Half Year 2026 St James's Place PLC Earnings Call - Q&A

July 29, 2026

Speaker #1: Good morning, and welcome to our 2026 half-year results presentation. I'm pleased to report a strong set of results for St. James's Place, reflecting both good financial performance and continued operational and strategic progress.

Speaker #1: I'll start by summarizing new business performance in the period, and I'll then hand over to Caroline to take you through the financials in more detail before I come back to discuss our strategic progress.

Speaker #1: In the first half of the year, we continued to see high demand for financial advice, as our clients navigated a complex and evolving environment.

Speaker #1: This is reflected in our new business performance, net inflows for the period were 2.7 billion pounds, supported by gross inflows of 10.5 billion pounds.

Speaker #1: We also saw an improvement in fund retention to 95.4%. This was above our long-term ambition of 95% and reflects a quality and longevity of relationships we and our advisors build with clients.

Speaker #1: Fund increased to over 240 billion pounds during the first half, driven by both positive net inflows and strong investment performance. Investment returns represented 16.4% of opening fund on an annualized basis, net of all charges.

Speaker #1: This return reflects a value we delivered to clients through our distinctive investment management approach and our proprietary range of funds and portfolios. All of this helps clients to achieve their long-term financial goals.

Speaker #1: The strong growth in fund, combined with our new business outturn, has translated into good financial results for the first half. We've delivered an adjusted IFRS before tax result of 278.4 million pounds, and Caroline will walk through the detail behind this shortly.

Speaker #1: Both our client and advisor communities grew during the period, with a net 27,000 new clients up nearly 3% and an increase in advisor numbers to 4,951 at the end of June.

Speaker #1: It's end support available. Across the partnership. Looking ahead, we remain confident in the long-term outlook for financial advice in the UK, the advice market remains under-penetrated, client needs are becoming ever more complex, and the value of trusted advice continues to grow.

Speaker #1: Overall, the results showed that our business is in good shape. These results also reflect the benefits of the investments we've made across the business.

Speaker #1: I was just wondering if you're able to provide an update here, and whether they've actually provided notice to leave. And then, how do you also intend to retain advisors and some in the event of a practice or partnership leaving?

Speaker #1: In a competitive marketplace, we continue to focus on strengthening our client and advisor propositions. With that, I'll hand over to Caroline to take you through the financials in more detail.

Speaker #1: My second question is relating to AI, so I was just wondering how you think about shared economies of scale from your productivity benefits relating to AI.

Speaker #1: As we move through the latter stages of the strengthened phase of our strategy, our focus is increasingly turning toward the opportunities ahead and the transition to Amplify.

Speaker #1: And how do you also intend on reinforcing your large-scale advantages versus peers? And then I just had a follow-up question as well on net flow expectations.

Speaker #2: Thanks, Mark, and good morning, everyone. I'm pleased to present our half-year results in our new, simplified reporting framework, which we announced to the market on the 18th of June.

Speaker #1: We believe St. James'S PLACE remains the most compelling place in the UK to build, grow, and realize value, from a successful financial advice business.

Speaker #2: I will not be providing detailed background on the new framework today, but if you'd like a reminder of this, all the relevant materials are available on the shareholders' section of our website.

Speaker #1: So, I know you were talking about how you've done quite a bit in terms of the Academy and improving productivity. Pricing's obviously not lower now, remediation's pretty much behind.

Speaker #1: This enables our advisors to deliver the trusted advice service and support our clients' value, this leads us well-positioned for the next phase of growth.

Speaker #2: I'm going to start by focusing on our financial performance for the period, taking you through our adjusted IFRS result and the financial impact of our key programs of work.

Speaker #1: With that, let's open up for questions.

Speaker #2: Thank you. We'll now begin the question-and-answer session. If you'd like to ask a question, please press Start, followed by 1 on your telephone keypad.

Speaker #2: I'll then set out our liquidity position and close with shareholder returns for the period. As usual, we are presenting the results for the first half of 2026 compared to the first half of 2025.

Speaker #2: If you change your mind, please press Start, followed by 2. And when preparing to ask your question, please ensure that your device is unmuted locally.

Speaker #2: And our first question comes from Andrew Lowe with CT.

Speaker #2: However, the shape of our financials changed following the implementation of our simple comparable charging structure in late summer last year, and so there are structural differences between the financial results for these periods.

Speaker #3: Hi, and thanks for taking the question. I've got 2. The first is on your advisor retention rate in the first half. Could you clarify what that was in the first half, and how that compares to the 91% retention rate that you saw in 2025?

Speaker #2: Let's start by taking you through the adjusted IFRS P&L. I'm very pleased that our headline metric, adjusted IFRS profit before tax, was 278 million pounds for the period.

Speaker #3: It seems likely to have gone down rather than up, but your advisor numbers are up 0.3% in the first half. And there have been unquantified planned exits from underperforming advisors.

Speaker #2: After tax, this equated to 224 million pounds, which compares to consensus expectations of 194 million pounds. As anticipated and guided, these results are lower than they were in the first half of 2025 due to the expected lower initial and ongoing margins earned under our new charging structure.

Speaker #3: Can we conclude that you're doing more lateral hires from other advice firms, or has the gap been bridged by a step-up in the number of advisors graduating from the SJP Academy, where presumably day-one productivity may be lower?

Speaker #2: Whether this effect extends to the full year 2026 will depend on how markets develop over the second half. But from 2027 onwards, we anticipate sharply accelerating earnings and will remain confident in our ambition to double adjusted profits from 2023 to 2030.

Speaker #3: So any color there would be great. And then the second question is just on your pass-through of your fees to your advisors. There's been a lot of debate on this during the past couple of weeks.

Speaker #2: Much of our income and expense base vary together with fund levels or inflows. And so it is useful to consider these items together. As a result, I'm going to focus my adjusted IFRS commentary on the analysis by business driver table, which you can see on the slide.

Speaker #3: And how you are perceived to be retaining more of the advisor fees versus other platforms who seem to be talking about passing through 80% to 85% of the gross fees to their advisors.

Speaker #2: And as this table clearly shows, our profitability is driven by fund. Profit from fund was 528 million pounds for the first half of 2026, an increase of 4% period on period.

Speaker #3: So if I take the 25 basis points of ongoing advice fee that you keep as a percentage of the 80 basis points that you charge your clients, that suggests that you're retaining 30% in your advisors and keeping 70%.

Speaker #2: This was driven by strong fund growth, partially offset by the expected impact of earning lower ongoing margins under our new charging structure. Profit from fund was within our 2026 guidance range of 47 to 49 basis points of total average fund on an annualized basis.

Speaker #3: But I'm conscious that there may be further pass-through that we don't see in the financial disclosure. So could you just clarify exactly what your advice fee retention is, and whether you think that that figure is like-for-like with what your peers are reporting?

Speaker #2: We continue to expect this margin will be in that range for full year 2026, and this will increase annually through to 2031, as gestation fund begins to contribute to ongoing profitability.

Speaker #2: We will provide one year forward guidance on the profit from fund range. But for modeling purposes, we suggest you assume that the range increases by approximately 3 basis points annually out to 2031.

Speaker #3: Thanks.

Speaker #1: Okay, Andy. Thank you. So we're hitting a topic I expected that we'd spend a little bit of time on today. I think maybe just some broader comments around the whole element of partner retention and the like and then I will get to those explicit components.

Speaker #2: You can find a summary of all our guidance in the appendix to the slide deck, which is unchanged from when we announced our simplified reporting framework.

Speaker #1: Firstly, I think I would say the reality forms to every wealth manager around the world is the ebb and flow of advisors. We've seen it for decades in St.

Speaker #2: This annual increase in profit from fund margin, combined with net inflows and investment return increasing fund in supportive markets, builds a powerful picture of how our profitability can develop and compound over the medium term.

Speaker #1: James'S PLACE, and it's not particularly new. So our partner retention number is running at 90% at the moment. Last year it was 91%. So it's a marginal so it's a 1% delta.

Speaker #2: As expected, at 18 million pounds, profit from inflows is relatively immaterial under our new charging structure, following the removal of initial product charges and we expect this to remain small going forward.

Speaker #1: Which, per the math, I think ends up at about 50 advisors in terms of the difference. So it's very much at the margin. In terms of what we're doing.

Speaker #2: I'll now expand expenses unrelated to fund or inflows into its constituent parts. The most significant expense in this category is our people, property, and technology, or PPT costs, which equated to 261 million pounds in the first half.

Speaker #1: We unfortunately lose advisors to a broad range of firms, and many retire or leave the profession. However, we also recruit advisors from a very broad range of firms, including IFAs.

Speaker #2: We continue to expect that full year PPT costs will increase by 5% year on year. Cost growth will be weighted towards the second half of the year due to an increase in our anticipated reinvestment spend in that period, enabled by the cost savings from our cost and efficiency program.

Speaker #1: And we have a phenomenal recruitment team. So the advisor retention levels that we've seen over the course of the first half is and the additions are a combination of lateral hires, experienced lateral hires, we've done that from day 1, and as I said, we have a very, very good team.

Speaker #2: Charge structure implementation costs were nil in the period, compared to 51 million pounds in the first half of 2025. This is, as expected, given our new charging structure was implemented in late summer last year.

Speaker #1: And if anything, we're actually we've recently strengthened the team earlier this year. We strengthened the team, we brought some additional folk on. Because we indicated back in February our ambition to be able to see the advisor numbers grow from 2027, and therefore there's normally a bit of a time lag in the pipeline in terms of building up on that.

Speaker #2: The final key line in the adjusted IFRS result is investment return and net finance income, which was 71 million pounds for the period. This has increased period on period, primarily driven by both shareholder investments in money markets funds and business loans to partners being higher in average in the first half of 2026 compared to the first half of 2025, partially offset by a decrease in interest rates.

Speaker #1: So we've started investing in that piece. And the other component is the academy. And the academy over the first half of this year has been very, very busy.

Speaker #1: We've seen good numbers coming through in terms of graduation, and we've seen great demand for advice and a real positive reaction to our campaign of trying to encourage more women into the advice profession.

Speaker #2: These factors combined to give adjusted IFRS profit before tax for the period of 278 million pounds. Whilst this is a reduction of 9% compared to the first half of 2025, driven by the impact of our new charging structure, as previously mentioned, we anticipate sharply accelerating earnings growth from 2027 onwards.

Speaker #1: So we've been active in that regard, and we've seen real tick-up in interest in that for the longer term. But over the course of the last 6 months, the academy has actually contributed significantly in terms of our advisor numbers.

Speaker #1: In terms of the broader pass-through component, again, just a little bit of color and context. We set out as part of our strategy in 2024 that one of our key pillars is having the leading advisor offering.

Speaker #2: The effective tax rate for the first half of the year was 19% in the adjusted IFRS result. This is lower than we would expect over the long term, due to temporary market-related accounting effects, which means there will be some variability in reported tax rates from period to period.

Speaker #1: And we want to make sure the St. James'S PLACE is the best place for the best advisors to join developing and build a successful career in business.

Speaker #2: However, the current standard UK corporation tax rate of 25% remains the most appropriate assumption for you to use in your modeling. This led to adjusted IFRS profit after tax of 224 million pounds.

Speaker #1: And we are laser-focused on this. Also that the vast majority of our investment of over $260 million over the next few years is focused on improving our offering for advisors and hence for clients.

Speaker #2: I'll now move on to cover the financial impact of our two key programs of work. Firstly, the historic ongoing service evidence review. We are now in the final stages of this work, and we remain confident in completing the program by the end of 2026.

Speaker #1: Now, no one else in the market is investing in anywhere near this scale. And we think that's also why we have nearly 20% of the UK advisors within St.

Speaker #1: James'S PLACE, and nearly half of all new advisors to the profession. Come through our academy. Now, remuneration is or advisor pay is one of the components of effectively the offering that we have to advisors.

Speaker #2: Due to experience gathered during the period, we've been able to release a further 110 million pounds before tax from our ongoing service evidence provision.

Speaker #2: This release is recognized outside of the adjusted IFRS P&L due to its non-recurring nature. The remaining provision stands at 110 million pounds at the half year.

Speaker #1: There are so many other components to it. But to answer your question, directly, the partner element that advisors retain of the advice fees we pay is about 80%.

Speaker #2: Consistent with previous releases from this provision, the board has decided to return the post-tax amount of 83 million pounds to shareholders in full through a share buyback program.

Speaker #1: And I think a figure that's somewhat higher than many folk assume. So it's our focus as an organization, as an executive team, is on ensuring we have the leading advisor offering.

Speaker #2: I'll set out further details when I cover shareholder returns shortly. Secondly, our cost and efficiency program. As a reminder, our aim is to take 100 million pounds of cost a year out of our addressable cost base.

Speaker #1: Ensuring we continue to retain attract, grow our advisor base. Because we see the total addressable market as growing in the UK, there is a huge opportunity our growth algorithm, we think, factors on two key components, one of which is productivity increases, and we're going to continue to stay focused on that, supporting our advisors in that regard.

Speaker #2: The objectives of the program was never simply to reduce cost. It was to create a stronger, more scalable business with greater capacity to invest to drive future growth.

Speaker #2: We expect to reinvest approximately half of the cost savings over the period to 2030, resulting in a significant reinvestment envelope of around 260 million pounds.

Speaker #2: That level of reinvestment is an important enabler for the next phase of our strategy. We remain on track to deliver the program by 2027.

Speaker #1: And the second is advisor numbers. So we're focused on both, and we expect to be able to deliver both over the medium term. So hopefully that answers your question.

Speaker #2: As previously guided, this program has had no material impact on these half-year results. This is because the cost savings have been broadly matched by cost to achieve and reinvestment spend.

Speaker #1: Maybe a little bit more fulsome, but hopefully it just gives everyone a bit of sense of the broader color and how we're focusing on these matters.

Speaker #2: During reinvestment spend on enhancing the propositions we provide for both advisors and clients. One area that's particularly close to my heart is the continued evolution of our business sale and purchase, or BSP scheme.

Speaker #3: That's great. Thanks so much.

Speaker #4: Thank you. And the next question comes from Nasib Ahmed with UBS.

Speaker #3: Thanks. Morning. Thanks for taking my questions. Maybe I just want to follow up on the two points that you just made, Mark. Can you give us a number?

Speaker #2: This is a critical part of what we offer our advisors. It supports them throughout their entire journey, from recruitment to retirement, helping them build successful businesses grow their value over time, and ultimately realize that value when they choose to retire or step back.

Speaker #3: So you've basically hired 500 advisors. What's the split between academy hires and lateral hires? Is it 50/50, 300/200? And then on the 80% retained by advisors, I mean, it's hard to get the maths.

Speaker #2: We see BSP as a key enabler of both business growth and capital realization, which is why we continue to invest in its development. By strengthening this proposition, we are giving advisors greater confidence in their future and helping ensure they can fully benefit from the businesses they have worked so hard to build.

Speaker #3: I mean, you've given us the number, but can you another way of asking the question would be the 25 basis points that you retain, how much of that is actually consumed in helping advisors on business rates indemnity insurance, et cetera, right?

Speaker #3: So just trying to see the 25 basis points revenue margin, how much of that are you retaining net of costs for advice? And then on slide 24, you show that kind of the EY chart, which is helpful.

Speaker #2: Mark will talk more about other enhancements to our advisor and client propositions later. We continue to expect that the program will have no material impact on the full year 2026 results for the same reasons it had no material impact in the half, after which time benefits to the adjusted IFRS result will start to emerge in line with our previous guidance.

Speaker #3: Quilter have a similar chart, and they've got 1.56% on a 10-year basis with a 500K pot instead of the 100K pot. So they don't seem to be on the chart.

Speaker #2: Let me now turn to our liquidity position. At the 30th of June, we had 276 million pounds of free liquidity held at Group Centre.

Speaker #3: So I don't know what I'm missing there. I don't know if you can comment on that. Thanks.

Speaker #2: You can see how this is derived from total shareholder liquid assets on the slide. We are comfortable holding this level of free liquidity as it provides a layer of both prudence and flexibility in how we run the business.

Speaker #1: So I'll ask Caroline to give a little bit more color on the element of the 80% and how that is how that's compiled. On the chart, I think we've got 16 competitors.

Speaker #2: We will regularly review this to ensure we continue to optimize our capital allocation priorities in line with our capital allocation framework, which is unchanged and included in the appendix.

Speaker #1: I don't think we named them, et cetera, or set out who they are. I would expect them to be to have all the usual suspects in them.

Speaker #2: Cash flows into and out of free liquidity over the period are set out on this slide, which demonstrates that our business is highly cash generative.

Speaker #1: On that way, so I can't comment on what others have done and how they have compiled their numbers. Nasib, on the element of the breakdown of the advisor numbers, we're not looking to kind of give granularity on the academy or the recruitment element in terms of our specific numbers.

Speaker #2: Finally, shareholder returns. As we communicated in February, the board intends to increase our payout ratio for ordinary shareholder returns from 50 to 70% for 2026 and beyond.

Speaker #2: This ratio applies to adjusted IFRS profit after tax under our new reporting framework. But as this metric is equivalent to the underlying cash result, there is no change in the amount that will be paid out.

Speaker #1: Other than to say, I think both play an active role and the ratios shift and change broadly over the course of the years. Within a fairly tight corridor.

Speaker #2: In February, we also set out our intention for the half-year 2026 shareholder returns, which was that these would be set at a third of the prior full-year balance for ordinary shareholder returns, excluding buybacks relating to releases from our ongoing service evidence provision.

Speaker #1: So we haven't seen anything majorly change in that regard. But we are looking well, and we are looking to spend more in the academy in terms of increasing the number of cohorts that we have going in.

Speaker #1: So over the fullness of time, we would expect to have more people coming in through the academy. In addition, we'd also expect to have more lateral hires.

Speaker #2: In line with this guidance, the board has declared an interim ordinary dividend of 6 pence per share, together with an interim ordinary share buyback of 45 million pounds.

Speaker #1: We think that the new fee structure that we set out in and we've pivoted to in from August last year actually means that there are some advisors who previously weren't necessarily fans of the old regime in the marketplace who would now be receptive to a conversation with St.

Speaker #2: Combined with the additional buyback due to the release from the ongoing service evidence provision for the period, this means our total buyback program will be 128 million pounds.

Speaker #2: We will commence this buyback in August. To conclude, we've delivered good financial results for the first half of 2026, driven by strong growth in fund and disciplined expense management, offset as anticipated by the impact of our new charging structure.

Speaker #1: James'S PLACE. And then finally, I'm also very conscious of the fact that there's been a lot of consolidation, a lot of movement around the market.

Speaker #1: And not every advisor that's been subject to some of those acquisitions are thrilled by those. So there's an opportunity for us to be able to lift out a few advisors from some of those organizations.

Speaker #2: We continue to have a strong balance sheet and we are committing to shareholder returns of 159 million pounds due to the combination of share buybacks and the interim dividend.

Speaker #1: So we're spending considerable time and energy around that. So I think it's fair to say that as a team, we are very focused on retention.

Speaker #2: The annual increase in profit from fund margin, combined with growing fund and all new business now contributing to ongoing profitability from day one, means we anticipate sharply accelerating earnings growth from 2027 onwards.

Speaker #1: We are very focused on acquisition, and we're very focused on creating a long-term pipeline for the profession through the academy. Caroline, do you want to give a little bit of extra color on the 80%?

Speaker #2: Underpinning our confidence in our ambition to double adjusted profits from 2023 to 2030. With that, I'll hand back to Mark.

Speaker #2: Yeah. Yeah. So to look at the 80%, you have to consider, obviously, together all the initial and ongoing advice fees that we pay to partners.

Speaker #1: Thanks, Caroline. Now I'm going to cover two topics. First, our strategic progress, including how we see technology as an enabler to our business. Second, why we're excited about the market opportunity ahead, and how we're leveraging our scale to extend our competitive advantage.

Speaker #2: Plus the allowances we give them. So we pay out two-thirds of initial advice charges to the advisors. This, obviously, increases substantially all the initial advice charges.

Speaker #2: When you add the other allowances we pay to the partnership. So that's consistent with what we said under our new charging structure. The sort of new business makes minimal profit.

Speaker #1: So, beginning with strategy, as you have heard, we've progressed things well in the first half, both financially and operationally. What I'm going to do now is step back and talk about where we are in our strategic journey and why we remain confident in the path ahead.

Speaker #2: When you add in the amount we pay on an ongoing basis, there's two elements to this. There's obviously the 55 out of 80 basis points under the new charging structure.

Speaker #2: But then you've also got under the old charging structure, advisors got all the ongoing advice fees. So it's a combination rather than specifically picking out any of the specific costs.

Speaker #2: So you have to take all that together and do.

Speaker #1: You'll recall that we designated this initial period as our strengthened phase. We are focused on addressing legacy matters, simplify the business, and improving the way we operate.

Speaker #3: And I'm unsure of gestation. Can you just confirm that you're that 80 becomes 75 or greater than 75?

Speaker #2: It will be sorry. Say that again, Nasib.

Speaker #1: St. James's Place is a simpler, more efficient business today. This puts us in a stronger position as we've prepared for the Amplify phase of our strategy, which is much more focused on growth.

Speaker #3: So you're paying out 100% on all of the firm. That's in gestation. But once that runs off and let's say 2032, that 80% becomes 75.

Speaker #1: Let me recap on the progress we've made during the strengthened phase. First, our move to simple, comparable charging. This was a key step in improving transparency for clients and in making it easier to articulate the value of our proposition.

Speaker #2: It reduces not 75, but it reduces a little bit, yes.

Speaker #3: Thank you.

Speaker #4: Thank you. And the next question comes from Andrew Crane with Autonomous.

Speaker #1: The transition has been successful. Advisors continue to attract new clients and generate significant levels of new business. The new structure has supported innovation across our product range, including the launch of Polaris Multi-Index.

Speaker #5: Good morning, all. Three questions, if I can. Caroline, on slide 8, you make the point that results were lower in the first half of '25 because of the lower initial and ongoing margins.

Speaker #5: But then you say whether this effect extends to fully year 2026 will depend on how markets develop in the second half. I just want to explore the implication of that.

Speaker #1: The changes we've made have strengthened our proposition for both advisors and clients. Our ambition has never to be the lowest cost provider. It is to deliver great outcomes through high-quality advice.

Speaker #5: If markets are normal, is the implication of what you're saying that the second half profits will be higher than the second half '25? That's the first question.

Speaker #1: Supported by strong investment solutions technology and service. And the chart on this slide shows we deliver that at a very competitive price for clients.

Speaker #5: Second and third questions, just can you update us a bit more on the high net worth initiative and also on the flagstone cash transmission?

Speaker #1: The charging structure changes we've made strengthen our ability to demonstrate that value proposition with confidence. Second, our cost and efficiency program. This is helping to create a simpler, more productive, and more scalable organization.

Speaker #5: If I'm transferring cash now from flagstone into St. James'S PLACE, how long will it take me?

Speaker #1: Perfect. All right. Well, why don't I start with the high net worth piece and the flagstone, Andrew, and then Caroline can pick up on the second piece.

Speaker #1: Importantly, the benefits extend beyond efficiency alone. By simplifying how we operate, we're creating additional capacity to invest in both our advisor and client propositions, to drive future growth.

Speaker #1: So high net worth will continue to be part of our strategy. Over the course of the last six months, we've got a dedicated high net worth program and leadership team that have begun significant increase in high-quality private client events, to be able to deepen engagement with expanding our central advisor support to enhance the servicing of high net worth.

Speaker #1: Third, the historic ongoing service evidence review. This has been a significant undertaking across the business. As Caroline outlined earlier, I'm pleased we're entering the final stages of this work.

Speaker #1: As these programs reach completion, management attention and investment will increasingly shift towards growth. Taken together, these initiatives have left us better positioned to scale invest and maintain leadership in our marketplace.

Speaker #1: We've launched a pilot high net worth training program with one of the largest practices. Paving the way for a broader rollout next year. Increasing the volumes of high-quality practices serving the complex high net worth client needs.

Speaker #1: Alongside these programs, we've continued to make strong progress on several strategic priorities. First, we have broadened our client proposition. We've launched Polaris Multi-Index and continue to evolve our cash proposition through our relationship with Flagstone.

Speaker #1: So the high net worth component continues to be a very important aspect. And I think our investment in this area and the energy and commitment of resources we think will deliver more consistent and somewhat differentiated high net worth experience.

Speaker #1: This includes expanding access to cash ISAs, reducing minimum deposit amounts, and securing improved pricing for clients. These enhancements enable advisors to support a broader range of client needs.

Speaker #1: In terms of flagstone, so in the second half of this year, we are expecting to dramatically change and we're working closely with flagstone on dramatically changing the length of time it takes to move money from flagstone into St.

Speaker #1: We're also continuing to explore opportunities to further develop our proposition for clients with more complex and substantial wealth planning needs. As the UK wealth market evolves, we see an opportunity to enhance the support available to higher net worth clients as part of the Amplify phase of our strategy.

Speaker #1: James'S PLACE. So I would expect we'll be able to report that that is all done and dusted when we chat to you again. It's a key component of the engagement with flagstone.

Speaker #1: In the meanwhile with flagstone, what they've done is they've massively facilitated take-home procedures so most of the information is now as auto-populated from across from St.

Speaker #1: Second, we are strengthening the St. James's Place brand. Our net promoter score and brand awareness have both increased, by 14 percentage points since the end of 2023.

Speaker #1: James'S PLACE. And the rates they're clients are getting has been has improved the level at which clients invest has been lowered a bit to make it more accessible.

Speaker #1: In a business built on trust, relationships, and referrals, these are such important indicators of long-term strength. They support client retention, advisor growth, and the ability to attract new clients at scale.

Speaker #1: And we're seeing an increase. I think it's to 5.9 billion looking at the team. Yep, for 5.9 billion now in flagstone. So a meaningful increase clearly just talking about clients and the markets generally in the UK markets, confidence in global economy and in the uncertainty.

Speaker #1: Third, we have enhanced our advisor proposition. We are strengthening the sense of community within the partnership, renewing our focus on bringing advisors together to increase connectivity, learning, and the sharing of experiences.

Speaker #1: And wishing to have some in cash. And this is an incredibly effective and efficient way of being able to get your cash to work a little bit.

Speaker #1: We have evolved our market-leading BSP proposition, which is our succession support scheme. We've improved pricing transparency, simplified transaction processes, and expanded support for first-time buyers.

Speaker #1: But ultimately, as we all know on this call, the UK has a broader issue. And that people are oversaved and underinvested. So at least through flagstone, our advisors have great visibility of what's in flagstone.

Speaker #1: This has helped to create a more efficient and accessible BSP marketplace, supporting advisors to build and grow with the confidence that they can realize the value of their advice businesses.

Speaker #1: And as part of their general engagement with clients, our exploring the size and scale of what's in flagstone and what possibly could be, should be invested.

Speaker #1: These developments contribute to a strong first half on the BSP front, nearly 200 advisors made purchases through the scheme during the period, and BSP transaction volumes were significantly ahead of the prior year.

Speaker #1: Because the opportunity cost of being in cash versus being in the market is quite significant, as I'm sure you're aware. Caroline.

Speaker #2: Yeah. Yeah. And thank you, Andrew. Yes. Look, I think I'm actually not sure what a normal market is anymore, actually. So but taking that aside, if we think it's something normal, second half of the year, yes, we would expect probably the half 2, 26 profits will be higher than half 2, 25 profits.

Speaker #1: We also supported the largest BSP transaction in our history. This demonstrates the strength and maturity of the marketplace we've created and our ability and appetite to support transactions at real scale.

Speaker #2: But as I said, it all depends upon markets.

Speaker #1: Alongside this progress, we've continued to modernize one of the most important enablers of our long-term strategy, namely technology. I'm going to spend a few minutes talking about technology, including the role of AI at St.

Speaker #3: Thank you.

Speaker #4: Thank you. And our next question comes from David McCann with Deutsche

Speaker #1: James's Place, and how this has already delivering benefits across our business today. Technology is increasingly a competitive advantage within our industry. At St. James's Place, it improves advisor productivity enhances client experiences, and helps us scale more effectively.

Speaker #1: Good technology is not a choice. It is a strategic priority. Over the last six months, we've completed a review of our technology strategy through to 2030.

Speaker #1: This ensures we're well positioned to build on our technology foundations in the years ahead. At its heart, the strategy is centered on executing on three priorities.

Morning team. Uh, thanks for taking my questions. Um, 2 for me. Please the first 1 to follow up on the advisor, retention piece. Uh, obviously a few questions you've had already about the, the split of shareholder and advisor economics, but I just wanted to drill into that a bit more. Uh, obviously you questions are really focused on, you know, what is the current split? Yeah, the question really is. Do you see this changing going forward? Given the comments you made about the competitiveness of the market and there's obviously what we're all seeing. And I, yeah, adjacent to that point. Um, are you still expecting roughly flat overall advisor? Numbers over the whole year?

Speaker #1: First, making St. James's Place easier to do business with. We are simplifying advisor tools, improving connectivity between systems, and enhancing digital experiences for clients.

And then the second question is on flows more generally, and I think it's fair to say that they remain at the softer end, and I think where most people would absolutely like to see them.

Speaker #3: medium-term aspirations of where you'd like them to be for the business of your size? Thank you.

Speaker #1: The objective is straightforward. Less friction, greater productivity, and better experiences. Second, creating a more efficient and scalable business. We're simplifying processes to reduce duplication, improve control, and free up resources to invest for growth.

Speaker #1: David, thank you. In terms of advisor retention, and advisor numbers just generally, I think, as I said earlier on, the element of advisors and our leading advice offering is fundamental to who we are as an organisation.

So, maybe you can drill into why that is the case. What do you think it will take for them to positively inflect? And, indeed, do you have any medium-term aspirations of where you'd like them to be for the business on your side? Thank you.

Speaker #1: Third, strengthening our data foundations. As the UK's largest financial advice business, we have deep client relationships and a huge amount of data that helps us gain insight into client behaviors and needs that supports our advisors.

Speaker #1: So we are laser-focused on ensuring that we have the very best offering to advisors in the round. So, when we talk to partners and advisors about why they join us, why they stay with us, they tell us the academy is so valuable to them—the element of really joining a community. They don't feel alone, isolated; they're part of something much bigger.

Speaker #1: Bringing this together more effectively, we'll improve decision-making for us and our advisors. It will help us deliver increasingly personalized experiences for clients, and it will create an environment that will allow us to make much greater use of AI over time.

Speaker #1: The ongoing technical support, training, advice, etc. We also have the highest concentration of chartered financial professionals. About a potential exit from one of your flagship practices, Sovereign Wealth.

Speaker #1: As technology, data, and AI reshape our industry, scale is becoming an increasingly important competitive advantage. Our scale enables us to continue investing in our proposition, technology, and capabilities for the benefits of advisors and clients alike.

Speaker #1: One of the most exciting opportunities a stronger technology and data foundations create is the ability to make much greater use of AI. We think we're well positioned in an increasingly AI-enabled world.

Speaker #1: At its core, financial advice is built on trust. Judgment and long-term relationships. Those things don't go away as technology evolves. If anything, they become even more important.

Speaker #1: So how do we think about using AI today? Our approach is guided by three principles. First, human-centric AI. We're using AI to reduce administrative efforts and improve quality.

Speaker #1: This allows advisors to spend more time with clients, delivering high-quality advice and building more successful businesses. Second, ecosystem-led innovation. We work with leading technology partners, combining their expertise with innovation from across St.

Speaker #1: James's Place and the partnership. Our scale and profile as a market leader means that the largest technology companies in the world want to work with us.

Speaker #1: Third, treating data as a strategic asset. Reliable data is essential for effective AI. And for helping advisors to deliver increasingly personalized client experiences, at scale.

Speaker #1: In our view, the businesses that can combine trusted relationships, good data, and the ability to keep investing are likely to be the ones that benefit most from AI.

Speaker #1: As the UK's largest advice business, we believe St. James's Place is particularly well positioned for this environment. So far from being a threat to our model, we see AI as an enabler of it.

Speaker #1: Today, we already have more than 20 AI-enabled tools delivering benefits across St. James's Place. Advice assistant is saving around 90 minutes per case while improving quality and accuracy.

Speaker #1: Chat SJP already supports around two and a half thousand monthly users within our partner practices. Helping them find policy and advice information quickly and efficiently.

Speaker #1: This is tracking at about 15 minutes save per query, and it allows users to access information and support 24/7 rather than being restricted to core business hours.

Speaker #1: Sophie, a meeting intelligence tool, is now being rolled out across the partnership following a pilot program. By automating key elements of meeting administration, Sophie saves valuable time for advisors and their teams, enabling more time to be spent with clients and prospects.

Speaker #1: And firms participating in the pilot achieved higher new client growth relative to control groups, with the benefit more pronounced among our smaller partner practices.

Speaker #1: This provides a strong early indication that the tool can enhance advisor productivity and contribute to stronger practice growth and profitability across the partnership. The tools already in use across St.

Speaker #1: James's Place are improving productivity and supporting better experiences for advisors and clients. We'll build further on these AI capabilities over time. So where does this leave us?

Speaker #1: We are focused on how we use a stronger business we're built to better support clients and advisors and drive growth. This includes embedding recently announced changes to partner pay and benefits.

Speaker #1: These enhance a number of things. They simplify advisor pay, better align reward with the delivery of high-quality, holistic advice, and strengthen our already compelling advisor proposition.

Speaker #1: Importantly, these changes are fully funded through efficiencies and scale benefits already been achieved elsewhere in the business. As we look ahead, we'll also continue laying the foundations for the next phase of our strategy, namely the Amplify phase.

Speaker #1: I'll share more details on this at our full year results. The second main topic I wanted to cover is why we're excited about the market opportunity ahead and how we're leveraging our scale to extend our competitive advantage.

Speaker #1: As we think about the future, what gives us real confidence is not only the progress we've made, but also the size of the opportunity ahead.

Speaker #1: Today, approximately $1 trillion of UK assets are advised, and only around 9% of UK adults receive regulated financial advice. This is very low. Especially when compared to reported 27% in the United States.

Speaker #1: So, in terms of accelerating this 2% to 3% net flows, given that it seems like a lot of the building blocks are in place, how long until you expect to see this start to improve?

Speaker #1: And yeah, what are your expectations, maybe over the more medium term? Thank you.

Speaker #1: Over time, even if the UK moves moderately closer to those levels, that represents a very significant expansion in the addressable market. This reinforces our conviction that there is substantial untapped demand for high-quality, trusted financial advice over the long term.

Speaker #2: Okay. A nice cross-section of questions, Christianna. So firstly, unsurprisingly, we're not really going to comment on an individual partner business within St. James's Place, if you don't mind.

Speaker #1: Both the regulator and the UK government see this as an issue to be addressed. We believe the firms that combine trusted advice with the capacity to invest will be the biggest beneficiaries, as our industry evolves over time.

Speaker #2: I'm sure you'll understand the reasons for that. Along those lines, I think just a couple of things—just to remind, or maybe inform, people about.

Speaker #2: Firstly, when an advisor leaves, as we say, it is normal that we will lose some. We would much rather not lose advisors, but we understand everybody's got their own personal reasons for that.

Speaker #1: Competition for advisors is increasing. Offering advisors greater choice when considering where to set up and run their advice businesses. At the same time, the advice industry is evolving.

Speaker #2: It doesn't mean that the clients leave. And the clients often find that actually what they have with St. James's Place is incredibly attractive for all the reasons that I've set out earlier, in terms of investment performance, in terms of service, in terms of support, in terms of the brand, the advice guarantee, all these different components.

Speaker #1: Advisors need more technology, more regulatory support, more investment capability, and greater operational scale behind them than ever before. They need this to meet increasing client expectations for personal advice, great service, modern technology, and high-quality investment solutions.

Speaker #2: They really matter to clients, and so we generally find that we retain, on average, about 50% of client funds. Now, another key component is that when a partner who has multiple advisors in a practice leaves—and we do have those as well; and as I said, we don't generally try to encourage that, but we would much rather them stay.

Speaker #1: Delivering all of that consistently requires sustained investment. Because our success depends on attracting developing and retaining talented advisors over the long term, we've spent the last two years strengthening every aspect of the St.

Speaker #1: James's Place proposition. We believe scale is becoming increasingly important competitive advantage in our industry. As the UK's leading advice business, we are particularly well positioned.

Speaker #2: But if they do go, we tend to retain at least 50% of their advisers. That's just what the stats show. So, the element of, you know, there is some dislocation, there is, you know, kind of time and attention that needs to be spent. Would much rather not have it.

Speaker #1: Let me explain what that means for us. St. James's Place combines the trust and visibility of a national brand with the personal client relationships that sit at the heart of successful financial planning.

Speaker #2: But it's not an immediate flow that if somebody leaves, all their fund and all their business leaves with it. And that, I think, just talks to the testimony of the strength of relationship we have with multiple partners and advisors, and with clients as well, and what it is that clients value.

Speaker #1: Advisors increasingly need more than a platform. They need a partner that can help them attract clients, develop professionally, operate efficiently, and build long-term value.

Speaker #2: On the question of AI and technology—and thank you for the question—shared scale of economics and economies of scale and the like, scale benefits for us are really coming through in a few ways.

Speaker #1: At St. James's Place, advisors have access to market-leading support, training, and professional development throughout their careers. The partnership operates as a collaborative community where advisors learn from each other, share best practice, and benefit from their collective expertise.

Speaker #2: One is in terms of our ability, with fund managers, to be able to extract greater margins, and unfortunately, you and others on the call will be just generally seeing that across the sector.

Speaker #1: They are supported by modernizing technology, operational infrastructure, and a differentiated investment proposition, including our market-leading Polaris Solutions. This allows them to focus more of their time on clients, building more successful businesses, and deliver better long-term client outcomes.

Speaker #2: Two is an element of, because of our size and scale, most of the big global IT brands work with us, talk to us, and because of our scale, we can negotiate very good prices for either ourselves or for and for the partners and advisors, making sure that they pay well below rack rate for any of the kit that they use or that they need, whether it be conventional technology or whether it be some of the newer AI capabilities and technologies.

Speaker #1: And they operate within a model designed to help them build, grow, and ultimately realize the value of their quality advice businesses. This is all supported by powerful improvement initiatives such as our market-leading BSP proposition, which I spoke about earlier, and the St.

Speaker #2: And effectively, the scale benefits—we look to put back into the business. So the scale benefits, and just general kind of efficiencies, are part and parcel of how we've been able to pay for and fund the elements of the changes we've made to the fees that we're paying to the advisors from later this year and for next year.

Speaker #1: James's Place Academy. The Academy continues to thrive, and is key to succession planning, regenerating the partnership, and building diversity. We take great pride in the fact that we train and develop around half of all the new advisors in our profession.

Speaker #1: This underlines both the scale of our investment in professional development and our long-term commitment to the future of financial advice. It's another point of differentiation for St.

Speaker #2: Also, going forward, I think this will influence how we look to reinvest back into the business in terms of technology, because the pace of technology is constantly evolving.

Speaker #1: James's Place, and one of the key reasons why our advisor proposition is the most compelling. In UK financial advice. These same strengths create a powerful and differentiated proposition for clients.

Speaker #2: It truly is exponential, not linear. And therefore, I think how we continue to evolve our technology stack, and how we continue to ensure that advisors get the most streamlined process possible, is going to be really, really important.

Speaker #1: At St. James's Place, clients benefit from what we describe as the best of both worlds. They receive the personal relationship, trusted guidance, and long-term support of a local advisor.

Speaker #2: Because ultimately, what advisors love doing is being in front of their clients. The admin piece just generally is because, for any advisor around the world, that's not why they do what they do.

Speaker #1: Someone who knows them, understands their circumstances, and helps them navigate life's most important financial decisions. At the same time, they benefit from the scale, expertise, and security of the UK's largest advice business.

Speaker #2: So wherever we can, minimize that component, maximize the opportunity to spend in front of clients. Because that's where the buzz, that's where the adrenaline, that's where the rush comes from.

Speaker #2: So that's the piece that we are really laser-focused on. We have mapped out the client journey, we've mapped out the advisor journey, we understand where the pain points are, and one by one we are knocking these on the head to give the advisors more time, greater efficiency, and greater ability to improve.

Speaker #1: That means access to leading investment solutions such as our flagship Polaris range, which are managed by top fund managers from around the world. It means ongoing investment technology and service, a wide range of planning capabilities and solutions.

Speaker #1: And the strength and backing of a UK FTSE 100 business with clear market leadership and a long track record of success. As the external landscape evolves, our advisors are supported by an organization that has the resources and capability to understand, react, and adapt.

Speaker #2: And part of the pilots that we've been running have shown increases in new client acquisition for those parts of the business that have been part of the pilot.

Speaker #2: We've seen, for some of the smaller practices where they're using some of the AI, a significant uptick in terms of client numbers, and a significant increase in productivity.

Speaker #1: This ensures clients continue to receive the best service. Our business is predicated on fully backing our partnership community. We guarantee the advice and provide the technical insights to help them understand and adapt their advice for changes in tax, pension regulatory and political landscape.

Speaker #2: So, as we roll these new technologies and capabilities out throughout the partnership, and then as we help them optimize that technology to their processes and to their systems, we'd expect to see the advisors being able to do more and actually be able to support their profitability, along one of the earlier points.

Speaker #1: We believe this combination is unique in the UK market, and it's what makes our partnership model so powerful. As we continue to grow, we're able to invest more in the things that matter most to advisors and clients.

Speaker #2: And then, on the net flows expectations, one of the things that we have been tracking quite carefully is, through partner productivity and partner adviser productivity, we have seen, from a case count, an increase quite significantly.

Speaker #1: Better technology, better service, better support, better solutions. Indeed, we're currently investing at a level unprecedented in the market. Our scale enables us to do this.

Speaker #2: So, last year was a very busy year. We all know why it was a very busy year — it was a very busy year. And last year, the first half of last year and the first half of this year, we've seen a 9% increase in the number of cases that advisors are talking to clients about and engaging with clients on.

Speaker #1: And that's one of the reasons we believe our business model is becoming increasingly differentiated. So let me leave you with five closing thoughts. One, our strategy is clear, consistent, and delivering results.

Speaker #2: And the case size is down 10%, and largely, I think that's a function of the confidence in the economy. And we're seeing a lot more in Flagstone, as we mentioned earlier, talking to Andrew Green, answering his question.

Speaker #1: Two, we have strength in the business. We are entering the next phase with a compelling advisor offering, an enhanced client proposition, and increasing operational leverage.

Speaker #2: So we do think that actually the advisors are very busy. When I talk to them, they tell me how focused they are on what they're doing, how they're growing the practice, and how they're looking for new advisors.

Speaker #1: Three, we're operating in a large market with attractive long-term growth characteristics. Demand for trusted advice continues to grow. Four, technology is creating new opportunities to improve productivity and client experiences.

Speaker #2: And how they really feel they're making a difference in society. And to me, that's why I'm here, because I want to facilitate and enable more of that. Because what we do, what our advisors do, matters.

Speaker #1: We believe the value of scale, trust, and professional advice will only increase over time which plays to our strengths. Five, we have confidence in our direction of travel in an hour ability to continue delivering for all our stakeholders.

Speaker #2: It's really important. It helps people's lives. So, net flow expectations over the medium term—I would expect them to start pushing through the 3% level.

Speaker #2: On that basis, again, we need to be very alive to what happens in the economy, what's happening with confidence, et cetera, because we don't operate in a vacuum.

Speaker #1: Thank you for listening, and please tune in for our live Q&A, which will kick off at 9:00 AM. Thank you. And good morning, everyone.

Speaker #2: But we are moving into the amplifier phase next year. The amplifier phase is a serious growth phase. You've seen the consensus numbers in terms of the profitability.

Speaker #2: We're looking to continue investing in the firm. St. James's Place is very different from what it was a year ago, and it will be very different in a year's time and in two years' time.

Speaker #1: And thank you for joining us. Before we open for questions, a few brief opening remarks from me. Firstly, I'm very pleased that we've achieved a strong set of results for the first half.

Speaker #2: We're getting better and better at what we do.

Speaker #1: Good operating and financial performance. Continued strategic progress and further growth in both our client and advisor base. We delivered positive net inflows of 2.7 billion pounds, grew funds under management to a record 240.8 billion pounds, and continued to see strong engagement between client and advisors.

Speaker #1: Great. Thank you.

Speaker #3: The next question comes from Ben. I first read RBC.

Speaker #2: Good morning. I have questions in two areas, if I may. First, on the flow outlook, and then trying to tie that back to some of the advisor growth discussion this morning.

Speaker #1: These outcomes reflect the enduring demand for trusted financial advice and the strength of our advice-led model. We also continue to make good progress on our strategic journey.

Speaker #2: I want to de-think that the high-profile departures that we've all been reading about will be noticeable in the net flow result in 2027, just in terms of outflows, or given the movements you're talking about.

Speaker #1: Over the last few years, we have focused on strengthening and simplifying the business through a series of major programs. During the period, we made substantial progress in our historic ongoing service evidence review, and this has enabled a further provision release which we will be returning in full to shareholders through a buyback.

Speaker #2: And this was the general ebb and flow. Should this effectively be a wash, given that capacity is expected to be constant and the guidance around growing the advisor numbers next year?

Speaker #2: And then just secondly, on the BSP process, can you provide some color on how that process typically works for larger firms? How do you mitigate the complexity of splitting up larger books of business to help retain those assets?

Speaker #1: Alongside all of this, we continue to strengthen both our client and advisor proposition, invest in technology and productivity tools, and enhance the pay and benefits and support available to advisors across the partnership.

Speaker #2: And is that complexity playing any part in any of the higher-profile adviser movements that we've been reading about recently? Thank you.

Speaker #4: Ben, hi. Good morning. Thank you for those two questions. I'll ask Caroline to pick up the BSP process. BSP World reports into her, so she's all over it.

Speaker #1: Looking ahead, we remain confident in the long-term outlook for financial advice in the UK. The advice market remains underpenetrated, client needs are becoming ever more complex, and the value of trusted advice continues to grow.

Speaker #4: In terms of net flow results for next year, I mean, there's going to be so much more at stake than necessarily the number of advisors leaving.

Speaker #4: How the economy does, and what the government does in terms of any budgets and the like, is going to be a real factor. And just general consumer confidence, I think, is going to be—are going to be very real elements.

Speaker #1: As we move through the latter stages of the strengthened phase of our strategy, our focus is increasingly turning towards the opportunities ahead and the transition to amplify.

Speaker #4: Ben, if you think of the stats I gave just in responding to Christiano's questions, on our retention of funds generally and our retention of advisors when a partner leaves with a number of with a number of advisors, that if you get into that world, you effectively say that quite quickly, you're talking more like 25% of the fund that may be at real risk of an outflow.

Speaker #1: We believe St. James's Place remains the most compelling place in the UK to build, grow, and realize value, from a successful financial advice business.

Speaker #1: This enables our advisors to deliver the trusted advice, service, and support our clients' value. This leads us well positioned for the next phase of growth.

Speaker #1: With that, let's open up for questions.

Speaker #2: Thank you. We'll now begin the question and answer session. If you'd like to ask a question, please press star, followed by one on your telephone keypad.

Speaker #4: And as you can imagine, we are very keen to try and retain as many of the clients as possible. We have lots of clients who do stay and will continue to try and support our clients if they wish to stay.

Speaker #2: If you change your mind, please press star, followed by two. And when preparing to ask your question, please ensure that your device is unmuted locally.

Speaker #2: And our first question comes from Andrew Lowe with City.

Speaker #3: Hi, and thanks for taking the question. I've got two. The first is on your advisor retention rate in the first half. Could you clarify what that was in the first half and how that compares to the 91% retention rate that you saw in 2025?

Speaker #4: Clients are free to move, as advisors are free to move. And therefore, like in your business, every day the IP walks in and out of the door.

Speaker #4: We need to create an environment—culture, community, and environment—that people want to be in. And that's where we are laser-focused. That's where our time and energy, as an executive and as a board, is focused on.

Speaker #3: It seems likely to have gone down rather than up, but your advisor numbers are up 0.3% in the first half. And there have been unquantified planned exits from underperforming advisors.

Speaker #4: On that piece, Caroline. BSP, please.

Speaker #5: Yeah, no, thank you for the question, Ben. I am very passionate about this area. It's one of our big USPs, and it's an absolutely fantastic thing we have here.

Speaker #5: So, we are spending a lot of time, energy, and effort on this. The short answer is no, it doesn't. It isn't a problem for larger practices.

Speaker #3: Can we conclude that you're doing more lateral hires from other advice firms, or has the gap been bridged, of advisors graduating from the SJP Academy, where presumably day one productivity may be lower?

Speaker #5: We work very hard. We're doing management buy-ins, management buy-outs, employee ownership trusts. We have a succession consulting team we've set up that now works with businesses in the real world.

Speaker #5: If we have time to work with people, we can do basically anything. We can work with teams. On any of those measures, we've got a great corporate finance team.

Speaker #5: We've got great relationships with our lenders. We've got a lot of people who can work through the different problems that come with larger businesses.

Speaker #3: And how you are perceived to be retaining more of the advisor fees versus other platforms who seem to be talking about passing through 80 to 85% of the growth fees to their advisors.

Speaker #5: But to give you some real-life examples, in the first half we did our biggest BSP ever, which sold one of our top ten businesses into another one.

Speaker #5: So that's the biggest one we've done. And also, this half, we've had a smaller business buying a business—I think it was about three times bigger than it.

Speaker #5: So we're also helping businesses—you can have things like that. So absolutely not. I mean, the bigger they are, the more time it takes.

Speaker #5: But we have all the people, the funding, and the ability to do that, so it's exciting times. We're continuing to evolve that proposition.

Speaker #4: Ben, just a bit of thank you, Caroline. Just a little bit of an adjunct on my response to your first question as well. The feedback we've had from the partners off the back of the announcements on Friday last week has been incredibly positive.

Speaker #4: And partners and advisors up and down the country are saying that they plan on using the catch-up payment that we will pay them in March next year.

Speaker #3: Thanks.

Speaker #1: Okay, Andy. Thank you. So we're hitting a topic I expected that we would spend a little bit of time on today. I think maybe just some broader comments around the whole element of partner retention and the like and then I will get to those explicit components.

Speaker #4: To invest back into their business—in terms of capability, in terms of advisors, in terms of growing their business. So there's a real confidence in the partnership, in terms of growth.

Speaker #1: Firstly, I think I would say the reality forms to every wealth manager around the world is the ebb and flow of advisors. We've seen it for decades in St.

Speaker #4: And every quarter, we are releasing new and improved technology and elements, which are giving people—and giving our partners and advisors—greater confidence in our ability to get things done.

Speaker #1: James's Place, and it's not particularly new. So our partner retention number is running at 90% at the moment. Last year, it was 91%. So it's a marginal so it's a 1% delta.

Speaker #4: So that we can progress, and we can make their lives easier. All of that should support the earlier message that I gave as well.

Speaker #1: Which per the math, I think it ends up at about 50 advisors in terms of the difference. So it's very much at the margin.

Speaker #4: But thank you for those questions, Ben.

Speaker #2: Thanks for the answers.

Speaker #1: In terms of what we're doing. We unfortunately lose advisors to a broad range of firms, and many retire or leave the profession. However, we also recruit advisors from a very broad range of firms, including IFAs.

Speaker #3: Thank you. And the next question comes from Gregory Simpson with BNP Paribas.

Speaker #2: Hi. Morning. I have a few questions from my side. Firstly, are you seeing any behavioral changes or different client conversations around pensions, given the inheritance tax and the inheritance tax changes going on next year, just where it’s a big part of your flow base?

Speaker #2: Second question is: I want to ask if you did see a pronounced shift into index funds, like some other adviser businesses have seen in the UK?

Speaker #1: And as I said, we have a very, very good team. And if anything, we're actually we've recently strengthened the team earlier this year. We strengthened the team.

Speaker #2: How would you see that impacting your net profit margin from funds? And then finally, just on that 50% retention rate of clients and advisors that do leave, do you think you can proactively increase that over time through better efforts in connecting advisors with clients, and so on?

Speaker #1: We brought some additional folk on. Because we indicated back in February, our ambition to be able to see the advisor numbers grow from 2027.

Speaker #1: Therefore, there's normally a bit of a time lag in the pipeline in terms of building up on that. So we've started investing in that piece.

Speaker #2: Thank you.

Speaker #4: Greg, thank you. So, the world of advice has become more complex because of the inheritance tax changes, which land in April next year. So we are seeing advisors and partners talking with clients where they have large pension funds.

Speaker #1: And the other component is the academy. And the academy over the first half of this year has been very, very busy. We've seen good numbers coming through in terms of graduation, and we've seen great demand for advice and a real positive reaction to our campaign of trying to encourage more women into the advice profession.

Speaker #4: And engaging with them on how they—and what they might do that might be different from the original plan before the tax rules changed.

Speaker #1: So we've been active in that regard, and we've seen real tick up in interest in that for the longer term. But over the course of the last six months, the academy has actually contributed significantly in terms of our advisor numbers.

Speaker #4: So there's undoubtedly been a degree of a shift. I don't want to tell you necessarily what the shift is, because that might be tantamount to giving you financial advice.

Speaker #4: And I've got 5,000 experts who can do that incredibly well. But suffice it to say that, actually, the element for many folks is actually using the pensions in terms of what's been done.

Speaker #4: In terms of index funds, we have seen an impressive take-up on Polaris Multi-Index. Since launch in October last year, it now stands at £4.6 billion.

Speaker #1: And we want to make sure the St. James's Place is the best place for the best advisors to join developing and build a successful career in business.

Speaker #1: And we are laser focused on this. Also that the vast majority of our investment of over 260 million pounds over the next few years is focused on improving our offering for advisors and hence for clients.

Speaker #4: Some of that is new money coming in. Feedback from clients has been overwhelmingly positive, and many clients have been asking for something like this for some time.

Speaker #1: Now, no one else in the market is investing in anywhere near the scale. And we think that's also why we have nearly 20% of the UK advisors within St.

Speaker #4: So, it's been great that we've been able to give it to them. On that particular patch, the margin—the profitability—of Polaris Multi-Index is appropriate.

Speaker #1: James's Place. And nearly half of all new advisors to the profession. Come through our academy. Now, remuneration is or advisor pay is one of the components of effectively the offering that we have to advisors.

Speaker #4: And we don't feel that it would necessarily be a drag in terms of our margin, because there's quite an active asset allocation layer that sits above it.

Speaker #4: And then finally, in terms of the 50% retention, let me just elegantly say that we're not sitting on our hands. We will do, and we will engage with advisors, partners, clients, to try and make sure they understand the direction of travel that we are taking, what we're doing.

Speaker #1: There are so many other components to it. But to answer your question, directly, the partner element that advisors retain of the advice fees we pay is about 80%.

Speaker #1: And I think a figure that's somewhat higher than many folk assume. So it's our focus as an organization, as an executive team, is on ensuring we have the leading advisor offering.

Speaker #4: And why we believe that St. James’s Place is the best place for them to grow and run a business, regardless of what competition may or may not be—may or may not be—offering.

Speaker #4: So, the environment is more competitive. There's more consolidation happening, and I expect that to be the case. In light of that, we are going to be active in the market, as we have been for the last 30, 34, 40 years.

Speaker #5: I'd just add on to that, Greg, on the index. Obviously, it's our fund manager where our cost analytics comes from. We can use our scale advantage and work with their scale advantage.

Speaker #1: And we're going to continue to stay focused on that. Supporting our advisors in that regard. And the second is advisor numbers. So we're focused on both.

Speaker #1: And we expect to be able to deliver both over the medium term. So hopefully that answers your question. Maybe a little bit more fulsome, but hopefully it just gives everyone a bit of sense of the broader color and how we're focusing on these matters.

Speaker #5: And that's where we get the benefit of the value on those funds.

Speaker #2: Thank you. Can I just quickly follow up, actually, all the changes around advisor remuneration in the last week or so, do you see that as the kind of fairly neutral to the that net fund margin kind of guidance?

Speaker #3: That's great. Thanks so much.

Speaker #4: Thank you. And the next question comes from Nasib Ahmed with UBS.

Speaker #5: Yeah, yeah, it's within that. Any funding was done within efficiencies we've made within the business. The margin, the guidance still stands. The margin guidance still stands, yeah.

Speaker #3: Thanks. Morning. Thanks for taking my questions. Maybe I just want to follow up on the two points that you just made, Mark. Can you give us a number?

Speaker #2: Thank you.

Speaker #3: Just as a reminder to all attendees: to ask a question, please press star one on your telephone keypad. Our next question comes from Alex Bowers with KBW.

Speaker #6: Morning. I’ve had two questions from my side. Just firstly, a number of firms obviously scaled very successfully under the SJMP model historically, and are now being poached by consolidators. It feels kind of logical that consolidators will continue to target these top firms within your business.

Speaker #6: Just interested to hear if you can give us any color on the kind of conversations you've had with other big partner firms within the SJP network, and how you're kind of responding to this threat.

Speaker #6: The second question is just around the kind of size of new partner firm you're looking to bring into the network. Given you've lost some larger firms, are you looking to replace these with something like a like-for-like size firm, or are you happy to add smaller firms and allow them to scale?

Speaker #3: Quilter have a similar chart, and they've got 1.56% on a 10-year basis with a 500K pot instead of the 100K pot. So they don't seem to be on the chart.

Speaker #6: Thanks.

Speaker #4: Alex, thank you. I think it's fair to say, Alex, that we have a very active program of engagement with our firms within St. James's Place, and we will continue to have a very active program.

Speaker #3: So I don't know what I'm missing there. I don't know if you can comment on that. Thanks.

Speaker #1: So I'll ask Caroline to give a little bit more color on the element of the 80% and how that is compiled. On the chart, I think we've got 16 competitors.

Speaker #4: We have a number of consultation groups where we consult with partners and advisors on various matters before we decide on them. So we're trying to do as much as possible with the partnership, rather than to the partnership.

Speaker #1: I don't think we named them, et cetera, or set out who they are. I would expect them to be to have all the usual suspects in them.

Speaker #4: And ensuring that what we do lands well, is clearly understood, and is really focusing on the things that matter to the partnership. So, we have a very active line of dialogue—always have.

Speaker #4: And I expect we always will, because it's our USP. And you look after, you protect, and you polish your USP. So we're very, very focused on that piece.

Speaker #4: In terms of the size of folk coming in, we have had, and continue to have, practices of all different shapes and sizes joining us along the way.

Speaker #1: Other than to say, I think both play an active role and the ratios shift and change broadly over the course of the years. Within a fairly tight corridor.

Speaker #4: Our existing firms are growing. We have a good smattering of firms that are very large, some that are medium-sized, and a lot that are in the smaller element, etc.

Speaker #1: So but we are looking well, and we are looking to spend more in the academy in terms of increasing the number of cohorts that we have going in.

Speaker #4: They all share one thing in common, which is focus on the client, and through that, a real element of growth into the opportunity that's there.

Speaker #4: So there isn't a particular size or cut that we are looking for. If somebody is excited by the culture, the environment, the community that we create here, which we think is very, very different, then they're very welcome to join us.

Speaker #1: So over the fullness of time, we would expect to have more people coming in through the academy. In addition, we'd also expect to have more lateral hires.

Speaker #4: And we'd love to have them.

Speaker #6: Thank you.

Speaker #3: Thank you. And our next question comes from Charles Bennett with Rothschild.

Speaker #1: James's Place. And then finally, I'm also very conscious of the fact that there's been a lot of consolidation, a lot of movement around the market.

Speaker #6: Hi, Mark. Hi, Caroline. Thanks for taking my questions.

Speaker #4: Hi, Joss.

Speaker #5: Hi.

Speaker #6: 2023 to 2030.

Speaker #4: Sorry, Charles, would you mind starting that again? We missed the beginning of your question, Charles.

Speaker #6: Of course. Don't worry. So, the first question is: you reiterated confidence in doubling adjusted profit from '23 to 2030. What markets and net flow assumptions from here are now embedded in that doubling assumption?

Speaker #1: So we're spending considerable time and energy around that. So I think it's fair to say that as a team, we are very focused on retention, we are very focused on acquisition, and we're very focused on creating a long-term pipeline for the profession through the academy.

Speaker #6: And do you expect to revise that profit target up or down as we get closer to 2030? Or are you going to manage the business so that that's roughly where you end up?

Speaker #1: Caroline, do you want to give a little bit of extra color on the 80%?

Speaker #2: Yeah. Yeah. So to look at the 80%, you have to consider obviously together all the initial and ongoing advice fees that we pay to partners, plus the allowances we give them.

Speaker #6: Second question: you talked earlier in this call about your growth algorithm having two drivers—productivity and adviser growth. Where do you see that second driver trending over the medium term, noting that it's been a period of relatively slower adviser headcount growth versus history in the last few years?

Speaker #2: So we pay out two-thirds of initial advice charges to the advisors. This obviously increases substantially all the initial advice charges. When you add the other allowances we pay to the partnership, so that's consistent with what we said under our new charging structure of the sort of new business makes minimal profit.

Speaker #6: Just keen to understand where you’d like that to settle long term, and whether the Academy and the adviser headcount movement in the industry more broadly can support that long-term rate.

Speaker #2: When you add in the amount we pay on ongoing 80 basis points under the new charging structure, but then you've also got under the old charging structure, advisors got all the ongoing advice fees.

Speaker #6: And then, thirdly, I think you've talked in the past about SS&C as being one of the expenses on fund. Can you quantify it in terms of basis points on fund?

Speaker #2: So it's a combination rather than specifically picking out any of the specific costs. So you have to take all that together and do.

Speaker #6: Just trying to deconstruct the new simplified expense on fund margin into advisor fees, third-party fund fees, and then other ongoing costs, like SS&C.

Speaker #3: And once you're off gestation, can you just confirm that you're that 80 becomes 75 or greater than 75?

Speaker #6: Thanks.

Speaker #4: Okay, all right. Why don't I deal with the second element in terms of the growth algorithm question, and then ask Caroline to pick up the first and the third.

Speaker #2: It will be sorry, say that again, Nasib.

Speaker #3: So you're paying out 100% on all of the firm. That's in gestation. But once that runs off and let's say 2032, that 80% becomes 75.

Speaker #4: Yep. So in terms of the growth algorithm, as you said, I mentioned productivity being very, very important, and advisor growth also being very important.

Speaker #2: It reduces not 75, but it reduces a little bit, yes.

Speaker #4: And we said last year that, actually, advisor growth in the short term would slow down as we went through an element of looking at some of the partners where productivity was particularly low, and looking to see what we could do to try and support an increase in terms of activity.

Speaker #3: Okay. Thank you.

Speaker #4: Thank you. And the next question comes from Andrew Crane with Autonomous.

Speaker #4: Which led to some partners leaving, and that trickles through in terms of some of the numbers from last year, and a little bit of the numbers this year.

Speaker #4: I would expect advisor growth to increase to low single-digit growth going forward. I do think that the industry as a whole, in terms of advisor numbers, has been growing at less than 1% for quite some time.

Speaker #5: But then you say whether this effect extends to fully year 2026 will depend on how markets develop in the second half. I just want to explore the implication of that.

Speaker #5: If markets are normal, is the implication of what you're saying that the second half profits will be higher than the second half '25? That's the first question.

Speaker #4: And therefore, the academy is going to have to do the lion's share, the heavy lifting, on that. Because we've been doing the academy for the last 10-plus years, we know what it takes.

Speaker #5: Second and third questions, just can you update us a bit more on the high net worth initiative and also on the flagstone cash transmission?

Speaker #4: We know what's required. We have a great pipeline of recruiters. We know the type of people we're looking for, and we think the market's actually very attractive for people to come in and join us.

Speaker #5: If I'm transferring cash now from Flagstone into St. James's Place, how long will it take me?

Speaker #4: Through the element of the Academy. So, advisor growth we think will be real and meaningful, and we think that productivity will also be a very, very important lever for us to pull.

Speaker #1: Perfect. All right. Well, why don't I start with the high net worth piece and the Flagstone, Andrew, and then Caroline can pick up on the second piece.

Speaker #1: So high net worth will continue to be part of our strategy. Over the course of the last six months, we're taking advantage of the program and leadership team to have begun significant increase in high-quality private client events to be able to deepen engagement with expanding our central advisor support to enhance the servicing of high net worth.

Speaker #4: And we are focused on both. We're looking to grow both productivity and advisor growth from '27 onwards. Caroline, in terms of the doubling?

Speaker #5: Yeah, so the doubling, yeah. I mean, look, that's our ambition rather than specific formal guidance. We're staying with that. We're going to set that in 2024, when the world was a challenging place to get people to look out.

Speaker #5: We're not necessarily going to retrade that right now. And, obviously, we guide every year. I mean, the assumptions around that are sort of mid- to high-single-digit increases in fund every year, going back to sort of normal markets type thing.

Speaker #1: We've launched a pilot high net worth training program with one of the largest practices. Paving the way for a broader rollout next year, increasing the volumes of high-quality practices serving the complex high net worth client needs.

Speaker #5: We are, I would absolutely say—as I did with those—that it's not a cap. Definitely not a cap on our ambition. So we will, obviously, guide every year as we go towards that.

Speaker #5: On the actual income—so expenses on fund—when we did our new simplification reporting, we had a lot of debates about how we should do this.

Speaker #1: In terms of Flagstone, so in the second half of this year, we are expecting to dramatically change and we're working closely with Flagstone on dramatically changing the length of time it takes to move money from Flagstone into St.

Speaker #5: And really, for simplicity, we don't give that breakdown. We find that both income and expenses obviously vary with things like daily fund levels, but we pay out such as, obviously, other than the margin, we pay out significant amounts of that so that we're just not we're not having that we're not giving that amount of granularity.

Speaker #1: James's Place. So I would expect we'll be able to report that that is all done and dusted when we chat to you again. It's a key component of the engagement with Flagstone.

Speaker #4: Yeah, Charles, just to reinforce what Caroline has said: we wouldn't see the ambition as a cap by any stretch. I'm not going to manage this business and curtail growth.

Speaker #1: In the meanwhile with Flagstone, what they've done is they've massively facilitated take-home procedures so most of the information is now as auto-populated from across from St.

Speaker #4: We're going to grab every piece of growth that we sensibly can that is quality growth, because the opportunity is so huge out there. UK advice, on average—9% of folk take advice.

Speaker #1: James's Place. And the rates that clients are getting has been has improved. The level at which clients invest has been lowered a bit to make it more accessible.

Speaker #4: In the US, it's something like 27%. So the UK market should be able to grow at least two to three times. And therefore, the growth opportunity for us is huge.

Speaker #1: And we've seen an increase. I think it's to 5.9 billion looking at the team. Yep, for 5.9 billion now in Flagstone. So a meaningful increase.

Speaker #4: And we're going to look to prosecute that as best we possibly can.

Speaker #6: Thanks so much.

Speaker #1: Clearly, just talking about clients and the markets generally, the UK markets, confidence in global economy and in the uncertainty. And wishing to have some in cash.

Speaker #4: Thanks, Charles.

Speaker #2: Thank you. And that was our final question, so I will hand back over to you, Mark, for any final comments.

Speaker #4: Oh, okay. Thank you for your time today, everyone, and for your questions. As I said at the outset, we're very pleased with the progress we've made in the first half, both in terms of performance and in terms of operational execution.

Speaker #1: And this is an incredibly effective and efficient way of being able to get your cash to work a little bit. But ultimately, as we all know on this call, the UK has a broader issue, and that people are oversaving underinvested.

Speaker #4: And we think that, with strong foundations, continued investment in our client and adviser proposition, and a clear strategic direction, we remain very confident in the opportunities ahead.

Speaker #1: So at least through Flagstone, our advisors have great visibility of what's in Flagstone. And as part of their general engagement with clients. Exploring what's in Flagstone and what possibly could be, should be invested.

Speaker #1: Because the opportunity cost of being in cash versus being in the market is quite significant, as I'm sure you're aware. Caroline?

Speaker #2: Yeah. And thank you, Andrew. Yes. Look, I think I'm actually not sure what a normal market is anymore, actually. So but taking that aside, if we think it's something normal second half of the year, yes, we would expect probably the half 2, 26 profits would be higher than half 2, 25 profits.

Speaker #2: But as I said, it all depends upon markets.

Speaker #3: Thank you.

Speaker #4: Thank you. And our next question comes from David McCann with Deutsche Bank.

Speaker #3: Yeah. Morning, team. Thanks for taking my questions. Two for me, please. The first one to follow up on the advisor retention piece. Obviously, a few questions you've had already about the split of shareholder and advisor economics.

Speaker #3: But I just wanted to drill into that a bit more. Obviously, your our questions are really focused on what is the current split. The question really is, do you see this changing going forward given the comments you made about the competitive this of the market and there's obviously what we're all seeing.

Speaker #3: And yeah, adjacent to that point, are you still expecting roughly flat overall advisor numbers over the whole year? And then the second question is on flows more generally.

Speaker #3: I think it's fair to say they remain at the softer end. I think where most people would apply to the why is that the case?

Speaker #3: What do you think it will take for them to positively inflect? And indeed, do you have any medium-term aspirations of where you'd like them to be for the business of your size?

Speaker #3: Thank you.

Speaker #1: David, thank you. In terms of advisor retention, advisor numbers just generally, I think, as I said at the earlier on, the element of advisors and our leading advice offering is fundamental to who we are as an organization.

Speaker #1: So we are laser-focused on ensuring that we have the very best offering to advisors in the round. So when we talk to partners, advisors about why they join us, why they stay with us, they tell us the academy is so valuable to them, the element of really joining a community.

Speaker #1: They don't feel alone, isolated. They're part of something much bigger. The ongoing technical support, training, advice, etc. We also have the highest concentration of financial chartered financial planners in the UK.

Speaker #1: So it's another way of saying we have the highest quality financial advisors. The unique investment management approach, the BSP program, kind of growth and succession component.

Speaker #1: We also guarantee our advisors advice, which is really important for the advisors and the clients gives them great confidence. And a massive recognizable and supported brand.

Speaker #1: All of those components are part and parcel of what the leading advisor offering component is. And we will ensure that we continue to have a leading advisor offering.

Speaker #1: So we'll constantly looking at it, constantly looking to see what we need to do to ensure that we are providing the best all-round offering around the element of how we support around technology and how we make the overall profitability of our advisors and partners' businesses better.

Speaker #1: So the element of how we do more for them, how we facilitate, how we support them, will continue to be really, really important. As for advisor numbers going forward, I think our ambition would be that we would look to see kind of numbers flattish as we said at the beginning of the year.

Speaker #1: And in 2027, we'd look to be seeing growth kicking off again in terms of advisor numbers. Based on the element I mentioned earlier this morning, round the fact that we have invested further in the academy and we've invested further in our recruitment team and all of these by definition have got an element of a lead time.

Speaker #1: So I'd expect to see them starting to come through later this year, early next year, in terms of the contribution of that investment. Caroline, do you want to comment on the flows, please?

Speaker #2: Yes, absolutely. Thanks, David. So look, if I take the flows apart into the component parts, I mean, if you take the gross flows, we attracted 10.5 billion of gross flows for the half, which is consistent with our record result, which we achieved in half 1, 2025.

Speaker #2: So and that's despite the sort of heightened macroeconomic and sort of geopolitical uncertainty during the period. So it's a we're happy with that. Advisors are busy, case volumes are up 9% on H1, 2025, although case size is down a little bit about the same amount.

Speaker #2: So on that, that's what I'd say on inflows. I mean, outflows in absolute terms are up because that's given the strong sort of fund growth.

Speaker #2: So average fund in H1, 2026 was up 18% on the previous half, or half 1, 25. But our flows have only increased by 16%.

Speaker #2: So our retention rate for the half was 95.4% up from 95.3% in last year. So it's above our 95% ambition. From 6.9% of average fund last year to 6.7% this year in half ones.

Speaker #2: So that's sort of it. But then if you come to net flows, which we know is obviously the sum of the two, with average fund higher 18% higher than a year ago.

Speaker #2: And it's obviously a really good result for our clients. We're pleased with that. But inflows don't scale to the same extent as outflows, which generally increase with funds.

Speaker #2: So this dynamic is obviously reflected in our net flows. But they are in the 2 to 3 percent of openings fund, which is sort of our expectations right now.

Speaker #2: And so that's good. But I think as you go forward to your point going forward, obviously, there are two factors we look at here.

Speaker #2: Obviously, partner numbers and advisor numbers and obviously productivity. And we're switching our attention really academy and lateral hires. es. We've invested into and also we're about to amplify we're continuing our work and increasing our work on the productivity work within Amplify.

Speaker #2: So what I would say is the 2 to 3 percent is definitely not a cap.

Speaker #3: Great. Thank you very much.

Speaker #1: Thanks, David.

Speaker #2: Thanks, David.

Speaker #4: And the next question comes from Christiana Hossein with Bank of America.

Speaker #5: Oh, good morning. Thank you for taking my questions. My first question is just following on from the discussion on advisor retention, sorry. So I wanted to ask, there's been a lot of media speculation about practice and sovereign wealth.

Speaker #5: I was just wondering if you're able to provide an update here and whether they've actually provided notice to leave. And then how do you also intend to retain advisors and some in the event of a practice or partnership leaving?

Speaker #5: My second question is relating to AI. So I was just wondering how you think about shared economies of scale from your productivity benefits relating to AI.

Speaker #5: And how do you also intend on reinforcing your large-scale advantages versus peers? And then I just had a follow-up question as well on net flow expectations.

Speaker #5: So I know you were talking about how you've done quite a bit in terms of the academy and improving productivity. Pricing's obviously not lower now.

Speaker #5: Remediation's pretty much behind. So in terms of accelerating this 2 to 3 percent net flows, given that it seems like a lot of the building blocks are in place, how long until you expect to see this start to improve?

Speaker #5: And yeah, what are your expectations maybe over the more medium term? Thank you.

Speaker #1: Okay. A nice cross-section of questions, Christiana. So firstly, unsurprisingly, we're not really going to comment on an individual partner business within St. James' Place, if you don't mind.

Speaker #1: I'm sure you'll understand the reason for it. I think there's a couple of things just to remind or maybe from people about. Firstly, when an advisor leaves, and as we say, it is normal that we will lose some.

Speaker #1: And we'd much rather not lose advisors, but we understand everybody's got their own personal reasons for that. It doesn't mean that the clients leave.

Speaker #1: And the clients often find that actually what they have with St. James' Place is early in terms of investment performance, in terms of service, in terms of support, in terms of the brand, the advice guarantee, all these different components.

Speaker #1: They really matter to clients. And so we generally find that we retain on average kind of 50% of client fund. Now, another key component is that when a partner that has multiple advisors in a practice leaves, we do have those as well.

Speaker #1: And as I said, we don't generally try and encourage that. But we'd much rather them stay. But if they do go, we tend to retain at least 50% of their advisors.

Speaker #1: That's just what the stats show. So the element of there is some dislocation, there is kind of time and attention that needs to be spent.

Speaker #1: We'd much rather not have it. But it's not an immediate flow that if somebody leaves, all their fund and all their business leaves with it.

Speaker #1: And that, I think, just talks to the testimony of the strength of relationship we have with multiple partners and advisors and with clients as well.

Speaker #1: And what it is that clients value. On the question of AI and technology, and thank you for the question. Shared scale of economics and economies of scale and the like.

Speaker #1: Scale benefits for us really coming through in a few ways. One is in terms of our ability with fund managers to be able to extract greater margins.

Speaker #1: And unfortunately, you and others on the call will be just generally seeing that. Two is an element of because of our size and scale, most of the big global IT brands work with us, talk to us.

Speaker #1: And because of our scale, we can negotiate very good prices for either ourselves or for and for the partners and advisors, making sure that they pay well below rack rate for any of the kit that they use or that they need, whether it be conventional technology or whether it be some of the newer AI capabilities and technologies.

Speaker #1: And effectively, the scale benefits, we look to put back into the business. So the scale benefits and just general kind of efficiencies are part and parcel of how we've been able to pay for and fund the elements of the changes we made to the fees that we're paying to the advisors from later this year and for next year.

Speaker #1: It also going forward, I think, will be how we will look to reinvest back into the business in terms of technology. Because the pace of technology is constantly evolving.

Speaker #1: It truly is exponential, not linear. And therefore, I think how we continue to evolve our technology stack and how we continue to ensure that advisors get the most streamlined process as possible is going to be really, really important.

Speaker #1: Because ultimately, what advisors love doing is being in front of their clients. The admin piece just generally is because any advisor around the world, that's not why they do what they do.

Speaker #1: So wherever we can, minimize that component, maximize the opportunity to spend in front of clients. Because that's where the buzz, that's where the adrenaline, that's where the rush comes from.

Speaker #1: So that's the piece that we are really laser-focused on. We have mapped out the client journey. We've mapped out the advisor journey. We understand where the pain points are.

Speaker #1: And one by one, we are knocking these on the head to give the advisors more time greater efficiency and great ability to improve. And part of the pilots that we've been running have shown increases in new client acquisition for those parts of the business that have been part of the pilot.

Speaker #1: We've seen for some of the smaller practices where they're using some of the AI, a significant uptick in terms of the client numbers. In terms of productivity.

Speaker #1: So as we roll these new technology and capabilities out throughout the partnership, and then as we help them optimize that technology into their processes, into their systems, we'd expect to see the advisors being able to do more and actually be able to support their profitability along one of the earlier points.

Speaker #1: And then on the net flows expectations, one of the things that we have tracking quite carefully is through partner productivity and partner advisor productivity we have seen from a case count increase quite significantly.

Speaker #1: So last year was a very busy year. We all know why it was a very busy year. It was a very busy year. And last year, the first half last year and first half this year we've seen a 9% increase in the number of cases that advisors are talking to clients about and engaging with clients on.

Speaker #1: And the case size is down 10% and largely, I think that's a function of the confidence in the economy. And we're seeing a lot more in Flagstone, as we mentioned earlier, talking to Andrew Green, answering his question.

Speaker #1: So we do think that actually the advisors are very busy when I talk to them, they tell me how focused they are on what they're doing and how they're growing the practice and how they're looking for new advisors.

Speaker #1: And how they really feel they're making a difference in society. And to me, that's why I'm here. Because I want to facilitate and enable more of that.

Speaker #1: Because what we do, what our advisors do matters. It's really important. It helps people's lives. So net flow expectations over the medium term, I would expect them to start pushing through the 3% level on the basis, again, we need to be very alive to what happens in the economy, what's happening with confidence, etc.

Speaker #1: Because we don't operate in a vacuum. But we are moving into the amplifier phase next year. The amplifier phase is a serious growth phase.

Speaker #1: You've seen the consensus numbers in terms of the profitability. We're looking to continue investing in the firm. St. James's place is very different from what it was a year ago.

Speaker #1: And it'll be very different in a year's time and in two years' time. We're getting better and better at what we do.

Speaker #2: Great. Thank you.

Speaker #3: The next question comes from Ben. I first read RBC.

Speaker #4: Morning. Questions in two areas, if I may. Just on the flow outlook and trying to tie that back to some of the advisor growth discussion.

Speaker #4: This morning, I wondered, do you think that the high-profile departures that we will be reading about will be noticeable in the net flow result in 2027, just in terms of outflows or given the movements you're talking about and the sort of the general ebb and flow?

Speaker #4: Should this effectively be a wash, given that capacity is expected to be constant and the guidance around growing the advisor numbers next year? And then just secondly, on the BSP process, can you provide some color on how that process typically works for larger firms?

Speaker #4: How do you mitigate the complexity of splitting up larger books of business to help retain those assets? And is that complexity playing any part in any of the higher-profile advisor movements that we've been reading about recently?

Speaker #4: Thank you.

Speaker #1: Ben, hi. Good morning. Thank you for those two questions. I'll ask Caroline to pick up the BSP process. BSP world reports into her. So she's all over it.

Speaker #1: In terms of net flow results for next year, I mean, there's going to be so much more at stake than necessarily number. How the economy does, what the government does in terms of any budgets and the like is going to be a real factor.

Speaker #1: And just general consumer confidence, I think, is going to be are going to be very real, very real elements. Ben, if you think of the stats I gave just in responding to Christiano's questions, on our retention of fund generally and our retention of advisors when a partner leaves with a number of with a number of advisors, that if you get into that world, you effectively say that quite quickly, you're talking more like 25% of the fund that may be at real risk of an outflow.

Speaker #1: And as you can imagine, we are very keen to try and retain as much of the as many of the clients as possible. We have lots of clients who do stay and will continue to try and support our clients if they wish to stay.

Speaker #1: Clients are free to move as advisors are free to move. And therefore, like in your business, every day the IP walks in and out of the door.

Speaker #1: We need to create an environment to culture, community, and environment that people want to be in. And that's where we are laser-focused. That's where our time, energy, as an executive, and as a board is focused on.

Speaker #1: On that piece. Caroline, BSP, please.

Speaker #5: Yeah. No, thank you for the question, Ben. I am very passionate about this area. It's one of our big USPs. And it's absolutely fantastic thing we have here.

Speaker #5: So we are spending a lot of time and energy and effort on this. The short answer is no. It doesn't. It isn't a problem for larger practices.

Speaker #5: We work very hard. We're doing management buy-ins, management buyouts, employee ownership trusts. We have a succession consulting team. We've set up that now works with businesses like the real world.

Speaker #5: If we have time to work with people, we can do basically anything. We can work with teams. On any of those measures, we've got a great corporate finance team.

Speaker #5: We've got great relationship with our lenders. We've got a lot of people who can work through the different problems that come with larger businesses.

Speaker #5: But to give you some real live examples, in the first half, we did our biggest BSP ever, which. So that's the biggest one we've done.

Speaker #5: And also, we've also this half, we had a smaller business buying a business. I think it was about three times bigger than it. So we're also helping businesses you can have things like that.

Speaker #5: So absolutely not. I mean, the bigger they are, the more time it takes. But we have all the people, the funding, and the ability to do that.

Speaker #5: So it's exciting times. And we're continuing to evolve that proposition.

Speaker #1: Ben, just a bit of a thank you, Caroline. Just a little bit of an adjunct on my response to your first question as well.

Speaker #1: Is feedback we've had from the partners off the back of the announcements on Friday last week have been incredibly positive. And partners and advisors up and down the country are saying that they plan on using the catch-up payment that we will pay them in March next year.

Speaker #1: To invest back into their business in terms of capability, in terms of advisors, in terms of growing their business. So there's a real confidence in the partnership in terms of growth.

Speaker #1: And every quarter, we are releasing new and improved technology and elements which are giving people and giving our partners and advisors greater confidence in our ability to get things done.

Speaker #1: So that we can progress and we can make their lives easier. So all of that should support the earlier message that I gave as well.

Speaker #1: But thank you for those questions, Ben.

Speaker #4: Thanks for the answers.

Speaker #3: Thank you, Andy. Next question comes from Gregory Simpson with BNP Paribas.

Speaker #4: Hi. Morning. A few questions from my side. Firstly, are you seeing any behavioral changes or different client conversations around pensions, given inheritance tax, the inheritance tax changes going on next year?

Speaker #4: Just where it's a big part of your flow base. Second question is, want to ask if you did see a pronounced shift into index funds like other advisors have seen in the UK?

Speaker #4: How would you see that impacting your net profit margin from funds? And then finally, just on that 50% retention rate of clients and advisors that do leave, just wondering, do you think you can proactively increase that over time through kind of better efforts and connecting advisors with clients and so on?

Speaker #4: Thank you.

Speaker #1: Greg, thank you. So the world of advice has become more complex because of the inheritance tax changes, which land in April next year. So we are seeing advisors, partners talking with clients where they have large pension fund and engaging with them on how they and what they might do that might be different from the original plan before the tax rules changed.

Speaker #1: So there's undoubtedly been a degree of a shift. I don't want to tell you what necessarily what the shift is because that might be a tantrum after giving you financial advice.

Speaker #1: And I've got 5,000 experts who can do that incredibly well. But suffice it to say that actually, the element of for many folks is actually use the pensions in terms of what's been done.

Speaker #1: In terms of index funds, we have seen a an impressive take-up on Polaris Multi-Index. Since launch, launched in October last year, it's now stands at 4.6 billion.

Speaker #1: Some of that is new money coming in. Feedback from clients has been overwhelmingly positive. That many clients have been asking for something like this for some time.

Speaker #1: So it's been great that we've been able to give it to them. On that particular patch, the margin, the profitability of Polaris Multi-Index is appropriate.

Speaker #1: And we don't feel that it would necessarily be a drag in terms of our margin, because there's quite an active asset allocation layer that sits above it.

Speaker #1: And then finally, in terms of the 50% retention, let me just elegantly say that we're not sitting on our hands. We will do and we will engage with advisors, partners, clients, to try and make sure they understand the direction of travel that we are taking, what we're doing.

Speaker #1: And why we believe that St. James's Place is the best place for them to grow and run a business, regardless of what competition may or may not be may or may not be offering.

Speaker #1: So the environment is more competitive. There are there's more consolidation happening. And I expect that to be a case. In light of that, we are going to be active in the market as well as we have been for the last 30, 34 years.

Speaker #5: I'd just add on that, Greg, on the index, the obviously, it's our fund manager that we're the way our cost benefits comes from. We can use our scale advantage and work with their scale advantage.

Speaker #5: And that's where we get the benefit on the of the value on those funds.

Speaker #4: Thank you. Can I just quickly follow up, actually, all the changes around advisor remuneration in the last week or so, do you see that as being kind of fairly neutral to the that net fund margin kind of guidance?

Speaker #5: Yeah. Yeah. It's within that. Any funding margin, the guidance still stands. The margin still the margin guidance still stands, yeah.

Speaker #4: Thank you.

Speaker #3: So just as a reminder to all attendees that to ask a question, it is star one on your telephone keypad. And our next question comes from Alex Bowers with KBW.

Speaker #6: Morning. I've had two questions from my side. Just firstly, a number of firms obviously scaled very successfully under the SJMP model historically, and now being poached by consolidators.

Speaker #6: It feels kind of logical that consolidators will continue to target these top firms within your business. Just interested to hear if you can give us any color on kind of conversations you've had with other big partner firms within the SJP network and how you're kind of responding to this threat.

Speaker #6: The second question is just around the kind of size of new partner firm you're looking to bring into the network. Given you've lost some large firms, are you looking to replace these with kind of like-for-like size firms, or are you happy to add smaller firms and allow them to scale?

Speaker #6: Thanks.

Speaker #1: Alex, thank you. I think it's fair to say, Alex, that we have a very active program of engagement with our firms. Within St. James's Place, and we will continue to have very active program.

Speaker #1: We have a number of consultation groups where we consult with partners and advisors on various matters. Before we decide on them. So we're trying to do as much as possible with the partnership rather than to the partnership.

Speaker #1: And ensuring that what we do lands well is clearly understood. And is really focusing on the things that matter to the partnership. So we have a very active line of dialogue always have.

Speaker #1: And I expect we always will, because it's our USP. And you look after, you protect, and you polish your USP. So we're very, very focused on that piece.

Speaker #1: In terms of size of folk coming in, we have and have had practices of all different shapes and sizes coming in, etc., along the way.

Speaker #1: Our existing firms are growing. We have a good smattering of firms that are very large, some that are medium-sized, and a lot that are in the smaller element, etc.

Speaker #1: They all share one thing in common, which is focus on client and through that, a real element of growth into the opportunity that's there.

Speaker #1: So there isn't a particular size or cut that we are that we are looking for. If somebody is excited by the culture, the environment, the community, that we create here, that we think is very, very different.

Speaker #1: Then they're very welcome to join us and would love to have them.

Speaker #4: Thank you.

Speaker #3: Thank you. And our next question comes from Charles Bennett with Rothschild.

Speaker #6: Hi, Mark. Hi, Caroline. Thanks for taking my questions.

Speaker #1: Hi, Joss.

Speaker #7: Hi.

Speaker #6: 2023 to 2030.

Speaker #1: Sorry, Charles, would you mind starting that again? We missed the beginning of your question, Charles.

Speaker #6: Of course. Don't worry. So the first question is, you reiterated confidence in doubling adjusted profits. From '23 to 2030, what markets and net flow assumptions from here are now embedded in that doubling assumption?

Speaker #6: And do you expect to revise that profit target up or down as we get closer to 2030? Or are you going to manage the business so that that's roughly where you end up?

Speaker #6: Second question, you talked earlier in this call about your growth algorithm having two drivers, productivity and advisor growth. Where do you see that second driver trending over the medium-term noting that it's been a period of relatively slower advisor headcount growth versus history in the last few years?

Speaker #6: Just keen to understand where you'd like that to settle, long-term, and whether the academy and the advisor headcount movement in the industry more broadly can support that long-term rate.

Speaker #6: And then thirdly, I think you've talked in the past about SS and C as being one of the expenses on fund. Can you quantify it in terms of basis points on fund?

Speaker #6: Just trying to deconstruct the new simplified expense on fund margin into advisor fees, third-party fund fees, and then other ongoing costs like SS and C.

Speaker #6: Thanks.

Speaker #1: Okay. All right. Why don't I deal with the second element in terms of the growth algorithm question, and then ask Caroline to pick up the first and the third.

Speaker #1: Yeah? So in terms of the growth algorithm, as you said, I mentioned productivity being very, very important, and advisor growth also being very important.

Speaker #1: And we said last year, that actually advisor growth in the short term would slow down as we went through an element of looking at some of the partners where productivity was particularly low, and looking to see what we could do to try and support an increase in terms of activity.

Speaker #1: Which led to some partners leaving, and that trickles through in terms of some of the numbers from last year, and a little bit of this year.

Speaker #1: I would expect advisor growth to increase to low single-digit growth going forward. I do think that the industry as a whole has been in terms of advisor numbers growing at less than 1% for quite some time, and therefore the academy is going to have to do the lion's share, the heavy lifting, on that.

Speaker #1: Because we've been doing the academy for the last 10 plus years, we know what it takes we know what's required. We have a great pipeline of recruiters.

Speaker #1: We know the type of people we're looking for. And we think the market's actually very attractive for people to come in and join us.

Speaker #1: Through the element of the academy. So advisor growth, we think, will be real and meaningful. And we think the productivity will also be a very, very important lever for us to pull.

Speaker #1: And we are focused on both. And we're looking to grow both productivity and advisor growth from 2027 onwards. Caroline, in terms of the doubling?

Speaker #7: Yeah. So the doubling, yeah. I mean, look, that's our ambition rather than a specific formal guidance. We're staying with that. We've set that in 2024 when the world was a challenging place to get people to look out further.

Speaker #7: We're not necessarily going to retrade that right now. And obviously, we guide every year. I mean, the assumptions around that are sort of mid to high single-digit increases in fund every year.

Speaker #7: More markets type thing. We are I would absolutely say, as I did with those, it's not a cap. Definitely not a cap. On our ambition.

Speaker #7: So we will obviously guide every year as we go towards that. On the actual income or expenses on fund, when we did our new simplification of reporting, we had a lot of debates about how we should do this.

Speaker #7: And really, with the simplicity, we don't give that breakdown. We find that both income and expenses obviously vary with things like daily fund levels, but we pay out such as obviously other than the margin, we pay out significant amounts of that so that we're just not we're not having that we're not giving that amount of granularity.

Speaker #1: Yeah. Charles, just to reinforce what Caroline has said, we wouldn't see the ambition as a cap on interest. I'm not going to manage this business and curtail growth.

Speaker #1: We're going to grab every piece of growth that we sensibly can that is quality growth, because the opportunity is so huge out there. UK advice on average, 9% of folk take advice.

Speaker #1: In the US, it's something like 27%. So the UK market should be able to grow at least 2 to 3 times. And therefore, the growth opportunity for us is huge.

Speaker #1: And we're going to look to prosecute that as best we possibly can.

Speaker #6: Thanks so much.

Speaker #1: Thanks, Charles.

Speaker #2: Thank you. And that was our final question. So I will hand back over to you, Mark, for any final comments.

Speaker #1: Oh, okay. Thank you for your time today, everyone. And questions. As I said at the outset, we're very pleased with the progress we've made in the first half, both in terms of performance and in terms of operational execution.

Speaker #1: And we think that with strong foundations, continued investment in our client and advisor proposition, and a clear strategic direction, we remain very confident in the opportunities ahead.

Half Year 2026 St James's Place PLC Earnings Call - Q&A

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