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New Business & Financial Results - 2013

Learn about St. James's Place, a leading UK wealth management company with a differentiated business model and global investment management expertise. Explore our financial results, business strategy, partnership model, and investment approach.

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New Business & Financial Results - 2013

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  1. New Business & Financial Results - 2013

  2. PART ONE – Business Model • Strategy 2 • The Partnership 12 • The Academy 17 • Investment Management 19 • Our Clients 31 • Our Market 37 • Cash & Dividend Profile 67 • Our Shareholders 76 • Analysts following 78 PART TWO – Financial Results

  3. PART ONE Business Model

  4. Strategy

  5. St. James’s Place: Overview • Leading UK Wealth Management Company • Established 1991 • UK listed with market cap of c. £4 billion • £44.3 billion in FUM • Target market £50k to £5 million free investable assets • Differentiated business model • Provider and distributor • Own dedicated distribution – the Partnership • Distinct investment management approach • Well positioned to benefit from long-term market growth • Favourable demographic trend • Increasing tax burden

  6. Global Investment Management Expertise

  7. Whole of Market approachWe take responsibility for the due diligence on all the products and companies we make available to our clients.

  8. Our products and services • Comprehensive range • of pension, investment and savings “wrappers” • of investment funds managed by global investment managers • access to “whole of market” for third party products and services e.g. protection and annuities • Whilst avoiding • capital intensive products • guarantees and options • overly complex, fashionable or high risk structures

  9. The Growth Model Target: 15-20% pa NEW BUSINESS PRODUCTIVITY New business per Partner CAPACITY Number of Partners

  10. Growing number of Partners +9.5% +8% +6% 1,958 +6% +9%

  11. Productivity (single investment per Partner) +12% +5% +3% +28% 3.83 +2%

  12. Single premium gross investments

  13. Funds under management22 % p.a. compound growth over the last 5 years and 19% p.a. over last 10 years +27% 44.3 +22% +6% +26% +31% +18% -10% +25% +29% +20%

  14. The Partnership

  15. Dedicated distribution – the Partnership • High quality self-employed team of c.2000 advisers • Average age is 48 • Above average productivity • 90%+ per annum retention rate • Aim to grow Partner number by 5% to 7% per annum • Aim to increase productivity each year

  16. Geographic distribution31 December 2013

  17. Partners by age band31 December 2013 Existing Partners New Partners 65+ 0% 55-65 8% 65+ 2% <35 6% <35 20% 55-65 19% 45-55 26% 35-45 31% 45-55 42% 35-45 46%

  18. Total adviser numbers down 18%

  19. The Academy • 60 new students in 2013 • 40 next generation • Targeting another 50-60 this year • Anticipate c.50 to ‘graduate’ this year • Plus a new regional initiative in Manchester

  20. Investment Management

  21. Our approach to investment management ‘INDEPENDENT EXPERTISE’ THE INVESTMENT COMMITTEE Sarah Win Vivian Peter Bazalgette Bates Dunscombe Robbins ‘MANAGES THE MANAGERS’ Decisions: Change firm? Change manager? No change? Appoint the Fund Managers Set performance objectives Risk management and strategy

  22. Stamford Associates Independent Investment Consultancy Research Fund Manager Market Monitor Managers and Portfolios Advise Investment Committee Access to Whole Market Qualitative and Quantitative Focus on Future Outperformance Analyse & identify talented managers Gather intelligence Number crunching Monitor activity Behavioural psychology Workplace analysis Recommend: Potential changes New managers

  23. Global Investment Management Expertise

  24. Growth Portfolios

  25. Growth Portfolios (cont.)

  26. Income Portfolios

  27. Funds under management22 % p.a. compound growth over the last 5 years and 19% p.a. over last 10 years +27% 44.3 +22% +6% +26% +31% +18% -10% +25% +29% +20%

  28. Weighted 5-year Rolling Performanceto 31 December 2013 (excluding Money Market & Alternative Assets) Above peer group average Below peer group average Past performance is not indicative of future performance. The value of an investment with St. James’s Place can fall as well as rise. You may get back less than the amount invested.

  29. Weighted 10-year Rolling Performanceto 31 December 2013 (excluding Money Market & Alternative Assets) Above peer group average Below peer group average Past performance is not indicative of future performance. The value of an investment with St. James’s Place can fall as well as rise. You may get back less than the amount invested.

  30. Funds Under Management: shown by Asset Class and Region31 December 2013 Property 2% Alternatives 3% PABs / FABs 2% Cash & Other Assets 10% UK 30% European 11% US 19% Fixed Interest 14% Far East 9%

  31. Benefits of investment management approach • No in-house managers, so no conflict of interest • Benefit from Investment Committee experience & expertise • Ability to appoint the best fund managers with wholesale purchasing power • Continuous monitoring plus quarterly reviews • Easy to change manager – reduced churn • Free switching for clients • Significantly improved retention of funds

  32. Our Clients

  33. Geographic distribution of our clients31 December 2013 420,000 clients Male 53% Female 47% Average age 53

  34. Clients and FUM Clients by value band31 December 2013 All clients All clients - FUM £250k-£500k 7% £500k-£1m 2% £500k-£1m 16% £1m+ 1% £1m+ 16% <£50k9% £50k- £250k 36% £250k-£500k 21% <£50k54% £50k- £250k 38%

  35. New and retained clients by age band 31 December 2013 Existing clients by age band New clients by age band <30 3% 70+ 14% <30 8% 70+ 18% 30-40 9% 30-40 10% 65-70 12% 65-70 10% 40-50 26% 60-65 12% 60-65 10% 40-50 19% 50-55 13% 55-60 11% 55-60 12% 50-55 13%

  36. What our clients think The key findings were: • 84%* of clients highly satisfied with their relationship with St. James’s Place – nearly a third scoring us 10 out of 10 • 88%** of clients ‘value’ a face-to-face relationship with their Partner • 86%* of clients agreed that we provide excellent service • 80%* of clients highly satisfied in the way in which we communicate with them • 96%** of clients were likely to recommend St. James’s Place to others • 81%* of clients would invest with St. James’s Place again if making that decision today * Scoring 8 or more out of 10. Ledbury Research – November/December 2013 ** Wealth Account Survey, January 2014

  37. Award winning into 2014

  38. Our Market

  39. Our market • The market is big • Favourable demographics • The tax burden is increasing • UK high net worth individuals want face-to-face advice • Limited access to advice as adviser numbers have reduced

  40. Total adviser numbers down 18%

  41. The SJP MarketplaceUK individuals with between £50k and £5m of liquid assets Source: Datamonitor, 23 January 2014

  42. The SJP MarketplaceAmount of liquid assets held by UK individuals with between £50k and £5m Source: Datamonitor, 23 January 2014

  43. UK Funds under managementFunds £billion Property £142 Private Equity £112 Hedge £217 Private Clients £483 Corporate Pensions £1,597 Retail Clients £760 Insurance Companies £994 The City UK Fund Management report 2012 – figures relate to 31 December 2011. Insurance & Corporate Pensions relate to institutional clients.

  44. Private Asset & Wealth ManagersTop 10 and selected others *31/12/2013 Source: 2013 PAM Directory

  45. Asia The Opportunity • Singapore, Hong Kong and Shanghai • Henley Group has 50 advisers with 4,000 clients and £430 million FUM • Estimated 120,000 UK ex-pats with £12 billion of investible wealth (£100k each) • Project to grow to over £20 billion by 2020 • Our investment proposition and relationship based approach is well suited to this market

  46. Partner Survey 2013 – Source of new business/markets • 81% existing clients and referrals • 7% introducers • 12% new clients from other sources • 27% of Partners experienced less competition in 2013 • 39% acquired new clients due to decline of high street advice (banks)

  47. The SJP Opportunity • ISAs • Cash • Stocks & shares • Building Society (Mutual Lender) deposits • National Savings and Investment (NS&I) deposits • Bank deposits • Mutual funds £220 bn (Sept 2013 – HMRC) £223 bn (Sept 2013 – HMRC) £258 bn (Nov 2013 – Building Societies Association) £105 bn (Nov 2013 – Building Societies Association) £864 bn (Nov 2013 – Building Societies Association) £763 bn (Nov 2013 – IMA)

  48. The advice market – transparent? The fees a client may have to consider when trying to compare advice and products based on publicly available information for a variety of firms and providers.

  49. Advisory/Discretionary Charge Comparison Total Investment £85k UT/ISA £35k Pension £50k Source: Numis

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