James Hay  

Base rate cut costs James Hay £1.5m

Base rate cut costs James Hay £1.5m

James Hay has revealed the impact of the base rate cut to their coffers.

In a trading update James Hay and Saunderson House announced total assets under administration and advice increased to £26.4bn by the end of October.

Despite the shock of the Brexit vote, total assets at the financial advice group and retirement provider were up 8 per cent since 30 June 2016 (£24.4bn) and up 12 per cent since December 2015 (£23.5bn).

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Assets under administration in James Hay, as of 31 October, increased to £21.9bn (December 2015, £19.5bn), with net inflows of £1.4bn in the 10 months to 31 October. 

The growth in assets under administration was achieved despite slower than projected growth in client numbers, reflecting the increase in case sizes together with additional contributions from existing clients. 

Client numbers were materially unchanged, with additions (8 per cent annualised) and attrition (6.8 per cent annualised) broadly offsetting.

But the reduction in the UK base rate will impact James Hay revenue in the second half of 2016 by £1.5m.

According to bosses, James Hay will conduct a review of pricing for 2017 “to ensure we continue to provide a safe and secure service for our clients, as well as an appropriate return for shareholders.”

Saunderson House continues to grow and now serves 1,945 clients, up from 1,809 in December 2015, with new client wins year to date of 182, and with attrition remaining at immaterial levels.

Assets under advice in Saunderson House are now £4.5bn, up from £4bn in December 2015.

John Cotter, parent group IFG’s chief executive, said: “Continuing market uncertainty, the impact of Brexit on client activity, and changes to interest rates are impacting the group revenue growth trajectory. 

“In particular, revenue growth has slowed in James Hay compared to 2015, and our continued investment in that business, together with the fall in interest rates, has lowered its profits compared to the prior year. 

“Our strategic focus remains unchanged. The group is well positioned with two profitable businesses, each serving clients with distinctive propositions in attractive segments of markets with strong underlying fundamentals. 

“As we move into 2017 we are looking to accelerate the implementation of our strategy and will continue to invest in both businesses to position the Group for future growth.”

emma.hughes@ft.com