St James's Place diminishes £85 million from its fund to compensate customers following a dispute over fees.
St James's Place Announces New Fee Structure and Strong Financial Performance
St James's Place, the UK-based wealth management company, has announced a series of significant changes, including a new fee structure and impressive financial results for the first half of the year.
The company's net client inflows almost doubled to around £3.8 billion, while the total managed assets jumped to £198.5 billion by the end of the period. This growth is a testament to the company's resilience and its ability to help clients navigate a complex macroeconomic environment, as stated by Mark FitzPatrick, the CEO of St James's Place.
In terms of financial performance, St James's Place recorded a 17 percent increase in underlying post-tax cash to £240.4 million. The company has also launched a £63.4 million share buyback and reduced its customer redress fund allocation by £85 million. However, it has set aside an additional £63.4 million after tax in its Ongoing Service Evidence provision, which covers redress for ongoing client service charges, following the reduction in cash reserves.
Regarding the new fee structure, St James's Place is implementing a revised charging structure, with allowance made for the reduction in ongoing charges. The initial fee for joining St James's Place will be tiered from 26 August, with rates of 3%, 2%, and 1% for sums up to £500,000. The advice charge under the new structure will be 0.8%, and the new fee structure will split out the separate costs of financial products, advice, and ongoing fund management.
St James's Place has abolished exit charges for new customers and revised its redress methodology following FCA guidance. The company is on track to deliver this programme by 2027, although a specific implementation date within 2025 was not provided. St James's Place expects its new simple, comparable charging structure to be in place from August 26, 2025.
The company is confident in delivering a plan to take around £100 million out of its addressable cost base by 2027. This confidence was reflected in the market, with St James's Place shares rising more than 7 percent on Thursday.
[1] Source: St James's Place press release, 2022. [2] Source: St James's Place press release, 2023.
- The new fee structure for investing with St James's Place includes a revised charging structure, with separate costs for financial products, advice, and ongoing fund management, and tiered initial fees of 3%, 2%, and 1% for sums up to £500,000.
- St James's Place provides financial advice for businesses and personal-finance matters, aiming to help clients navigate a complex macroeconomic environment, as demonstrated by its impressive financial performance and growth in net client inflows and total managed assets.
- In addition to the new fee structure, St James's Place has taken steps to simplify its charging structure for clients, abolishing exit charges for new customers and revising its redress methodology following FCA guidance, with the goal of a simple, comparable charging structure from August 26, 2025.
