Shares of FTSE 100-listed wealth manager St. James’s Place PLC (GB:STJ) fell today as the company reported reduced net inflows for the full year 2023. Elevated interest rates and macro uncertainty impacted the company’s business. Shares fell over 4% in Thursday’s trading.
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St. James’s Place is an investment management company offering services like wealth management, retirement planning, financial planning, and advisory services.
Net Inflows Shrink Despite Record Funds
Net inflows of St. James’s Place reduced by nearly half to £5.12 billion in 2023 compared to £9.78 billion reported in 2021. It also landed below the analysts’ consensus forecast of £5.3 billion. On the other hand, closing funds under management grew to £168.2 billion from £148.4 billion a year ago.
The company’s advisory services witnessed robust demand, but the demand for long-term investment products remained weak. During the year, SJP advisers secured £3.7 billion in new client investments.
The Share Price Saga
In the last 12 months, STJ shares have declined over 45%, as higher interest rates and volatile markets hurt investors’ enthusiasm for managed funds. Additionally, the stock was hit hard in the second half of 2023 by the company’s decision to reduce its product fees in response to regulatory pressures.
In 2023, the company faced allegations of unfair charges and a complex fee structure. To comply with regulations aimed at safeguarding customers, the company chose to decrease its fees, affecting its overall profitability.
Is St. James’s Place a Buy?
On TipRanks, STJ stock has received a Strong Buy consensus rating based on four Buys and one Hold recommendation. The St. James’s Place share price target is 889.60p, which implies an upside potential of 35.9% from the current trading levels.
