Financial Results

Provision Pushes SJP Into 2023 Loss, Slashes Dividend; Shares Fall

Tom Burroughes Group Editor London 29 February 2024

Provision Pushes SJP Into 2023 Loss, Slashes Dividend; Shares Fall

The firm's CEO said its investigation into how it treated clients revealed that client servicing was "less complete" in the period before it invested into its Salesforce CRM in 2021. The firm has made a £426 million provision for potential client refunds.

St James’s Place, the UK-listed wealth manager, yesterday logged a IFRS loss after tax of £9.9 million ($12.53 million) resulting from a £426 million provision for potential client refunds. It slashed its dividend, sending shares down by 18.5 per cent yesterday.

The firm said it made a pre-tax underlying cash result of £483.0 million, down a touch from £485.5 million a year before, reflecting growth in average funds under management and management of controllable costs.

SJP received a significant increase in the number of client complaints late in 2023 – clients queried whether they had received a sufficient level of service. 

Mark FitzPatrick, CEO, said its investigation showed “our evidence of ongoing client servicing was less complete in the years preceding investment into our Salesforce CRM system in 2021...Looking forward, the investment we’ve made into Salesforce means we are confident this is a historic issue.”

The firm has also adjusted its fees to take into account the new Consumer Duty regime that took effect at the end of July 2023.

The group said that its full-year dividend of 23.83 pence per share had fallen from 52.78 pence per share.

In other figures, SJP said it achieved 3 per cent net growth in qualified advisor numbers to 4,834.

FitzPatrick said the provision and declining expected profit growth as it moves to a new charging structure will hamper long-term investment in the business.

“In the near-term, we expect the industry outlook to remain challenging given the pressures that clients continue to face. The near-term environment notwithstanding, the longer-term structural opportunity for the financial advice industry is hugely attractive,” he said. 

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