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Is St James’s Place bridging the advice gap?
by Danielle Levy on Nov 05, 2013 at 13:19
St James’s Place (SJP) once again exceeded expectations with another round of bumper results last week, and many are tipping further growth as the firm exploits a growing ‘advice gap’.
The restricted advisory firm continued its upward ascent in the third quarter with £1 billion net inflows, bringing total assets up to an all-time high of £41.8 billion, a 20% increase over the year.
New business single investments were up 27% to £1.7 billion and the figure on an annual premium equivalent basis, a method of standardising sales, was 23% higher at £203.9 million. Within this, the share of new business shifted from pension products toward higher margin investment products.
Although some expected the introduction of the retail distribution review (RDR) and the transparency it enforced on charges to put the brakes on the company’s momentum, if anything the regulation has been a boon. But with the share price at 668p, up almost 60% since the beginning of the year, can St James’s Place sustain the momentum its investors have become accustomed to?
He said the business is helping to alleviate a post-RDR advice gap and expects its presence in the sub-£500,000 client bracket – where banks and investment managers have been withdrawing – will drive growth further from here.
‘They are very well positioned at the moment. More of the larger organisations are withdrawing from running money for individuals with under a quarter or a half of a million. There is underlying growth because more people want to look after their money and generate returns on their savings,’ he said.
‘This is a growth area in itself and on top of this situation the typical competitors of St James’s Place in years past are not involved in the market any more.’
After the company posted growth of 20% for the past year, he says investors need to be prepared that this is likely to slow, however.
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