CAPITAL MARKETS BRIEFING/media/Files/... · 2016. 11. 23. · 31 December 2008 £’billion Year Ended 31 December 2007 £’billion Opening funds under management 18.2 15.4 New money

CAPITAL MARKETS BRIEFING31st OCTOBER 2016

1.6 1.7 1.6

1.91.9 1.9 2.0 2.12.12.3 2.3

2.52.4

2.8 2.8

Q1 Q2 Q3 Q4

2013 2014 2015 2016

Gross Inflows by quarter

2013 over 2012 +28% +22% +27% +11%

2014 over 2013 +15% +17% +19% +12%

2015 over 2014 +12% +17% +20% +20%

2016 over 2015 +16% +23% +21%

0.91.03 1.05

1.191.19 1.25 1.261.391.32 1.35

1.481.63

1.36

1.71 1.66

Q1 Q2 Q3 Q4

2013 2014 2015 2016

Net Inflows by quarter

2013 over 2012 +29% +26% +41% +9%

2014 over 2013 +26% +20% +23% +14%

2015 over 2014 +9% +14% +17% +17%

2016 over 2015 +3% +25% +12%

+35%+9%

+9%

+21%

+16%

+17%

+20%

£0bn

£2bn

£4bn

£6bn

£8bn

£10bn

2010 2011 2012 2013 2014 2015 2016Sept

Gross Inflows YTD – up 20% at £8.1bn

+34% -11%+31%

+30%+10% +4%

+28%

+20%

+14%

+14%

£0bn

£2bn

£4bn

£6bn

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept

Net Inflows YTD – up 14% at £4.73bn

22%p.a. compound growth over the last

5 years and 17%p.a. over 10 years (at September 2016)

Funds under management

+25% +18% -10%+31%

+26% +6%+22%

+27%+17%

+13%

+22%

£0bn

£20bn

£40bn

£60bn

£80bn

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept

71.4

Admin Platform

People

&

Culture

Academy

IMAClients

&

Value

Recruitment

Products & Services

Risks & Regulatory

Environment

Marketplace

Opportunities

&

Threats

Partnership

&

Development

Capital ManagementCash-flow &

Dividends

Asia / Middle East

Admin Platform

People

&

Culture

Academy

IMAClients

&

Value

Recruitment

Products & Services

Risks & Regulatory

Environment

Marketplace

Opportunities

&

Threats

Partnership

&

Development

Capital ManagementCash-flow &

Dividends

Asia / Middle East

TONY DUNK

Investor Relations Director

£0bn

£2bn

£4bn

£6bn

£8bn

£10bn

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept

Gross inflows

-9%

A PEOPLE BUSINESS

EMOTIONAL VS ARTIFICIAL

“The price is what you pay…value is what you receive”

Don’t have the time inclination, confidence or

knowledge to make their own financial decisions

• Pension freedom

• Brexit – Property funds

“WE WERE PARTICULARLY PLEASED

TO RETAIN 95% OF CLIENTS’

EXISTING FUNDS DURING 2008.

RETENTION OF FUNDS UNDER

MANAGEMENT IS NOT ONLY A GOOD

MEASURE FROM A PROFITABILITY

POINT OF VIEW BUT IS ALSO A GOOD

INDICATOR OF THE STRENGTH OF

RELATIONSHIPS THE COMPANY HAS

WITH ITS CLIENTS”.

Year Ended

31 December 2008

£’billion

Year Ended

31 December 2007

£’billion

Opening funds under

management

18.2 15.4

New money invested 3.0 3.1

Investment return (3.6) 0.9

17.6 19.4

Regular income withdrawals/

maturities

(0.4) (0.3)

Surrender/part surrenders (0.9) (0.9)

Closing funds under management 16.3 18.2

Implied surrender rate as % of

average funds under management

5.2% 5.1%

Client wealth account survey

Do you feel the St. James’s Place proposition provides value for money?

Good

Reasonable

Poor

Excellent

Things our clients value

• Working with someone they trust

• Dealing with complexity

• Taking away the worry

• Having a plan – managing the risks

• Getting things done

• Dealing with life’s uncertainties

• Peace of mind

What’s important about SJP

• Highly respected

• ‘Big’ – FTSE100

• £71 billion of client funds under management

• Resources to do vital things well

• Suitability of advice guaranteed

• Access to advice throughout the UK (and now Asia)

19

Geographic Distribution

Partners

5%

2%

17%

23%

12%4% 4%

21%

9%Overseas Partners: 3%

Clients

Overseas Clients: 2%

6%

2%

13%

24%

14%

3% 4%

22%

10%

What’s important about SJP

• Highly respected

• ‘Big’ – FTSE100

• £71 billion of client funds under management

• Resources to do vital things well

• Suitability of advice guaranteed

• Access to advice throughout the UK (and now Asia)

• Partner succession

• Technical expertise

Global Investment Management Expertise

Benefits of investment management approach

• Above average investment returns (net of charges)

3.5

5.8

6.8

7.8

9.1

6.3 6.4 6.3

3.7 3.7

5.3

6.47.1

6.4

5.3

6.4

0%

2%

4%

6%

8%

10%

Defensive Conservative Balanced Managed Adventurous ImmediateIncome

BalancedIncome

DeferredInome

St. James's Place ARC PCI Peer Group Average

Annualised 3 year performance

St James’s Place Portfolio vs ARC Private Client Investment peer groups

Source: FE Analytics, Asset Risk Consultants (ARC) Private Client Indices and SJP internal data. Data to 30 September 2016

Benefits of investment management approach

• Above average investment returns (net of charges)

• Exclusive funds and top fund managers

• Rigorous selection and ongoing monitoring

• Lower investment management fees

• Seamless change

Client wealth account survey

Knowing everything you know of the St. James’s Place proposition,

would you recommend it to others?

Yes, but Ihave yet to

do so

37%

No 5%

Yes I would, and havealready done so

58%

TONY WICKENDENTechnical Connection

Tax alpha

Investment

Performance

Tax

Optimisation

Optimised Client

Outcomes

Aggressive tax avoidance

Acceptable tax planning and tax structuring

Tax alpha

So where does this leave us?

BORING IS THE NEW EXCITING

The boring list…

• Pensions

• ISAs

• Collectives

• Bonds

• BPR Schemes

• VCT /EIS

• Gift trusts /Loan Trusts /DGTs

• Life Insurance

• You get the picture ?

Comparison grid

INVESTMENT / ACCUMULATION PERIOD WITHDRAWAL

Diversified

spread of

underlying

investments

possible

Tax relief

on

investment

Investor

access

Tax on

income

Tax on

Capital

Gains

IHT Tax on

income

Tax on

Capital Gains

IHT on

death

Other tax on

death

REGISTERED

PENSION

YES YES YES NO NO NO YES NO NO POSSIBLE

(DEATH 75+)

ISA YES NO YES NO NO YES NO NO YES NO

UK COLLECTIVES YES NO YES YES NO YES YES YES YES NO

OFFSHORE

REPORTING FUND

YES NO YES NO NO YES YES YES YES NO

OFFSHORE NON-

REPORTING FUND

YES NO YES NO NO YES NO INCOME YES YES NO

UK INVESTMENT

BOND

YES NO YES YES YES YES NO INCOME YES YES NO

OFFSHORE

INVESTMENT

BOND

YES NO YES NO NO YES NO INCOME YES YES NO

VCT NO YES YES YES NO YES NO NO YES NO

EIS NO YES YES YES YES NO YES NO NO NO

AIM STOCK NO NO YES NO YES NO YES YES NO NO

PROPERTY NO NO YES NO NO YES YES YES YES NO

CASH NO NO YES NO NO YES YES YES YES NO

1996 – 2016 – Timeline of industry events

Extension of DOTAS to

IHTand

UCITS IV adopted

Barclays launches

Web ETFs, rebrands to

iShares(sold to

BlackRock)

Bank of England given independence over monetary policymaking

Abolitionof Advance

Corporate Tax and repayable

tax credit;on dividends

reduced to 10%

Married couples

allowance withdrawnfor couples

under 65

UCITS III adopted;

stakeholder pension

introduced

The Sandler Report

CP121 de-polarisation

‘Introduction:Stamp Duty Land Tax

DOTAS regime; special income /

capital gains tax

Introduction:pre-owned Asset Tax

Whole sale reform of the taxation oftrusts for IHT

Introduction: transferablenil rate band

CGT reforms:

entrepreneurs relief/single18% rate of

CGT

Introduction: new rules on ‘same-day additions’ for

trusts; 10% rateon savings

income abolished

Intro:dividend

allowance for individuals; higher ratesof SDLT for2nd homes

Securities Investment Board (SIB)

becomes Financial Services

Intro: 50% additional rate of income tax / 28%

rate of CGT for trustees and higher /additional rate tax

payers

Reduction in rate of income

tax from 50% to

45%

Intro:GAAR and Statutory

Residence Test

PensionsAct:

auto-enrolment from 2012

Finance Act: amends to simplified

regime

Welfare Reform and Pensions Act:

created stakeholder

pensions and pension-sharing

on divorce

Pensions Act: state pensionage reforms /

indexationmove to CPI

Finance Act: cut lifetime

allowance by 20% to £1.5m

from 2012-13 / annual

allowance by 80% to £50,000 from 2011-12

Finance Act: ‘Special annual

allowance’ for income over

£150,000

FinanceAct:

pensions simplification

Pension Act: legislates

for endof money purchase

contracting out

Finance Act marks the start of ‘pension

flexibility’; implementation

from 2015

Cut in lifetime allowance to £1m from 2016-17

Finance (No.2) Act Reform of annual allowance calculation

and taper from 2016-17

Start of NEST and

auto-enrolment

Child Support, Pensions and

Social Security Act: reworked SERPS into S2P

Finance Act: Lifetime allowance cut to £1.25m and annual to £40,000

from 2014

20111996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2015 20161997 2010 2012 20132009 2014

…..And there’s no let up in sight

2016/17

• Personal Savings Allowance

• CGT change

• Dividend tax change

• Residence nil rate band: downsizing provisions

…..And consultations including

• Domicile

• Investment bond taxation

• Salary Sacrifice

• Disguised remuneration

• Personal Portfolio Bonds

Helping our clients to make hard choices

• Where to invest company or personal money when caught by

the annual or lifetime allowance

• How and when to take money from your pension investments

• Whether and how to “wrap” your lump sum investments

Helping our clients to make hard choices

• How best to effect employer paid life cover to minimise net

cost?

• How to invest tax effectively for children while retaining

control?

• Which estate planning solution can deliver IHT efficiency with

investor control (and access)?

Tax alpha delivered

Get it wrong Get it right

£100

£60 £100

+66%

OUR TEAM SUPPORTING PARTNERS

Technical Connection Division

TCD key suppliers

T

C

D

Knowledge

Know how

Pro activity (ideas)

Availability

Confidence

Creativity

Credibility

Clarity

C

L

I

E

N

T

S

P

A

R

T

N

E

R

S

• Complex

• Consequences *

• Can’t **

* Financially detrimental if you “get it wrong”

** Readily “self service” answers

£

What do we deliver?

T

C

D

P

A

R

T

N

E

R

S

H

I

P

Access to knowledge

Business class CPD

Consultations

Business Generation

PQ Support

Answers to questions

The Value delivered by technical excellence

• Excellent client outcomes

• Reduced risk

• Increased productivity/profit

• Partner attraction/retention

JONATHAN MCMAHONJoint Chief Operating Officer

Overview

• Our community

– Employee engagement

– Apprentices and Graduates

• Our work in our communities

– The Foundation

– Corporate Social Responsibility

The SJP community

• Number of Practices – 2,320

• Number of Advisers – 3,259

• Number of Partner Support Staff – 4,645

• Number of Employees – 1,472

• Number of Employees in our key third party providers – 1,608

The SJP employee community

• 21 Locations in UK and 3 in Asia

• Supporting advisers in these areas:

– Client Services & Administration

– Legal

– Marketing

– Risk & Compliance

– Tax & Trust etc.

– Technology

– Training & Development

• Average age of employees – 41.8

• Average length of service of employees – 5.4 years

Physical investment in our premises

2016 survey headlines

EMPLOYEE

ENGAGEMENT

INDEX 86%-1 vs. 2014

Some key scores % positive

53. I feel proud of the work SJP does to help others through the

SJP Foundation 96%

4. I understand how my work contributes to the success of the

organisation 94%

45. I believe the fair treatment of clients is central to our culture 94%Engagement levels have remained high since 2014,

with SJP employees understanding how their

work contributes to SJP’s success and

believing that the fair treatment of clients is

central to the culture.

Vs. financial services benchmark

Questions most above Benchmark %

positive

Vs.

benchmark

62. I would recommend SJP as a great place to

work88% +21

63. I feel a strong sense of belonging to SJP. 83% +17

37. I am satisfied with the total benefits package 93% +17

61. I feel proud to work for SJP 92% +15

64. I intend to still be working for SJP in 12

months’ time.88% +13

32. During my last performance appraisal my

manager helped me to focus on developing

my performance.78% +12

48. I believe I am valued for what I can offer

SJP.77% +12

40. I have confidence in senior managers to lead

us effectively through the good times and the

bad. 82% +12

86%Question score 5 or more points above Benchmark

31 questions

were comparable

19

13

0

Question score within 5 points of the Benchmark

Question score 5 or more points below Benchmark

4 of the top 5 results relative to the norm

were engagement questions – indicating high

levels of engagement relative to other

Financial Services companies.

Vs. Financial services benchmark

I feel a strong sense of belonging to SJP

I still intend to be working for SJP in 12 months’ time

EMPLOYEE

ENGAGEMENT

INDEX 86%

Sustaining high levels of engagement can be a challenge and

although questions in the engagement index all perform above

the Financial Service benchmark there has been a declining

trend since 2014.

Diff vs. 2014 Diff. vs.

Financial

Diff. vs.

Best in

Class

I feel proud to work for SJP 92% -1 +15 +2

I would recommend SJP as a great place to work 88% -1 +21 +1

I feel a strong sense of belonging to SJP 83% 0 +17 +4

I still intend to be working for SJP in 12 months’ time 88% -1 +13 +3

This organisation motivates me to go the ‘extra mile’

at work 79% -3 - +3

Working here makes me want to do the best I can 87% -2 +8 +1

Graduate and Apprenticeship schemes at SJP

Graduates

• Started in September 2014 with 3 year rotational programme - six 6-month placements across SJP

• 15 rotational graduates on programme. 12 more planned for 2017

• 100% retention to date

Apprentices

• Started in September 2012 with 5 apprentices. 19 new apprentices joined in September 2016

• Annual programme with broad range of specialisms – Accounting, IT, Marketing, Business

Administration, Financial Services, Investments

• 2016 launch of new higher level Para-planning Apprenticeship with University of Gloucestershire

• Wider outreach apprenticeship programme planned for 2017 to support and attract

socioeconomically disadvantaged young people

Higher education partnerships

Loughborough University

• Tailored MSc in Wealth Management – now in its third year. First intake

complete and graduate in 2017

• Leadership programmes

• Some bespoke training with the Field

University of Gloucestershire

• Paraplanning apprenticeship higher-level programme – providing skilled

apprentices for our business, tailored for SJP

• Potential for degree level apprenticeship delivery

Corporate social responsibility

• We understand that responsible management is important to

all our stakeholders – shareholders, clients, Partners,

suppliers and the communities we operate in

• St. James’s Place is committed to growing our business in a

way that considers the economic, social and environmental

impacts of what we do

Our Approach to Corporate Social Responsibility


• We understand that responsible management is important to

all our stakeholders – shareholders, clients Partners, supplies

and the communities we operate in

• St. James’s Place is committed to growing our business in a

way that considers the economic, social and environmental

impacts of what we do

Our Approach to Corporate Social Responsibility


• Focused long-term partnerships

• Local to SJP offices

• Supporting people in need

• Promote staff skills based engagement

Strategic approach


• Employability and Financial Awareness

• Local charity partnership

• Individual & team community support

• Input, output & impact measurement and benchmarking

Four core deliverables


• Y9 & 6th form, non-branded, non-sales, free to schools and

SJP staff led

• 15 sessions delivered YTD: in 11 different schools and 2

charities, 1196 students with 85 SJP staff delivering

• Year total expected to be over 3000 students with 190 staff,

running 28 sessions in 20 different schools

Financial Education

CSR measures

Key public CSR measures we

report into are:

• FTSE4Good

• Business in the Community

• London Benchmarking Group

• Carbon Disclosure Project

• Energy Savings Opportunity Scheme

• Carbon Reduction Commitment

We also subscribe or adhere to

these CSR standards:

• The Living Wage Foundation

• The Prompt Payment Code

St. James’s Place Foundation

• Formed in 1992 it is a grant making charity ‘with a difference’ with all

funds raised and donated by the SJP community (including £ for £

matching)

• All expenses related to the Foundation are covered by the Company

• The majority of our support is focused on children and young people (split

between disability/illness & social and economic disadvantage)

• Our next largest theme is focused on Hospices and we donate

approximately 10% of our funds through Hospice UK each year (the

umbrella organisation for all independent hospices)


• Over £51 million raised and donated since 1992. A total of £5

million raised year to date (July) against a full year target of

£7.5 million

• Currently 89% of Partners & employees give generously each

month to a total of £1.3 million per year


• Is the Foundation’s ‘Sport for Good’ Project (launched in 2012 and

is ongoing)

• Over £2.4 million donated to 7 charities, operating across the UK,

over the last five years

• Charities helping young people under the age of 25 and split

between those focused on ‘disability/illness’ & ‘Social & Economic

Disadvantage’

• All 7 Charities utilise participation in sport to empower and inspire

young lives and so they can reach their full potential

An example of Giving Effectively…


• Just some of our Major Grants…


An engaged community

Summary

• An engaged community

• Significant investments being made for the future

• Corporate Social Responsibility as part of business as usual

• The Foundation - part of who we are and what we do

• Doing these (and other) things helps to maintain and develop

our culture

• Maintaining our culture is, of course, a key part of delivering

our business objectives

IAN GASCOIGNEManaging Director

Strategic context – the growth model

NEW BUSINESS

CAPACITYNumber of Advisers

PRODUCTIVITYNew Business per Adviser

71

Number of Partners x Average Productivity

= New Business

PARTNER

PA

Number of Multi-Member Practices

183

480

2006 2016

Sole Trader Business

PA ParaplannerPA

Partner

Sole Trader Productivity

£0m

£1m

£2m

£3m

£4m

£5m

Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+

by length of Service

Gross inflows p.a.

A Multi-Member Practice

Adviser PA PA ParaplannerAdviser

Partner

A Large Multi-Member Practice

Adviser Adviser Adviser Adviser Paraplanner Paraplanner PAAdviser PA

Practice Principal

Practice Manager

Sole Trader Productivity

£0m

£1m

£2m

£3m

£4m

£5m

Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+


Gross inflows p.a.

Partner Productivity

£0m

£1m

£2m

£3m

£4m

£5m

£6m

£7m

Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6-10 Yrs11+


Gross inflows p.a.

4945

41 40

29

0

10

20

30

40

50

Partners Advisers Academy Graduates Academy Students Next GenerationAcademy

Average Age by Partner Type

Productivity

£0m

£1m

£2m

£3m

£4m

£5m

£6m

Original Academy Academy 2014 Academy 2015 Advisers 2013

Sole Traders Graduates Advisers

Gross inflows p.a.

By recruitment vintage

Productivity

+26% +3% +1%+11% +6%

+9%+9%

£0m

£1m

£2m

£3m

£4m

£5m

2010 2011 2012 2013 2014 2015 2016 June

Gross Inflows per Partner Practice

Gross inflows p.a.

+26% +3% +0%+9% +4%

+6% +5%

£0m

£1m

£2m

£3m

£4m

2010 2011 2012 2013 2014 2015 2016 June

Average Gross Inflows

Productivity

Gross inflows p.a.

Strategic context – The growth model

CAPACITYNUMBER OF PARTNERS

PRODUCTIVITYNEW BUSINESS PER PARTNER

NEW BUSINESS

Experienced recruitment

Asia

Academy

Next Generation

Discretionary Fund Management

Personal development

Broadening investment portfolio

SJP Money Management

Discretionary Fund Management

Technical Connection

Intergenerational Mortgage range

Summary

• Continuing strong performance

• Combining value added advice with excellent investment returns

• Committing to CSR and maintaining our culture

• Creating a platform for sustainable growth

Documents

CAPITAL MARKETS BRIEFING/media/Files/... · 2016. 11. 23. · 31 December 2008 £’billion Year Ended 31 December 2007 £’billion Opening funds under management 18.2 15.4 New money