Wealth adviser St James’s Place is in a strong position to take advantage of the government’s changing pensions and Isa rules, two City analysts have claimed.
In a Buy note from Oriel, analysts claimed that while shares in the FTSE 100 listed firm had recently been “weak”, St James’s Place was well set to “follow a continuing growth trajectory”.
It said: “St James’s Place has limited exposure to annuities, and is likely to benefit if more pensioners remain invested and drawdown, rather than buy an annuity. It has limited exposure to the 75bp cap on default investment fund in workplace pensions. It has limited operational risk if Scotland votes yes, but could be affected indirectly by a fall in markets.”
Alan Devlin and Chris Roberts, analysts for Barclays Capital, also said St James’s Place would “continue to benefit from changing regulation and the positive investment landscape in the UK”.
They said the Nisa rules would prove “positive” for the company.
Shares in St James’s Place peaked at 908p in March, following Lloyds Banking Group selling its final stake in December 2013 and strong full year results on 25 February. As at Monday 15 September, the share price was 700p.
Right to reply
Ian Price, divisional director for pensions and consultancy at St James’s Place, called the pensions changes “welcome”, as clients will have a greater freedom of choice on how they take their retirement income.
He said: “There has been a substantial reduction in the number of annuities being purchased, as clients either decide to wait until the new rules or are using the current drawdown rules to get their money.
“With increased flexibility, the need for advice at retirement will increase and it is important that individuals look at all the options to make sure that they choose the best solution for them.
“We believe the greater freedom at retirement will mean that more individuals are likely to include pensions as part of their retirement planning, alongside other vehicles such as Isas.”