St James’s Place suffers £1bn hit to flows as investors look to dodge pension tax
St James’s Place took a £1bn hit to net inflows in the first half of the year as investors pulled cash from its funds to dodge market volatility and a looming pension tax bill.
Net inflows declined from £3.8bn to £2.7bn in the first half of the year, in line with analyst expectations. The group pinned the decline on market uncertainty coupled with “impending changes” to the retirement and financial planning landscape.
From April 2027, pensions will fall within the scope of inheritance tax leading to savers opting to take money from their pots before the 40 per cent levy takes effect.
Profit before tax also took a hit as the company overhauls its fee structure, falling to £278.4m from £307m the prior year. Key changes included separating charges into components and removing early withdrawal charges on pensions and bonds.
The group also decided to pay advisers ongoing advice fees on a monthly basis rather than annually as of next March.
The FTSE 100 group announced an interim ordinary dividend of 6p per share and a fresh share buyback programme totalling £128.1m.
Shares declined 3.9 per cent in morning trading to 1,042p. The stock is down 26.8 per cent since the start of the year.
Advice and retention
The upheaval of the UK tax system increased customer retention across both its adviser and client channels, as customers sought financial advice.
Adviser numbers inched up to 4,951 in the first half of the year, up from 4,934. Client numbers swelled to 1,064,000 from 1,037,000.
This also led funds under management (FUM) to a record £240.8bn from £220bn at the end of 2025, driven by a 16.4 per cent annualised investment return and 95.4 per cent FUM retention rate.
Mark FitzPatrick, chief executive officer of St James’s Place, said the group is “confident in the long-term outlook for financial advice, which is under-penetrated in the UK”.
He said: “As the industry evolves, clients will demand trusted advice, high-quality service, strong investment solutions and modern technology.”
Gross inflows remained steady at £10.5bn.