New business at wealth management group St James's Place beat analysts’ growth forecasts, reaching £156.7 million ($258.9 million) by the end of the first quarter of 2011 - an increase of 18 per cent compared with the same period last year.

The UK-based wealth manager also reported that total funds under management increased to £28 billion, a rise of 4 per cent since the first quarter of 2010. Net inflows at the company were £800 million for the quarter.

Chief executive David Bellamy said the results were a good start to the year. “The increasing breadth of our investment proposition and the strength of our distribution leaves us well placed to deliver continued strong growth in the business going forward,” he said.

However, the firm’s shares were trading down 2.34 per cent at 346.7 pence at 16.34 BST on Thursday, as St James’s Place announced the retirement of its veteran chairman and co-founder Mike Wilson, who will leave the board at the end of the year.

The rocky performance of the firm's stock may also owe something to yesterday's news that Lloyds, which owns 60 per cent of St James's Place, posted a pre-tax loss of £3.5 billion for the first quarter of 2011, leading to speculation that the banking giant may consider disposing of its stake in the firm.

Wilson’s role will be filled by Charles Gregson, currently non-executive chairman of money broker ICAP, who will become the firm's non-executive chairman.