Analysts at Panmure Liberum are optimistic about the prospects for wealth manager St James’s Place following the firms third-quarter trading update released yesterday.
St James’s Place, the UKs premier wealth manager, posted impressive results with gross inflows hitting £4.4bn over the three-month period to September, surpassing expectations from the City and reflecting a 20% increase compared to the same period in the previous year, as reported by City AM.
As the quarter concluded, managed funds increased to £184.4bn, up from £181.9bn in the preceding quarter, outpacing consensus estimates as well.
“Clients continue to put their trust in St James’s Place,” wrote the analysts at Panmure Liberum.
They also touched upon impending changes in the wealth management sector that could arise from alterations the Chancellor might introduce in the Budget targeting pension pots and inheritance tax reliefs.
The analysts hinted such reforms may ultimately benefit the group, as clients seek expert advice to comprehend and adapt to these changes.
“The need for financial advice continues to grow, and the forthcoming Budget is another clear driver of this. Quite what changes in the Budget is unknown, of course, but ‘no change’ is the least likely outcome. For those seeking to save, a trusted adviser plays an essential role,” they opined.
Chief Executive Mark Fitzpatrick also acknowledged the uncertainty presented by the upcoming Budget in his statement.
“While speculation around the forthcoming autumn budget compounds this, we know that our advisers are providing invaluable advice to our clients, helping them to navigate the uncertainty and safeguard their financial futures,” he said.
Fitzpatrick joined the firm in December last year at a time when it was still reeling from the impact of the Financial Conduct Authority’s (FCA) consumer duty rules, which forced the firm to overhaul the fees it charges clients.
St James’s Place is still in the process of reforming its fee structure, including axing its controversial exit fee, but analysts believe this could also present an opportunity.
“SJP grew faster than the industry with a product range deemed by many as opaque and overpriced. Imagine the prospects with clearer, competitive pricing,” they argued.
Analysts at Deutsche Numis concurred: “The company is a market leader in a structural growth industry”.
Its shares have risen nearly 30 per cent since the start of the year.