St. James's Place Plc · LSE:STJ
St. James's Place — FY2022 Earnings Presentation
49 slides from St. James's Place's earnings presentation, Feb 28, 2023
Slide 1: Investor Pack
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Slide 2: Contents
Contents Overview: Our business Our new Our financial Appendix Business in detail business performance model and performance strategy 2
Slide 3: Overview: business model and strategy
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Slide 4: St. James's Place overview
St. James's Place overview We’re a leading UK financial We’ve got a differentiated We’re well positioned to advice business advice-led business model benefit from long-term Established 1991 Providing holistic financial market growth Listed in the UK and part of planning and wealth Favourable demogra
Slide 5: The market opportunity: rising retail wealth
The market opportunity: rising retail wealth UK aggregate wealth by age cohort 30% 13.1 million 28% 25% 24% ‘mass affluent’ 20% and high net worth 20% individuals… 15% …controlling £2.6tn of liquid assets 10% 10% 10% Source: GlobalData 5% 4% 3% 1% 0% 16 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 7
Slide 6: The value of advice
The value of advice Financial Investment Client net planning returns outcomes Trusted personal relationship 6
Slide 7: The market opportunity: rising demand for advice
The market opportunity: rising demand for advice Flexibility + Tax complexity Intergenerational complexity via ‘pension wealth freedom’ transfer Perfect environment for client-focused Decline of Growing UK advice business DB pensions savings gap 7
Slide 8: The market opportunity: undersupply of advice
The market opportunity: undersupply of advice 45,000 Number of retail investment advisers The UK advice gap is large Source: ONS 27,651 40,000 25,616 13.1 million UK mass affluent 35,000 27,839 27,557 27,501 26,677 23,787 25,951 25,611 individuals controlling £2.6 trillion 21,684 30,000 21,881 21,49
Slide 9: Our business model
Our business model Benefits Advice Our clients: an end-to-end, connected proposition focused on great long-term outcomes Platform & Vertical Administration Our Partnership: superior support integration to build a great business over the long-term Investments Our shareholders: long-term, sustainable
Slide 10: Our 2025 strategy
Our 2025 strategy Where we’re going Our vision Our 2025 goals ‘To support the UK's leading Financial c.10% 95% Significant annual growth in annual retention growth in cash Advisers with the best gross inflows of client FUM* result and technology, best shareholder operations and best proposition for
Slide 11: Our business priorities
Our business priorities Delivering value Our culture and Building to advisers and clients community being a leading through our investment responsible proposition business Building and Being easier protecting Continued to do business our brand and financial strength with reputation 11
Slide 12: Our business in detail
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Slide 13: The Partnership: fundamental to our business model
The Partnership: fundamental to our business model Clients 917,000+ Supporting clients The Partnership Building great 2,608 4,693 Financial businesses Partner businesses advisers Proposition £148 billion FUM Tech 13
Slide 14: The Partnership: why do advisers join and stay with SJP?
The Partnership: why do advisers join and stay with SJP? Strong Great client Strong products outcomes commercial and proposition Attraction and relationship retention Flexible business Comprehensive development corporate support 14
Slide 15: The Partnership: sustaining long-term growth
The Partnership: sustaining long-term growth Strong adviser retention A sustainable Value of long-term Mix of Academy pipeline for Partnerships and recruitment growth in the channels Partnership Average age 46 (lower than market) 15
Slide 16: The Partnership: securing tomorrow through our Academy
The Partnership: securing tomorrow through our Academy 35 1,064 25% 65% 350+ 14%+ 57% Average age Partners and Female Partners from non- new advisers of new client referred advisers and advisers financial in training at investments by the delivered backgrounds end-2022 in 2022 Partnership 16
Slide 17: The Partnership: advisers by age band
The Partnership: advisers by age band Existing advisers New advisers 4% 7% 1% 17% <35 <35 21% 21% 35-45 35-45 44% 45-55 45-55 55-65 55-65 65+ 65+ 26% 32% 27% 17
Slide 18: The Partnership: driving productivity
The Partnership: driving productivity Targeted growth and development support Great client outcomes drive Business strong productivity consultancy c.40% of new business Coaching and through referrals and leadership introductions development 18
Slide 19: The Partnership: investing in our future
The Partnership: investing in our future New and Utilisation of improved Partner lending to systems support business and tech development Targeted, data-led More shared field management servicing team support of clients 19
Slide 20: Our clients: snapshot
Our clients: snapshot 917,000+ 56 3% 5% Clients Average age Overseas clients 1% 53%/47% No ‘typical’ client - all want trusted, personal advice 13% Male/female split 3% 4% 15% 15% 25% 10% Geographic distribution of client FUM as at 31 December 2022 20
Slide 21: Our clients: by age band
Our clients: by age band Existing clients New clients 7% 7% 15% 25% 6% <30 <30 18% 30-40 30-40 13% 40-50 40-50 14% 50-60 50-60 60-70 60-70 70+ 70+ 23% 26% 19% 27% 21
Slide 22: Our investment proposition
Our investment proposition 17 Funds where at least 50% of the strategy is exclusive to St. James’s Place clients. 25 713 Investment Funds manager Committee meetings monitoring meetings held during 2022. conducted in 2021. £148 billion Invested around the world. 12,000+ Net-zero Different Committed t
Slide 23: Our investment proposition: recipe for success
Our investment proposition: recipe for success People & Team Our recipe Investment Data, Tech for long-term beliefs & Insights performance Investor Governance 23
Slide 24: Our investment proposition: our seven beliefs
Our investment proposition: our seven beliefs 1. Great client 2. Asset 3. Diversification 4. Active outcomes collection management 5. Understand 6. Disciplined 7. Responsible the risk research investment 24
Slide 25: Responsible Business Framework
Responsible Business Enable financial wellbeing for our clients, our people and our Framework communities Financial wellbeing Lead the conversation on investing responsibly Vision Purpose Culture Investing Climate responsibly change Take action on climate change Strategic enablers Community People G
Slide 26: Leading the conversation on investing responsibly
Leading the conversation on investing responsibly Responsible investment as standard − All our managers are UN PRI signatories − RI key to selection and monitoring process across all funds and strategies − Focus on stewardship and engagement Tailored and bespoke RI solutions also available for clien
Slide 27: Technology at SJP
Technology at SJP Bluedoor Enabling scalability and Delivering efficiency within SJP Scalability growth Next Generation Salesforce Client Experience (NGCX) Hyper-personalised service Efficiency Resilience delivery and efficiency Data &AI Reduce Reduce Leading to a data and AI complexity operational
Slide 28: Our new business
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Slide 29: The Partnership
The Partnership 5,000 The Partnership grew 3% 4,500 in 2022 to 4,693 advisers 4,000 Strong pipeline for Academy enrolment 3,500 and experienced recruitment 3,000 350+ new advisers in training in the 2,500 Academy at end-22 2,000 1,500 1,000 500 0 2015 2016 2018 2019 2020 2021 2022 29
Slide 30: Gross inflows: long-term track record
Gross inflows: long-term track record £20bn Challenging macroeconomic and geopolitical environment in 2022, but £18bn our business was very resilient: £16bn − Gross inflows of £17.0 billion £14bn − Net inflows of £9.8 billion £12bn − Retention remained strong at 96% £10bn excluding regular withdrawa
Slide 31: Building flows to 2025
Building flows to 2025 £bn Gross inflows: progress Growth in new business will not be linear 25 against our 2025 plan There will naturally be variations in growth rates from quarter to quarter and year 20 to year Cumulative gross inflows since we 15 announced our 2025 business plan remain ahead of w
Slide 32: Net inflows: long-term track record
Net inflows: long-term track record £12bn 2022 net inflows of £9.8 billion, £10bn reflecting: − Resilient gross inflow performance £8bn − Continued exceptional retention of client investments: 96% excluding £6bn regular withdrawals and maturities Maintaining our track record of net £4bn inflows in e
Slide 33: Funds under management
Funds under management £bn >10% p.a. compound growth over the last 5, 10 and 15 years 160 140 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 33
Slide 34: Our financial performance
Our financia PenPorMance JT | / | \ \ / fF | | | Lf of | \ \ | / yj / Wi, if HL. WA /| [- SJP
Slide 35: Record 2022 financials
Record 2022 financials £410.1m £16.66 52.78p £1,589.7m Underlying EEV NAV per share, Full year dividend EEV operating cash result, up 1% per share, up c.2% profit, up 2% up 3% Robust Solvency II position 35
Slide 36: Underlying cash result
Underlying cash result Underlying cash result up 2% to £m £410.1 million, driven by: 450 +2% − Growth in average mature FUM in 2022 400 410.1 401.2 leading to growth in net income from FUM 350 − Maturing FUM contributing in excess of £40 300 million to 2022 net income from FUM for the first time 250
Slide 37: FUM in gestation
FUM in gestation £m Contribution of gestation FUM to the Cash result Gestation balance now stands at 450 £45.5 billion 400 This will contribute over £380 million per annum to the Cash result from 350 2028 onwards when it all matures 300 − Using simple modelling which assumes for 250 example that FUM
Slide 38: EEV NAV per share
EEV NAV per share EEV NAV per share of £16.66, up 1% £ over past 12 months 18 Excludes additional c.£340 million 16 (or c.62 pence per share) value 14 of pensions business falling outside 12 of current contract boundaries 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 38
Slide 39: Dividends
Dividends Full year dividends set in line with policy at 70% of the Underlying cash result Full year dividend of 52.78 pence per share, growth of c.2% Includes proposed final dividend of 37.19 pence per share, subject to shareholder approval at our AGM 39
Slide 40: Longer-term outlook
Longer-term outlook We expect demand for trusted face-to- face financial advice will continue to grow St. James’s Place ideally placed − Academy − Proven investment approach − Modern and scalable infrastructure − Unique culture and refreshed brand Remain confident of achieving our 2025 ambitions and
Slide 41: Appendix
Appendix SJP
Slide 42: Net inflows: long-term track record
Net inflows: long-term track record 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 43: Our Net Zero commitments
Our Net Zero commitments #1 #2 #3 #4 Climate Net Zero Support our Net Zero in positive in our throughout our Partnership our investments operations supply chain becoming Net by 2050 by 2025 by 2035 Zero by 2035 43
Slide 44: SJP Asia: the market opportunity
SJP Asia: the market opportunity Singapore and Hong Kong 4.6m 300,000 people with US people with $100,000 US $1m – US $1m to invest – US $30m to invest = US $2tn total asset pool 44
Slide 45: SJP Asia: our proposition
SJP Asia: our proposition Who? What? Why SJP? International family Trusted brand, long-term wealth structuring relationships and great client outcomes Expats and high net Wealth extraction worth Singaporean for entrepreneurial Joint UK/Asia focus and Hong Kong families and expertise Nationals Long-t
Slide 46: SJP Asia: the 30-year-old disruptor
SJP Asia: the 30-year-old disruptor A clear plan to create long-term value Positioned to target expats and HNW individuals Building 100 great Asia Partner businesses Long-term, advice-led proposition Delivering cash break-even by 2025 46
Slide 47: Analyst following
Analyst following Autonomous Andrew Crean JPMorgan Enrico Bolzoni Barclays Larissa van Deventer Mediobanca Fahad Changazi Bank of America Andrew Sinclair Morgan Stanley Ashik Musaddi Berenberg Peter Richardson Numis David McCann Citi Andrew Baker Panmure Gordon Rae Maile Deutsche Bank Rhea Shah Peel
Slide 48: Costs of a full advice service: SJP v UK wealth management peers
Costs of a full advice service: SJP v UK wealth management peers The results to the assessment at 30 September 2022: 3.2% 2.3% 1.3% The firm represented by the first bar (Reduction in Yield of 1.3% each year) does not offer an ongoing advice service. The figures shown have been produced by Ernst & Y
Slide 49: Investor relations
Investor relations Craig Gentle Hugh Taylor Chief Financial Officer Investor Relations Director Email: craig.gentle@sjp.co.uk Email: hugh.taylor@sjp.co.uk Tel: +44 207 514 1963 Tel: +44 7818 075143 www.sjp.co.uk/shareholders