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UPDATE 2-St James's Place wins market share as rivals pull back
October 31, 2012 / 7:27 AM / 5 years ago

UPDATE 2-St James's Place wins market share as rivals pull back

* New business on APE basis up 8 pct at 165.6 mln stg

* Third quarter net inflow at 750 mln stg

* Funds under management 32.8 billion stg

By Chris Vellacott

LONDON, Oct 31 (Reuters) - St James’s Place reported strong third quarter sales on Wednesday, a sign the British wealth manager is grabbing market share from rivals and benefiting from its well-heeled clientele saving more money.

Total new business grew 8 percent in the third quarter and the company also said sales had accelerated since the period ended, rising 14 percent in September alone.

Chief Executive David Bellamy said the company had benefited from a regulatory shake-up of financial product sales in the UK which is likely to increase costs and drive many rivals out of the investment advice market.

The shake-up has prompted a number of retail banks to raise the minimum investment required to qualify for advisory services or shut down advice businesses altogether.

“The banks are looking away from that middle England advice market,” Bellamy said.

This, he said, had provided St James’s Place with a pool of experienced financial advisers to recruit as well as clients looking for new fund managers.

In addition to the opportunities offered by competitors departing the industry, the demographic realities of Britain’s ageing and relatively prosperous middle classes facing tough economic times are also driving growth.

St James’s Place core clients - typically people with investible assets ranging from around 50,000 pounds to multi-millionaires - are eager to put more money to work as negative real returns on deposits eat away at their wealth.

“The new normal is becoming a reality. The economy is going to be slow, interest rates aren’t going anywhere. There’s a sense of reality now that says this isn’t going to change any time soon,” Bellamy said.

The strong sales performance helped push St James’s Place shares up more than 5 percent to 400 pence by 0910 GMT against a flat broader market.

“Q3 figures were slightly ahead of consensus on all metrics... We think the shares will perform well today reflecting the improved outlook and prospect of sales,” Numis Securities analysts said in a note to clients.

St James’s Place also reported an increase in staff recruitment during the third quarter which Bellamy said should bolster further business growth as they bring in more clients.

Total funds under management grew 6 percent to 32.8 billion pounds over the three month period, having risen 15 percent since the beginning of 2012.

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