St James's Place  

Referrals behind up to 40% of SJP flows

Referrals behind up to 40% of SJP flows
Andrew Croft, CEO of St James's Place

Introductions and referrals at advice giant St James’s Place constitute approximately 35 to 40 per cent of new fund flows, according to the firm's chief executive officer Andrew Croft.

In a Q&A session today (July 28), Croft was asked what proportion of flows came from new clients versus existing clients following the firm's half year results out this morning.

Croft said about 50 per cent came from existing clients, with a further 35 to 40 per cent coming from introductions and referrals from existing clients, and the rest coming from other marketing-led client acquisitions.

But he said nothing had changed in this mix in recent years, other than that the firm was not able to stage all its marketing events due to the pandemic.

Croft said: “Nothing has really changed over the years and I don't think too much has changed recently.

"Other than last year, the odd marketing initiatives such as a seminar about inheritance tax, [which] because of the social distancing we weren't able to have - but it is small in terms of the sort of size of the numbers that we're talking about now.”

SJP had reached £143.8bn of FUM in the first half of 2021, after seeing £9.2bn pumped into its funds, 27 per cent more than in the previous year.

On a net basis the firm saw inflows of £5.5bn in the six months to June 30, up from £4.5bn in 2020.

Inflows and profits at SJP had suffered during 2020 after considerable market turbulence and business disruption caused by the Covid-19 pandemic.

SJP had set out three goals at the time of the 2020 results: to grow new business by 10 per cent per annum supported by a growing number of advisers, to maintain strong retention of client investments, and to continue to invest in the business to support growth while keeping its 'controllable' expense growth at around 5 per cent per annum.

On the call Croft was also asked about the firm's retention outlook and whether it was expecting any increases in withdrawal rates over the longer term as its customer base ages.

Croft said the firm had seen people reduce the income they took from their pensions last year because they weren't spending it. 

However, SJP expects this to reverse to where it was previously. 

“Clearly, as people enter into retirement, they're going to be taking withdrawals from pension plans, etc. But the advantage of being a growth business like ours is that we're constantly adding a greater number of flows going in each year from younger clients and so that therefore is not shifting the dial at all.”

Elsewhere, research from the Centre for Economics and Business Research showed around 53 per cent of UK millionaires will be female by 2025.

Asked about SJP’s plans to cater to this growing segment, Croft said: “Being a face-to-face advice business, there is no doubt that people bond and transact with similar types of people. And so, if we want to get more female wealth then ultimately we'll need more female advisors.