before shareholder tax was £215.7m, down 17% year-on-year. SJP said this decrease is driven by the impact of policyholder tax asymmetry, which «adversely impacts the IFRS result in periods of stronger markets or higher interest rates».
St James's Place begins hunt for Andrew Croft's successor — reports
The group's IFRS profit after tax fell 22% to £161.7 million, due to «tax asymmetry», while
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