UK wealth manager St James’s Place plc last week issued its interim results for the first six months of 2023, and announced a fee reduction for loyal customers, ahead of the regulatory crackdown.

Despite an increase in its funds under management in the first half of 2022, St James's Place (SJP) shares fell by around 16 per cent on Thursday after it announced plans to lower its fees on a range of investment products and after its net inflows slowed down.

Next week, the wealth manager plans to introduce an annual product management cap on bond and pension investments for clients who have been invested for 10 years. The firm charges fees for the advice it gives as well as the products it provides. Annual product management fees for long-term clients of the firm who hold bond and pension investments are to be cut from 1 per cent to 0.85 per cent, which will benefit around 65,000 clients, the firm continued. It said that adjustments to its fee structure, caused by regulatory changes, would reduce its net income by £12 million ($15 million) in the second half of the year.

The move comes ahead of the Financial Conduct Authority’s new Consumer Duty regime, which requires financial services firms to prove that they are acting in customers' best interests. A larger than expected fall in client inflows of 38 per cent to £3.4 billion, down from £5.5 billion a year earlier, is also thought to have caused the drop in its share price.

Meanwhile, the firm attracted £8 billion of new client investments during the first half of 2023, supporting an increase in funds under management of 6 per cent over the six months to a record £157.5 billion from £148.4 billion. The firm also announced a pre-tax profit of £385 million over the period, compared with a loss of £296 million at the same time in 2022.

“As we look ahead, there continue to be challenges for UK consumers, but as a long-term business our focus remains on ensuring we are well positioned to support our advisors [to] build great relationships and deliver trusted and valued face-to-face advice over time. This commitment underpins our 2025 plan and will enable SJP to capitalise on the scale of long-term market opportunity ahead," Andrew Croft, chief executive officer at St James’s Place Wealth Management, said.