April 24, 2018 / 6:33 AM / 7 months ago

UPDATE 2-St. James's Place Q1 assets dip on weaker market returns

* Total funds at end-March 89.9 bln stg from 90.8 bln

* Hit by market falls; Net inflows 2.6 bln stg

* Reiterates growth target; shares down 0.4 pct (Adds detail, analyst, shares)

By Simon Jessop

LONDON, April 24 (Reuters) - St. James’s Place on Tuesday reported a 0.9 percent fall in first-quarter assets on the back of weaker markets, although the British wealth manager took in net flows of new client money.

A winner from British government moves in recent years to free up how people save for their retirement, the firm said it saw strong demand for its face-to-face advice services and reiterated its growth target for the year.

Group funds fell to 89.9 billion pounds ($125.33 billion) at the end of March from 90.8 billion at end-December after losing 3.4 billion pounds on its investments, in line with or slightly better than analyst forecasts.

During the period, Britain’s FTSE 100 fell 8.2 percent, its worst quarterly performance since the third quarter of 2011, while the pound strengthened against the dollar.

Around a quarter of St. James’s’ assets are held in UK equities.

Still, it said it had managed to take in 2.6 billion pounds of net new client money and reported a 96 percent retention rate on client funds it already had.

Some 1.6 billion pounds in inflows came from its pensions business, it said.

Under changes to rules on pension savings introduced in recent years, retirees no longer have to buy an annuity, or income for life, from an insurer and can invest anywhere they like, a process many prefer to discuss with an adviser first.

“We continue to see a growing market for trusted face-to-face financial advice and believe St. James’s Place remains ideally placed to meet this need,” Chief Executive Andrew Croft said.

“This growing market, together with the strong start we have made to 2018, reinforces our confidence in our ability to achieve our stated objective of 15-20 percent growth in gross inflows during 2018 and beyond.”

St James’s Place shares were down 0.4 percent at 0710 GMT, slightly under-performing the wider market.

JPMorgan analyst Ashik Musaddi said the company had “reported yet another solid quarterly net inflows and FUM [funds under management] data” in a note to clients, and reiterated his ‘Outperform’ rating on the stock.

$1 = 0.7173 pounds Reporting by Simon Jessop; editing by Carolyn Cohn and Jason Neely

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