St James's Place Profit Falls as New Charging Model Bites

St James’s Place (LON: STJ), the UK’s largest wealth manager, saw its shares fall on Wednesday as half-year profit dropped 9% to £278.4m, hit by lower margins under its new charging structure and a sharp drop in net inflows.

The stock traded at 1,063p by early afternoon on Wednesday, down 2% from yesterday’s close of 1,085p. It had opened at 1,115p and swung as low as 1,038.75p intraday, before recovering part of the fall as the session progressed.

SJP’s half-year results, released before markets opened on Wednesday, showed Adjusted IFRS profit before tax fell to £278.4m from £307.0m a year earlier. The company said the decline was primarily due to lower initial and ongoing margins following the simpler charging structure it introduced in August 2025, which separated advice, product and investment management charges and scrapped early-withdrawal charges on pensions and bonds.

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Net inflows nearly halved to £2.7bn from £3.8bn, even though gross inflows held steady at £10.5bn. SJP attributed the fall to market uncertainty and what it called “impending changes to the retirement savings landscape”. City AM reported the roughly £1.1bn drop in flows as linked to clients withdrawing pension money to avoid pensions becoming subject to a 40% inheritance tax charge from April 2027. The new charging model earns SJP a margin from day one on new business rather than relying on upfront fees, which mechanically depresses reported profit even as new inflows keep coming in.

Despite the profit and flow headwinds, funds under management rose to a record £240.8bn from £220.0bn at the end of 2025, helped by 16.4% annualised investment returns net of charges and improved client retention of 95.4%. Chief executive Mark FitzPatrick said: “I am pleased to report a strong set of results for the first half of 2026.”

SJP kept its interim dividend unchanged at 6.00p per share and carried out £128.1m of share buy-backs in the period. The group has reiterated its ambition to double Adjusted IFRS profit between 2023 and 2030, betting that day-one margins on new business will eventually outweigh the near-term hit from scrapping upfront charges.