St. James's Place Plc · LSE:STJ
St. James's Place — Investor Presentation (October 2016)
86 slides from St. James's Place's investor presentation, Oct 31, 2016
Slide 1: Capital Markets Briefing
CAPITAL MARKETS BRIEFING 31st OCTOBER 2016
Slide 2: Gross Inflows by quarter
Gross Inflows by quarter 2013 2014 2015 2016 2.8 2.8 2.4 2.5 2.3 2.3 2.1 2.0 2.1 1.9 1.9 1.9 1.6 1.7 1.6 Q1 Q2 Q3 Q4 2013 over 2012 +28% +22% +27% +11% 2014 over 2013 +15% +17% +19% +12% 2015 over 2014 +12% +17% +20% +20% 2016 over 2015 +16% +23% +21%
Slide 3: Net Inflows by quarter
Net Inflows by quarter 2013 2014 2015 2016 1.71 1.66 1.63 1.48 1.32 1.36 1.35 1.39 1.19 1.25 1.26 1.19 1.03 1.05 0.9 Q1 Q2 Q3 Q4 2013 over 2012 +29% +26% +41% +9% 2014 over 2013 +26% +20% +23% +14% 2015 over 2014 +9% +14% +17% +17% 2016 over 2015 +3% +25% +12%
Slide 4: Gross Inflows YTD – up 20% at £8.1bn
Gross Inflows YTD – up 20% at £8.1bn £10bn +17% +16% +20% £8bn +21% £6bn +9% +9% +35% £4bn £2bn £0bn 2010 2011 2012 2013 2014 2015 2016 Sept
Slide 5: Net Inflows YTD – up 14% at £4.73bn
Net Inflows YTD – up 14% at £4.73bn £6bn +14% +20% +14% +28% £4bn +4% +10% +30% +31% +34% -11% £2bn £0bn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sept
Slide 6: Funds under management
Funds under management 22%p.a. compound growth over the last 5 years and 17%p.a. over 10 years (at September 2016) £80bn +22% +13% 71.4 £60bn +17% +27% £40bn +22% +26% +6% +18% +31% £20bn +25% -10% £0bn 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sept
Slide 7: People Culture IMA
People Academy Admin Platform & Culture Recruitment Clients IMA Asia / Middle East & Products & Services Value Marketplace Partnership Opportunities Cash-flow & & Capital Management Risks & Regulatory & Dividends Environment Threats Development
Slide 8: People Culture IMA
People Academy Admin Platform & Culture Recruitment Clients IMA Asia / Middle East & Products & Services Value Marketplace Partnership Opportunities Cash-flow & & Capital Management Risks & Regulatory & Dividends Environment Threats Development
Slide 9: Tony Dunk
TONY DUNK Investor Relations Director
Slide 10: St. James's Place Wealth Management
ST. JAMES'S PLACE WEALTH MANAGEMENT ||. ROTHSCHILD ASSURANCE
Slide 11: St. James's Place Wealth Management
= ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 12: Gross inflows
Gross inflows £10bn £8bn £6bn £4bn -9% £2bn £0bn 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sept
Slide 13: A People Business
A PEOPLE BUSINESS EMOTIONAL VS ARTIFICIAL
Slide 14: St. James's Place Wealth Management
= ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 15: The price is what you pay…value is what you receive
“The price is what you pay…value is what you receive”
Slide 16: St. James's Place Wealth Management
= ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 17: Clients who lack time, confidence or knowledge for financial decisions
Don’t have the time inclination, confidence or knowledge to make their own financial decisions
Slide 18: Pension freedom, Brexit – Property funds
• Pension freedom • Brexit – Property funds
Slide 19: Retention of clients' funds during 2008
Year Ended Year Ended 31 December 2008 31 December 2007 £’billion £’billion “WE WERE PARTICULARLY PLEASED Opening funds under 18.2 15.4 TO RETAIN 95% OF CLIENTS’ management EXISTING FUNDS DURING 2008. New money invested 3.0 3.1 RETENTION OF FUNDS UNDER Investment return (3.6) 0.9 MANAGEMENT IS NOT O
Slide 20: Client wealth account survey
Client wealth account survey Do you feel the St. James’s Place proposition provides value for money? Excellent Good Poor Reasonable
Slide 21: Things our clients value
Things our clients value • Working with someone they trust • Dealing with complexity • Taking away the worry • Having a plan – managing the risks • Getting things done • Dealing with life’s uncertainties • Peace of mind
Slide 22: What's important about SJP
What’s important about SJP • Highly respected • ‘Big’ – FTSE100 • £71 billion of client funds under management • Resources to do vital things well • Suitability of advice guaranteed • Access to advice throughout the UK (and now Asia)
Slide 23: Geographic Distribution
Geographic Distribution Partners Clients 6% 5% 2% 2% 23% 24% 12% 14% 4% 4% 3% 4% 21% 22% 10% 9% Overseas Clients: 2% Overseas Partners: 3% 17% 13% 19
Slide 24: What's important about SJP
What’s important about SJP • Highly respected • ‘Big’ – FTSE100 • £71 billion of client funds under management • Resources to do vital things well • Suitability of advice guaranteed • Access to advice throughout the UK (and now Asia) • Partner succession • Technical expertise
Slide 25: Global Investment Management Expertise
Global Investment Management Expertise
Slide 26: Benefits of investment management approach
Benefits of investment management approach • Above average investment returns (net of charges)
Slide 27: Annualised 3 year performance
Annualised 3 year performance St James’s Place Portfolio vs ARC Private Client Investment peer groups St. James's Place ARC PCI Peer Group Average 10% 8% 9.1 7.8 6% 6.8 7.1 6.4 6.3 6.4 6.4 6.3 6.4 5.8 5.3 5.3 4% 3.5 3.7 3.7 2% 0% Defensive Conservative Balanced Managed Adventurous Immediate Balanced
Slide 28: Benefits of investment management approach
Benefits of investment management approach • Above average investment returns (net of charges) • Exclusive funds and top fund managers • Rigorous selection and ongoing monitoring • Lower investment management fees • Seamless change
Slide 29: St. James's Place Wealth Management
= ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 30: Client wealth account survey
Client wealth account survey Knowing everything you know of the St. James’s Place proposition, would you recommend it to others? Yes I would, and have already done so Yes, but I 58% have yet to do so 37% No 5%
Slide 31: St. James's Place Wealth Management
ST. JAMES'S PLACE WEALTH MANAGEMENT
Slide 32: Tony Wickenden
TONY WICKENDEN Technical Connection
Slide 33: Tax alpha
Tax alpha Investment Tax Optimised Client Performance Optimisation Outcomes
Slide 34: Tax alpha
Tax alpha Aggressive tax avoidance Acceptable tax planning and tax structuring
Slide 35: So where does this leave us?
So where does this leave us? BORING IS THE NEW EXCITING
Slide 36: The boring list…
The boring list… • Pensions • ISAs • Collectives • Bonds • BPR Schemes • VCT /EIS • Gift trusts /Loan Trusts /DGTs • Life Insurance • You get the picture ?
Slide 37: Comparison grid
Comparison grid INVESTMENT / ACCUMULATION PERIOD WITHDRAWAL Diversified Tax relief Investor Tax on Tax on IHT Tax on Tax on IHT on Other tax on spread of on access income Capital income Capital Gains death death underlying investment Gains investments possible REGISTERED YES YES YES NO NO NO YES NO
Slide 38: 1996 – 2016 – Timeline of industry events
1996 – 2016 – Timeline of industry events Barclays Intro: Married CGT Extension of launches Bank of dividend couples The DOTAS regime; Whole reforms: DOTAS to Intro: Web ETFs, England given allowance for rebrands to allowance Sandler Report special income / sale reform of entrepreneurs IHT GAAR and
Slide 39: …..And there's no let up in sight
…..And there’s no let up in sight 2016/17 • Personal Savings Allowance • CGT change • Dividend tax change • Residence nil rate band: downsizing provisions …..And consultations including • Domicile • Investment bond taxation • Salary Sacrifice • Disguised remuneration • Personal Portfolio Bonds
Slide 40: Helping our clients to make hard choices
Helping our clients to make hard choices • Where to invest company or personal money when caught by the annual or lifetime allowance • How and when to take money from your pension investments • Whether and how to “wrap” your lump sum investments
Slide 41: Helping our clients to make hard choices
Helping our clients to make hard choices • How best to effect employer paid life cover to minimise net cost? • How to invest tax effectively for children while retaining control? • Which estate planning solution can deliver IHT efficiency with investor control (and access)?
Slide 42: Tax alpha delivered
Tax alpha delivered £100 Get it wrong Get it right £60 £100 +66%
Slide 43: Our team supporting Partners: Technical Connection Division
OUR TEAM SUPPORTING PARTNERS Technical Connection Division
Slide 44: TCD key suppliers
TCD key suppliers P Confidence C T Knowledge A L R Creativity I C Know how T E N Credibility Pro activity (ideas) N D E T R Clarity Availability S S £ • Complex * Financially detrimental if you “get it wrong” • Consequences * ** Readily “self service” answers • Can’t **
Slide 45: What do we deliver?
What do we deliver? Answers to questions P T Access to knowledge A R T Business class CPD N C Consultations E R S Business Generation H D PQ Support I P
Slide 46: The Value delivered by technical excellence
The Value delivered by technical excellence • Excellent client outcomes • Reduced risk • Increased productivity/profit • Partner attraction/retention
Slide 47: Jonathan McMahon
JONATHAN MCMAHON Joint Chief Operating Officer
Slide 48: Overview
Overview • Our community – Employee engagement – Apprentices and Graduates • Our work in our communities – The Foundation – Corporate Social Responsibility
Slide 49: The SJP community
The SJP community • Number of Practices – 2,320 • Number of Advisers – 3,259 • Number of Partner Support Staff – 4,645 • Number of Employees – 1,472 • Number of Employees in our key third party providers – 1,608
Slide 50: The SJP employee community
The SJP employee community • 21 Locations in UK and 3 in Asia • Supporting advisers in these areas: – Client Services & Administration – Legal – Marketing – Risk & Compliance – Tax & Trust etc. – Technology – Training & Development • Average age of employees – 41.8 • Average length of service of emp
Slide 51: Physical investment in our premises
Physical investment in our premises
Slide 52: 2016 survey headlines
2016 survey headlines EMPLOYEE ENGAGEMENT INDEX 86% -1 vs. 2014 Some key scores 53. I feel proud of the work SJP does to help others through the SJP Foundation % positive 96% 4. I understand how my work contributes to the success of the organisation 94% 45. I believe the fair treatment of clients is
Slide 53: Vs. financial services benchmark
Vs. financial services benchmark 0 31 questions Questions most above Benchmark % Vs. positive benchmark were comparable 13 62. I would recommend SJP as a great place to work 88% +21 63. I feel a strong sense of belonging to SJP. 83% +17 19 37. I am satisfied with the total benefits package 93% +17 6
Slide 54: Vs. Financial services benchmark
Vs. Financial services benchmark EMPLOYEE Sustaining high levels of engagement can be a challenge and 86% although questions in the engagement index all perform above ENGAGEMENT the Financial Service benchmark there has been a declining INDEX trend since 2014. Diff vs. 2014 Diff. vs. Diff. vs. Finan
Slide 55: Graduate and Apprenticeship schemes at SJP
Graduate and Apprenticeship schemes at SJP Graduates • Started in September 2014 with 3 year rotational programme - six 6-month placements across SJP • 15 rotational graduates on programme. 12 more planned for 2017 • 100% retention to date Apprentices • Started in September 2012 with 5 apprentices.
Slide 56: Higher education partnerships
Higher education partnerships Loughborough University • Tailored MSc in Wealth Management – now in its third year. First intake complete and graduate in 2017 • Leadership programmes • Some bespoke training with the Field University of Gloucestershire • Paraplanning apprenticeship higher-level progra
Slide 57: Corporate social responsibility
Corporate social responsibility Our Approach to Corporate Social Responsibility • We understand that responsible management is important to all our stakeholders – shareholders, clients, Partners, suppliers and the communities we operate in • St. James’s Place is committed to growing our business in
Slide 58: Corporate social responsibility
Corporate social responsibility Our Approach to Corporate Social Responsibility • We understand that responsible management is important to all our stakeholders – shareholders, clients Partners, supplies and the communities we operate in • St. James’s Place is committed to growing our business in a
Slide 59: Corporate social responsibility
Corporate social responsibility Strategic approach • Focused long-term partnerships • Local to SJP offices • Supporting people in need • Promote staff skills based engagement
Slide 60: Corporate social responsibility
Corporate social responsibility Four core deliverables • Employability and Financial Awareness • Local charity partnership • Individual & team community support • Input, output & impact measurement and benchmarking
Slide 61: Corporate social responsibility
Corporate social responsibility Financial Education • Y9 & 6th form, non-branded, non-sales, free to schools and SJP staff led • 15 sessions delivered YTD: in 11 different schools and 2 charities, 1196 students with 85 SJP staff delivering • Year total expected to be over 3000 students with 190 staf
Slide 62: CSR measures
CSR measures Key public CSR measures we We also subscribe or adhere to report into are: these CSR standards: • FTSE4Good • The Living Wage Foundation • Business in the Community • The Prompt Payment Code • London Benchmarking Group • Carbon Disclosure Project • Energy Savings Opportunity Scheme • Ca
Slide 63: St. James's Place Foundation
St. James’s Place Foundation • Formed in 1992 it is a grant making charity ‘with a difference’ with all funds raised and donated by the SJP community (including £ for £ matching) • All expenses related to the Foundation are covered by the Company • The majority of our support is focused on children
Slide 64: St. James's Place Foundation
St. James’s Place Foundation • Over £51 million raised and donated since 1992. A total of £5 million raised year to date (July) against a full year target of £7.5 million • Currently 89% of Partners & employees give generously each month to a total of £1.3 million per year
Slide 65: St. James's Place Foundation
St. James’s Place Foundation An example of Giving Effectively… • Is the Foundation’s ‘Sport for Good’ Project (launched in 2012 and is ongoing) • Over £2.4 million donated to 7 charities, operating across the UK, over the last five years • Charities helping young people under the age of 25 and split
Slide 66: St. James's Place Foundation
St. James’s Place Foundation • Just some of our Major Grants…
Slide 67: St. James's Place Foundation: An engaged community
St. James’s Place Foundation An engaged community
Slide 68: Summary
Summary • An engaged community • Significant investments being made for the future • Corporate Social Responsibility as part of business as usual • The Foundation - part of who we are and what we do • Doing these (and other) things helps to maintain and develop our culture • Maintaining our culture
Slide 69: Ian Gascoigne
IAN GASCOIGNE Managing Director
Slide 70: Strategic context – the growth model
Strategic context – the growth model NEW BUSINESS CAPACITY PRODUCTIVITY Number of Advisers New Business per Adviser
Slide 71: Number of Partners x Average Productivity = New Business
Number of Partners x Average Productivity = New Business 71
Slide 72: St. James's Place Wealth Management
ST. JAMES'S PLACE WEALTH MANAGEMENT PARTNER a —_
Slide 73: Number of Multi-Member Practices
Number of Multi-Member Practices 480 183 2006 2016
Slide 74: Sole Trader Business
Sole Trader Business Partner PA PA Paraplanner
Slide 75: Sole Trader Productivity
Sole Trader Productivity by length of Service £5m £4m £3m £2m £1m £0m Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+ Gross inflows p.a.
Slide 76: A Multi-Member Practice
A Multi-Member Practice Partner Adviser Adviser PA PA Paraplanner
Slide 77: A Large Multi-Member Practice
A Large Multi-Member Practice Practice Principal Practice Manager Adviser Adviser Adviser Adviser Adviser Paraplanner Paraplanner PA PA
Slide 78: Sole Trader Productivity
Sole Trader Productivity by length of Service £5m £4m £3m £2m £1m £0m Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+ Gross inflows p.a.
Slide 79: Partner Productivity
Partner Productivity by length of Service £7m £6m £5m £4m £3m £2m £1m £0m Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6-10 Yrs11+ Gross inflows p.a.
Slide 80: Average Age by Partner Type
Average Age by Partner Type 50 49 40 45 41 40 30 29 20 10 0 Partners Advisers Academy Graduates Academy Students Next Generation Academy
Slide 81: Productivity
Productivity By recruitment vintage £6m £5m £4m £3m £2m £1m £0m Original Academy Academy 2014 Academy 2015 Advisers 2013 Gross inflows p.a. Sole Traders Graduates Advisers
Slide 82: Productivity
Productivity Gross Inflows per Partner Practice £5m +9% +9% £4m +11% +6% +26% +3% +1% £3m £2m £1m £0m 2010 2011 2012 2013 2014 2015 2016 June Gross inflows p.a.
Slide 83: Productivity
Productivity Average Gross Inflows £4m +6% +5% £3m +9% +4% +26% +3% +0% £2m £1m £0m 2010 2011 2012 2013 2014 2015 2016 June Gross inflows p.a.
Slide 84: St. James's Place Wealth Management
ST. JAMES’S PLACE WEALTH MANAGEMENT
Slide 85: Strategic context – The growth model
Strategic context – The growth model NEW BUSINESS CAPACITY PRODUCTIVITY NUMBER OF PARTNERS NEW BUSINESS PER PARTNER Personal development Experienced recruitment Broadening investment portfolio Asia SJP Money Management Academy Discretionary Fund Management Next Generation Technical Connection Discre
Slide 86: Summary
Summary • Continuing strong performance • Combining value added advice with excellent investment returns • Committing to CSR and maintaining our culture • Creating a platform for sustainable growth
St. James's Place — Investor Presentation (October 2016) on 6ix