St James’s Place, the UK wealth manager, is confident it will keep the freedom to run its client affairs as its majority owner, UK bank HBOS, is taken over by rival bank Lloyds TSB.

HBOS currently owns 60 per cent of St James’s Place. When HBOS is acquired by Lloyds TSB, that stake will be held by the enlarged banking group and there will be no change in the amount of influence the new owner can have over the wealth manager, Mike Wilson, chairman of St James’s Place, told WealthBriefing.

“We have a relationship agreement and that gives us enormous protection. They [majority owners] can only have three out of 13 directors on our board,” Mr Wilson said. “HBOS have been very good shareholders from our point of view,” he said.

Mr Wilson was commenting after the wealth manager reported yesterday that its funds under management at the end of September this year fell by 9 per cent from the end of 2007 to £16.5 billion. Meanwhile, new business, based on regular premiums and a tenth of single premiums – the standard industry measure – was flat in the third quarter of this year from the same quarter a year before. This contrasts with forecast fall of 4 per cent, according to analysts’ consensus forecasts, Mr Wilson said.

“We have done very well in very strong equity markets in the last few years but also shown we have held up well in a very tough environment as well,” he said.

The wealth manager – which originally was founded under the name James Rothschild Assurance in 1992 – has notched up a 20 per cent annual compound growth rate in new business during its lifetime, Mr Wilson said.

He said the firm’s strengths in areas such as pension investment management had proven valuable, since many investors who had avoided the residential and buy-to-let markets have chosen to put money into tax-advantaged pension savings vehicles instead.

In its results statement, St James’s Place said it posted a 28 per cent rise in new business on the same nine-month period of last year and logged “strong” retention of client business.

Pension investments increased across both regular and single investments, with total business up 30 per cent in the third quarter and 20 per cent for the year to date.

“We continue to see strong demand from clients to invest for their long term future and to utilise the tax advantages of pension savings,” the firm said in its statement.