St James’s Place (LSE:STJ) reported a decline in third-quarter net inflows on Thursday, despite funds under management reaching a record £242.44 billion. Shares in the UK wealth management company fell as much as 5.6% during trading and were last down 3.8% following the announcement.
Third-Quarter Net Inflows Decline Year Over Year
Net inflows for the three months ended September 30 totalled £570 million, compared with £1.76 billion in the corresponding period last year, representing a decline of approximately 68%.
The company attributed the year-on-year comparison partly to elevated activity during the prior-year quarter.
Gross inflows reached £5.15 billion, down from £5.70 billion a year earlier, representing a decrease of approximately 9.6%.
Chief executive Mark FitzPatrick described the previous year’s quarter as an “exceptionally strong comparative period last year,” citing increased client activity associated with the introduction of St James’s Place’s revised charging structure.
Gross inflows for the first nine months of the year totalled £15.6 billion.
Funds Under Management Rise to Record Level
Despite the reduction in quarterly net inflows, St James’s Place reported that funds under management increased to £242.44 billion at September 30, compared with £212.36 billion a year earlier.
The increase of approximately 14.2% reflected a combination of positive client investment returns and additional net inflows, according to the company.
The reported total represents a new high for the wealth manager’s assets under administration.
Annualised Net Inflow Rate Falls to 2%
For the year to date, net inflows represented 2% of opening funds under management on an annualised basis, compared with 3.9% in the equivalent period last year.
Client retention remained broadly unchanged, with the year-to-date rate reaching 95.1%, compared with 95.2% in the previous year.
FitzPatrick said client outflows remained broadly stable when measured relative to total funds under management.
Client Advisory Activity and Market Conditions
According to FitzPatrick, the company’s financial advisers spent the third quarter assisting clients in navigating market volatility and providing guidance ahead of the UK Autumn Budget.
The chief executive also linked the comparison in gross inflows to the previous year’s introduction of the company’s new charging structure, which had contributed to higher levels of client activity during that period.
The latest trading update therefore showed lower quarterly gross and net inflows alongside an increase in total funds under management and a largely unchanged client retention rate.
More About St James’s Place
St James’s Place (LSE:STJ) is a UK wealth management company providing financial advice and investment management services to clients. Its reported performance measures include gross and net client inflows, funds under management and client retention.
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