New clients, inflows lift St. James's Place assets to record high

[January 22, 2015]  By Nishant Kumar

LONDON (Reuters) - British wealth manager St. James's Place ended 2014 with record funds under management, boosted by increased inflows and thousands of new clients.

Funds under management rose 17 percent to 52 billion pounds ($78.7 billion), above a consensus analyst forecast of 51 billion pounds, lifted by 5.1 billion of net new money, a fifth more than the previous year.

British investors are taking advantage of reforms that have raised the amount they can put into tax-free individual savings accounts (ISAs).

Ultra low interest rates are also nudging clients to put money into investment products such as mutual funds, improving the prospects of wealth managers.

St. James's Place added more than 50,000 new clients in 2014 compared with 40,000 in 2013.

The firm confirmed its outlook for a 40 percent increase in dividend and said that despite the uncertainty that markets face in 2015, business momentum and an increasing need for financial advice would drive its future growth opportunities.

"Overall, higher AUM (assets under management) means higher earnings and cash flows and bodes well for future dividend growth," Ashik Musaddi, an analyst at JPMorgan Cazenove wrote in a note, reiterating his "overweight" rating on the stock.

St James's Place, which offers an upmarket investment management service and outsources the running of a range of funds to external managers, said it retained 96 percent of its clients funds under management last year.

"What would drive our business forward is the 10 percent extra partners or advisors that we start the year with and the fact that people need to save for their retirement," Chief Executive David Bellamy said in a telephone interview.

"The relationship-based, personal face-to-face advise, that's the market we operate in and we are more convinced than ever that there's a good place for that in the U.K. financial services, wealth management (sector)."

Britain raised the maximum amount an individual can put into ISA account to 15,000 pounds from 11,800 pounds on July 1 last year to encourage people to save for retirement.

The firm's shares were up 0.3 percent at 829.5 pence by 1138 GMT, in line with the FTSE 100 Index.

The 2014 figures for the firm highlight the trend of rising assets, which have grown by an annual 19 percent over the past 10 years, the money manager added.

($1 = 0.6608 pounds)

(Editing by David Goodman and John Stonestreet)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.