UPDATE 1-UK wealth manager St James's Place assets rise 27 pct

Thu Jan 23, 2014 4:48am EST

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By Chris Vellacott

LONDON Jan 23 (Reuters) - British wealth manager St. James's Place reported a 27 percent rise in assets boosted by robust sales in 2013, as thousands of affluent new clients joined from smaller rivals struggling with regulatory reform.

In its first earnings statement since former majority owner Lloyds Banking Group sold the remainder of its stake in December, the company said sales rose 16 percent last year.

This helped fuel a 4.3 billion pounds ($7.1 billion) net inflow of funds which, boosted by the lift from rising markets, brought total assets to 44.3 billion pounds.

St James's Place, which offers an upmarket investment management service, has weathered a regulatory shake-up of financial services in the UK known as the Retail Distribution Review (RDR).

This has left many smaller financial advisers struggling under more onerous rules on qualifications and a ban on commission-based selling.

"St James's Place has emerged in terrific shape from RDR, with its focus on face-to-face advice undiminished," said Shore Capital analyst Eamonn Flanagan in a note to clients

Ultra-low interest rates since the 2008 financial crisis has also favoured St James's Place, prompting people to shelter their money from inflation by investing more of it in mutual funds.

Chief Executive David Bellamy said the firm, which outsources the running of a range of funds to external managers, took on 40,000 new clients last year.

Majority owner Lloyds' exit left asset manager Threadneedle as its largest shareholder with 5.4 percent, according to Thomson Reuters data, and increased the number of St. James's Place shares available for investors to trade.

"We are 100 percent liquid on the markets now," Bellamy told Reuters, adding that not having a majority owner to answer to leaves him more free to explore the next step for the business.

Lloyds' departure also saw several U.S. institutional investors buy into the company, Bellamy said, with BlackRock , the world's largest money manager, Fidelity and William Blair funds among those taking stakes.

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