January 24, 2013 6:54 pm

Shake-up lifts sales at St James’s Place

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The chief executive of St James’s Place said the wealth manager cum pensions provider was benefiting from “strategic disarray” in the financial advice market as he unveiled another jump in sales.

Business brought in by the 140 sales agents that St James’s Place has recently recruited helped assets under management rise by a fifth over the past year.

Shares in the FTSE 250 company, majority owned by Lloyds Banking Group, rallied 4.8p on Thursday to close at 461.4p – just 5 per cent shy of highs of 484p reached in 2007.

Lloyds has for several months been considering selling part of its 57 per cent stake, a move that would help the bank shore up its capital position amid regulatory scrutiny.

On Thursday, Lloyds would say only that it was “comfortable” with its holding, which was originally bought by HBOS in 2000 and whose future is an important consideration for other St James’s Place investors.

Analysts raised their profit forecasts for St James’s Place on Thursday after new business sales on an annual premium equivalent basis rose 46 per cent from a year ago to £223.8m in the fourth quarter.

David Bellamy, chief executive, said the company was benefiting from turmoil among independent financial advisers, which have been through a regulatory shake-up.

The Financial Services Authority’s Retail Distribution Review, which came into force on the final day of 2012, puts several restrictions on advisers and bans them from receiving commission payments.

St James’s Place “partners” make no secret of the fact they are tied to the group, making them “restricted” agents.

About half of the group’s recent sales recruits, which brings the total number of partners to about 1,800, were former IFAs who felt “very vulnerable” because of the new rules, Mr Bellamy said.

The others used to work for high street banks, which he claimed were increasing the minimum level of funds required by individuals seeking face-to-face advice.

A net £1.1bn inflow of funds in the fourth quarter, as well as rising equity markets, helped the value of assets that St James’s Place manages rise from £28.5bn a year ago to £34.8bn by the end of 2012.

Mr Bellamy said the group, which has more than 200,000 wealthy clients, had also benefited from rising confidence among investors after concerns over the eurozone debt crisis eased in recent months.

Deutsche Bank is forecasting pre-tax profits to rise from £110m a year ago to £135m.

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