St James's Place has warned it is "not immune" to the challenges presented by the Covid-19 pandemic as the advice giant confirmed it intends to cut by a third its final dividend for last year.
In an update published to the market this morning (April 30) the wealth manager announced it would cut its final dividend for 2019 from 31.22p per share, to 20 pence per share.
The listed company said it would withhold the difference of 11.22 pence per share until the "financial and economic impacts of Covid-19 become clearer".
The announcement came as SJP confirmed its funds under management had been hit by the coronavirus outbreak, closing in the first quarter of this year at £101.7bn, a 1.7 per cent drop from the £103.5bn funds managed in the same period in 2019, and a 13 per cent drop on the previous quarter (£117bn).
Andrew Croft, chief executive at SJP, said the business was "resilient, but not immune" to the "unprecedented level of uncertainty" which could impact the market and clients in the foreseeable future.
He added: "It is therefore imperative that we have the ability and flexibility to continue providing clients with the quality of service they need through the partnership in scenarios that have the potential to become significantly more challenging.
Earlier this month the financial regulator warned against paying dividends with capital which could instead be used to protect businesses against the coronavirus crisis.
Mr Croft said 2020 was set to be a challenging 12 months and the company would make one dividend decision relating to the current financial year in February 2021.
Net inflows at SJP in the first three months of this year were up 9 per cent at £2.4bn, which Mr Croft attributed to improved investor sentiment following the UK general election outcome.
The advice giant said it had adapted swiftly to remote working in light of the national lockdown and had continued its recruitment drive online, launching virtual sessions for prospective recruits to the partnership.
Whilst the SJP academy is now operating online, the company said it had deferred new entrants into the programme until later in the year in light of "current uncertainty and logistical challenges".
rachel.mortimer@ft.com
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