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Regulatory costs weigh on SJP as assets rise 27%

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Regulatory costs weigh on SJP as assets rise 27%

St James’s Place's (SJP) distribution arm suffered a £6.1 million loss in 2013 on the back of increased adviser expenses and regulatory fees.

Nonetheless, the restricted network saw asset growth continue through the course of 2013, rising to £44.3 billion in its annual results, representing a 27% increase on 2012. This was boosted by the £7.2 billion of new investment and pensions business, up 22% on the £5.9 billion made in 2012.

Net inflows, which also include retention of existing business resulted was at £4.3 billion, up 28% on 2012.

The news comes as the firm said it has set its sights for global expansion as it closes in on acquiring a Far East advisory business.

SJP said it has almost completed acquiring the business with offices in Singapore, Hong Kong and Shanghai for expatriates.

David Bellamy (pictured), chief executive of SJP, said the company sees the opportunity to expand to overseas and the acquisition should be finalised in the first quarter of 2014.

‘We now offer the most comprehensive geographic access to wealth management advice in the UK. Nothwithstanding the fact that we remain very focused on our UK business, we see an opportunity to expand our service overseas to the expatriate community.

‘This is an exciting development for us that we believe sits perfectly with our comprehensive investment approach.’

The restricted network reported a £6.1 million loss for its distribution business in its 2013 full year report, falling from the £5.3 million profit it reported in 2012. SJP said this was down to higher expenses in the year due to a higher number of partners, which increased 10% to 1,958 over the period.

However the company said it expected the benefit from the investment in recruitment would mean the overall loss could be mitigated by higher levels of income from its adviser partners.

The result was also impacted by a £5.5 million Financial Services Compensation Scheme levy, although this was down on the £6.2 million SJP paid out in 2012.

SJP said although the Retail Distirbution Review (RDR) had a ‘neutral’ impact on the group, the changes in the nature of cashflows meant there was limited reallocations of income and expense across which also contributed to the loss.

The company also reported a one-off cost of £6.2 million due to former shareholder Lloyds Banking Group’s selling off its 57% stake in SJP in three rounds over 2013.

At 8:30 SJP's share price was up 3.7% on the day, trading at 823.5p.

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