St James’s Place profits hit by FSCS levy

St James’s Place profits hit by FSCS levy

St James’s Place (SJP) saw its pre-tax profits slip slightly over the past six months as the group was hit by the heightened levy from the Financial Services Compensation Scheme (FSCS).

According to the wealth management firm’s half-year results ending 30 June, the company’s profits before shareholder tax stood at £60.5m, down from the £67m reported at the same time last year.

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David Bellamy, chief executive of SJP, said the company’s financial performance was impacted “once again” by the levy charged by the FSCS, which now amounts to £17m.

However, he said: “We remain hopeful that the elevated levy imposed over the past two years will return to a more normalised level in future years.”

SJP also revealed it would ditch exit charges for clients with pension contracts written before July 1999.

This follows a review of the legacy business, which the company stated would cause a one-off cost of £8.2m.

Despite the drop in profits, the FTSE 100 wealth management group announced it was increasing its dividend, so shareholders will receive 12.33p per share, compared with the 10.72p received in 2015.

The report also revealed the company had ramped up the number of advisers it has by almost 5 per cent over the first six months of the year, to 3,259.

Mr Bellamy said SJP’s performance in the first half of the year was “testament to the reassuring consistency and resilience” of the business.

Tony Catt, compliance officer at Anthony Catt Limited, said: “It is difficult to see how the FSCS levy is calculated, and I think it should be calculated based on the complaints records of firms.”