St. James’s Place, a leading wealth-management company, has announced significant changes to its charging structures for new investment bonds and pensions. These revisions aim to streamline the company’s processes and reduce costs. While the changes will result in a temporary reduction in underlying cash, the company expects growth to accelerate in the medium term.
New Charging Structure
Under the revised structure, St. James’s Place will introduce an initial charge and continuing charges for its investment bonds and pensions. Notably, early withdrawal fees and gestation periods will no longer be applicable. The charges for all wrappers, or assets grouped into single securities, will be separated into component parts, moving away from the previous all-inclusive approach.
Implementation Costs
Implementing these changes will incur estimated costs of £140 million to £160 million ($171 million-$195.5 million) before tax. These expenses will be spread over the next three years, with approximately £10 million in 2023, £95 million in 2024, and the remaining amount in 2025.
Positive Trajectory
While the short-term impact may result in reduced underlying cash, St. James’s Place anticipates a more positive trajectory in the long term. The company expects these changes to set the stage for accelerated growth into the next decade and beyond. By focusing on value and delivering desired outcomes for clients, St. James’s Place aims to align with the ongoing expectations of Consumer Duty.
Timeline and Asset Growth
The new charging structure is set to come into effect during the second half of 2025. In the meantime, St. James’s Place has reported an increase in its assets under management over the past three months, growing from £157.52 billion to £158.57 billion. Additionally, the company achieved net inflows of £91 million.
CEO’s Perspective
Andrew Croft, Chief Executive of St. James’s Place, expressed optimism regarding the changes and the broader economic landscape. He noted signs that inflation is moderating and that the current cycle of interest rate increases may be reaching its peak. This development brings hope that clients will experience some relief from financial pressures.
