View more on these topics

SJP distribution arm profits down 13% to £5.3m

Bellamy David SJP 480

St James’s Place has announced a 13 per cent decline in pre-tax profits for its distribution arm, from £6.1m in 2011 to £5.3m for 2012.

The firm’s end of year results, published this morning, show an overall profit before shareholder tax increase of 22.7 per cent for the combined life, unit trust and distribution business from £109.7m to £134.6m.

The number of SJP advisers was up 8 per cent to 1,788 for the year while the number of diploma qualified advisers and support staff now exceeds 2,000.

The firm reports total FSA and FSCS costs of £9m for 2012, a 50 per cent increase in the £6m for 2011.

Chief executive David Bellamy says: “We believe that we are uniquely positioned in the UK wealth management market because we have chosen to promote our services exclusively through our dedicated adviser team, the St James’s Place Partnership. Increasing the number of partners and providing them with the tools and support to deliver high quality outcomes for clients are key drivers to our achieving our long term business growth objectives.”

The firm increased its full year dividend 33 per cent, from 8p to 10.64p.

Total single investments rose 13 per cent to £5.88bn and total funds under management were up 22 per cent by the end of the year to reach £34.8bn.

Bellamy says: “The continuing growth and maturity in funds under management has, as expected, translated into strong growth in the cash result.  Consequently we have been able to grow dividends by 33 per cent in each of the last three years and have the confidence today to signal a similar significant increase for 2013.”


News and expert analysis straight to your inbox

Sign up


There are 5 comments at the moment, we would love to hear your opinion too.

  1. No wonder David Bellamy has an all year round tan. I think I would too if I charged my clients like SJP do.

    Maldives at Easter again David?

  2. RegulatorSaurusRex 28th February 2013 at 9:44 am

    Despite all the ‘switching’ (used to be called churning) the firm still only manages a profit of less than £2,500 per head.

  3. SJP Partnership have a business model that works for those that buy into it. However, my area of concern is the fact that they have been fined twice by the regulators in the past for churning. They have recruited a lot of former IFA’s in the run up to the implementation of the RDR. The question is what will these former IFA’s do in relation to existing funds under managemen? Will they leave them where they are and be unable to provide ongoing advice in relation to them, or will they switch them to the SJP best of breed funds? I know that SJP have an arrangement with a firm called Policy Services. However, this only comes into play as a means of retaining existing renewal commission. As such there is a great temptation for these former IFA’s to switch funds when there is no real benefit to the client.

  4. Profit 5.3m and FSA/FSCS costs 9m
    What happens when the FSA/FSCS increase their fees to replace the loss of income from Bank and IFAs. Margins are going to get very squeezed if the regulation costs increase by another 25% to make up their shortfall

  5. Splitting out distribution from the rest of the company and attributing costs and profits to it is largely an exercise in accounting. The new RDR rules expect a vertically integrated firm to make sure it’s distribution charges are reasonable and they have clearly done this.

    Anything that remains can be loaded into the products and they have clearly done this too. If it wasn’t done this way then the adviser charges to clients would be astronomical.

    As Anon 10:15 points out, what is more worrying for the industry as a whole is the sheer scale of the direct regulatory costs (i.e. not including SJP’s internal compliance). Whilst SJP are obviously in a position to afford it, how many others can on a sustainable basis?

    Regulating pockets of the financial services industry out of existence because of costs is developing into a serious issue. And not just for firms – the list of consequences for clients are potentially catasptrophic as well.

    This needs to be addressed before it becomes too big and too late.

    The objectives of the FCA are:

    1. Protect consumers
    2. Promote competition
    3. Enhance market integrity.

    I would boldy suggest that the issue of costs engages all three of these objectives.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm