Full Year Results 2025 presentation Q&A transcript

St. James's Place 2025 Full Year Results Q&A - 25 February 2026 Transcript

Good morning everyone and thank you for joining us. Unfortunately, Caroline is unable to be with us this morning due to a family bereavement. Instead, I am joined by Charles Woodd, our Finance Director. Before we open for questions, I'd like to briefly reflect on a year of strong delivery and execution for SJP.

We delivered growth in new business, growth in funds under management, and growth in the Underlying cash result - while at the same time delivering strong returns for our clients. Drawing out some of the results which are new today:

• The Underlying cash result of £462 million, up 3% year on year and 4% ahead of consensus

• Underlying cash basic EPS of 87.0 pence, up 6% year on year

• We are returning 50% of the Underlying cash result to shareholders through ordinary dividends and buy-backs

• And a total of £313 million to be returned to shareholders for 2025

  Alongside delivering a strong operational and financial performance, we made good strategic progress:

• Our simple, comparable charging structure implementation went live smoothly in late summer. The new structure puts our investment performance on a fully comparable footing with the wider market and enabled the successful launch of Polaris Multi-Index. This has broadened client choice and grew to over £1 billion of FUM at year end - just 2 months after launch.

• Our review of historic ongoing service evidence continues to progress. Based on our experience in the second half of the year, we have released a further £25 million from the provision today, taking total releases to £109.5 million for the year. We are deep into the operational delivery phase and are on track to complete the programme in 2026.

• Our cost and efficiency programme also made good progress - for example, we completed the transition to our new organisational design during the year and we remain on track to remove around £100 million per annum from our addressable cost base by 2027.

  These achievements give us confidence in the strength of our business and our prospects, which has enabled the Board to update our shareholder returns guidance going forward - a year earlier than originally anticipated. So from 2026, we intend to increase our payout ratio to 70% of the Underlying cash result. We anticipate that this will comprise:

• Ordinary dividends which will make up at least 40% of the total shareholder returns

• And the buy-backs will make up the difference

  A different way of thinking about it is that dividends are expected to be at least 28% of the Underlying cash result, and buy-backs the remaining 42%. That's how you get to 70%.

  Our priorities for 2026 are:

• Completing our remaining transformation programmes

• Expanding the range of technology tools - including those which are AI-enabled - and making those available to our advisers, with the goal of helping them to work as efficiently as possible

  o This will give them more time to do what they do best - which is building trust, deepening client relationships, and delivering personalised, high-quality advice.

  o We see technology deepening the human relationships between clients and advisers, not replacing them

• Accelerating elements of 'Amplify' where we have the capacity to do so later in the year, and we will focus on refreshing our cash proposition and enhancing our high net worth proposition

We look to the future with confidence. We have already made changes to the business and we're focused on strengthening and growing SJP over the long-term. This means we are well positioned to capture the structural market opportunity ahead, and deliver for all our stakeholders in 2026 and beyond.

With that, I'm very happy to turn to questions.

Hi, thanks for taking the question.

1. I wanted to ask on AI, and how you see the potential threats from your business. I'd love to hear a little bit more about what makes you comfortable about the potential threats to growth and pricing power from competitors, including D2C platforms, who in time might be able to offer AI-led financial advice? As a corollary to that, it would be really helpful to hear a bit more colour on the AI tools that are operational today? What we might expect in the next 12 months? And how much this could improve your adviser productivity going forward?

2. And the second question was just on the adviser numbers, which fell by 0.4% in the second-half of 2025. Could you please give a little bit more colour on the productivity of your departing managers? And any comments on the outlook for adviser numbers going forward would be really helpful?

Andy, good morning and thank you for those questions. In terms of technology and AI, I think the way that we see technology is really it's an opportunity to strengthen our face-to-face advice-led model. So what we've observed over time is that while a lot has changed in and around the competitive landscape, what has been central actually is the primacy of the adviser-client relationship and the longevity of that relationship. Research that we have done and that others have done effectively emphasises that actually people still value human engagement in making financial decisions. They seek personal advice, whether it's around retirement, tax planning, and various other things etc. When we also think about AI, it's also important to bear in mind that advice in the UK is a highly regulated and a high trust service area and therefore it requires personalisation, suitability and the accountability, and human judgement is absolutely core to that.

Where we see AI can play a very, very positive role is in enhancing adviser productivity and client experience. You'll have seen in the presentation earlier on this morning that we're already using some AI tools to give advisers back time. And I think that's where the deep vein is going to be for the next few years for our advisers, for us, and for the whole profession. I think the more we can give time back to advisers to really focus with their clients is going to be absolutely key. I think by virtue of our size and scale at St. James's Place, we've got the opportunity and the connectivity. We are talking with some of the very biggest players for their thoughts on what we are doing and how we can simplify and how we can make what we do even better and even more efficient. Bear in mind as well that of

our 5,000 advisers, the vast majority of these folk are phenomenal entrepreneurs, not just in being great advisers, but also in terms of finding solutions in their own businesses and how they make themselves are more efficient. Within our 5,000 advisers, we have some businesses where they have actually created and built their own technology to improve their efficiency and how they do things. Through our oversight and our blessing on data protection and security, we're facilitating these tools being made available to other Partners within St. James's Place. So the great thing is, the innovation isn't just happening at the corporate level. It's also happening within the adviser community where they're eating, sleeping, drinking this 24-7, so some really good ideas are coming from them. What we're doing is making sure we can protect the data, protect the integration and really make sure it plugs in properly with the rest of our kit. At the end of the day, I think AI will enable greater productivity. It'll enable advisers to get back to what they really enjoy doing. It's not the admin they enjoy doing, it's being in front of clients, it's finding new clients and serving clients, it's being there for clients when it truly matters.

In terms of some of the features that we have today, we have a number of tools that we're using. Whether it's advice assistant, which harnesses the data in Salesforce and can produce suggestions on plan wrappers, investment amount, fund selections, and various other things. A rules-based engine based on our advice framework, which has been trained on thousands of recommendations made previously by SJP clients, and we've seen a very strong take-up from advisers around that.

Whether it's preparing for meetings or listening into meetings with clients, summarising them, converting the meetings into notes that get sent to the client, notes that get sent to the admin support, actions to be done, those are things that we have trialled extensively and we're now in the final stages of looking to roll those out across the Partnership as a whole during the course of this year. Then we have something particularly innovatively called ChatSJP, which covers a whole lot of the documents in our advice framework and business submission guides. It enables paraplanners and admin teams to check in on some of the advice that might be given and some of their thinking and to make sure everything's aligned. That saves a huge amount of time for every query that otherwise might be done through a call centre and enables the call centre operators to really focus on considerably more complex matters. We are introducing technology throughout the organisation, because I do see technology providing us with different hands in terms of what we do, but it's not going to change the face of advice.

Then Andy, your final question on adviser numbers. Adviser numbers declined modestly in the second-half of this year. I said back in February last year that we'd be embarking upon a productivity and quality initiative. And what you saw in the second-half of last year was the outworkings of some of that activity. The advisers that have left us as a result of that, their productivity was significantly below average on both growth flows and FUM, which is why you haven't seen any real shift in productivity. If anything, productivity, has been significantly stronger during the course of this year.

Good morning, everyone. Three questions.

1. Firstly, can you say anything about trading so far in Q1'26?

2. Secondly, do you have any targets for Group liquidity. If I look at your doubling of profits in 2030, if you pay out 70%, you're talking about retaining somewhere between £240 and £270 million of profit, which is in line with the amount of Group liquidity you currently have. I suppose that poses the question whether up the line the 70% is too low and you will just build excess liquidity over time?

3. Third question, think client growth was about 3% last year. Could you give us a sense as to what you anticipate client growth to be like over the next few years?

Great. Andrew, good morning. First off on trading, we put out our Q4 trading update less than a month ago, and I think the team provided a little bit of colour that flows were normalising. I'm not minded to give necessarily a month by month running update, but we've seen that continue. The Partnership is in exceptionally good health, they're all working incredibly hard at the moment. This is a very, very busy time with tax year end 5 weeks away, there's a huge amount of activity on the go, which is very encouraging.

From a liquidity perspective, we've introduced some new disclosures setting out how we think about liquidity. I think it is important for us to be able to make sure we have an appropriate degree of liquidity at the centre to support our capital allocation framework. The liquidity levels that we have, we will be considering them on a regular basis and we will be making our determinations as regards what we do with that liquidity based on facts and circumstances at the time. If we see an inappropriate build up, then it'll get activated through the capital allocation framework. The 70% payout ratio that we've effectively indicated for the time being, and bringing it forward a year, I think is dripping with signalling of confidence in the business and how well the business is performing and the great progress that we have made. We're very pleased to announce that a year early and to have increased the level of the payout. We think the composition, in terms of dividend and buy-back are important and are weighted appropriately. As and when that number builds in the fullness of time, facts and circumstances will dictate. You should expect to see the £271 million to grow as the business grows. We are a growing business and £271 million for a business with £220 billion FUM and a million clients feels appropriate for this size and the scale.

Client growth is going to become a little more complex as during the course of 2027 and onwards, we have a stronger push towards high net worth. With high net worth, it's going to be less about pure client numbers, it's going to be a real focus on getting clients with larger funds under management and our advisers needing to spend a bit more time with them. The vast majority of our advisers when we did a survey with them at back end of last year indicated they are expecting client numbers to grow. The vast majority of our new clients are word of mouth referrals, which I think contributes to a very high client retention level and very sticky relationships, which is a great business to be in.

Thanks. Three questions for me.

1. Just firstly, following up on AI. You had the charging structure change last year and had an opportunity to update your tech stack. I know there's different tech solutions that you're using across the piece, but is your tech stack nimble enough to add on these AI, LLM type models? You've got the scale, but with bigger companies, sometimes you've got legacy tech that can't really cope with this. Are you happy with the way your tech stack can adapt to these new models?

2. Secondly, on complaints, I saw new open complaints for the first half of 2025 were still high relative to history. They're stabilising, but to a high level. When do you expect them to come down and is that putting pressure on your complaints team? I know you've recruited quite a lot of people recently.

3. Finally on regulation, D2C, simplified advice. What are your thoughts around here and targeted support? And would you look to acquire a business and move into D2C as a result of that?

Thank you for those questions.

AI and simple comparable charging. I would have hated to have tried to weave in all sorts of other changes to what undoubtedly was the largest tech change programme that we've had in the history of St. James's Place. We have a tech stack that includes Salesforce, Snowflake, and some really modern tech that gets updated on a regular basis. It's through that we're able to plug and play and interact with AI tools. One of our adviser firms has some great AI kit that helps facilitate and improve efficiency. We very recently plugged that in and got that working well with Salesforce. So having done that, we'll be able to roll that out and that's given us the confidence that we can plug and play modern kit into our stack. So I'm not particularly worried about that component.

On complaints, business as usual complaint levels are down. What we're seeing is there's still some activity in terms of the historic ongoing service evidence review, from some claims management companies, but inordinately lower levels. We are doing more checks and balances in terms of whether the complaints that come in are legitimate complaints. We have some complaints that come in but when we write out to the client, they say, yeah, I spoke to them (claims management company), but I didn't want to complain, so it's not a legit complaint. Others aren't even our clients. We've got a lot of noise in the system, but we're comfortable that BAU level complaints are coming down to a more normalised level.

On regulation, I think both the government and the regulator are comfortable that there's a lot coming down the road in terms of the Mansion House reforms and really want to see how well these land. My discussions with Treasury and with the FCA is they are very focused on ensuring a successful launch of targeted support. In terms of disclosure regimes, they're trying to make things simpler. The retail investment campaign, they're really focused on trying to get more people investing. So it seems a lot more joined up than it might have been in the past.

Targeted support isn't really going to be for us by virtue of the nature of how that's going to work. I think targeted support is going to be very difficult if a human has to get involved, because a human can't unhear what they've heard, and a human is likely to pick up something that might throw it out of the decision tree that is so key to targeted support. Simplified advice, we are expecting some consultation papers from the regulator on simplified advice later on this year. We have been in contact with them. That is likely to be a lot more relevant to us. A key component of that is ensuring that if and when simplified advice comes out, it's done in a way that is economically viable for an adviser to be able to engage with somebody without doing a full fact find. There's still quite a lot of issues that need to be worked through, but the encouraging thing is that the regulator and government have demonstrated a willingness to engage with industry and trade bodies and listen and take views on. I'm cautiously optimistic that if this comes through, it should come through in a good guise, but there's lots to do around that particular patch.

As for D2C, if you think our underlying purpose is to effectively provide invaluable advice, I don't think a pure D2C play is something that's on the strategy. When you think that only 9% of adults in the UK take advice today, the market opportunity is so big for all of us in the UK. I truly believe it is one of the really few growth areas in financial services in the UK, the element of wealth, getting people to invest. So if government, the regulator, we, all the players in the sector, D2C or otherwise, are getting people to invest rather than save, that's going to be fantastic because there are three big gaps in the UK economy. There's an advice gap, there's an investing gap, and there's a retirement savings gap. And we've got too much saved, underinvested. We have too few people taking advice. And we all know we're in a DC world rather than the DB world, and I don't think society has truly understood the risks that they are taking on themselves and the need to prepare for their retirement in a more fulsome fashion than they're doing today. I think there's lots of opportunity for us all to actually grow very, very successful businesses, and I think we're going to stick to our knitting in terms of the advice piece.

Thank you. Good morning. I've got questions in three areas:

1. Firstly, Mark, in your pre-recorded remarks, you mentioned you'll be looking to improve reporting of financial performance for half year 2026. I just wondered if you could give more details on the scope of that project and if it's going to extend to making changes to the Underlying cash result disclosure?

2. And secondly, on flows, you saw fit to comment that outflows have normalised at the end of Q4 and into Q1. Just to clarify, does that mean a return to the levels of outflows as a percentage of FUM that you saw in the first three quarters of FY25?

3. On the pensions flows outlook, we're obviously edging towards the 2027 date for pensions to fall into the net for inheritance tax. I wondered if you started to see any differences in the typical advice that you're delivering to older clients around keeping funds in the pension wrapper and whether we should really expect withdrawal rates from pensions to tick up over the next year or two in light of those changes.

Ben, thank you. Three really interesting questions. For the first question, I'm going to hand over to my partner in crime, Charles Woodd.

Hello, Ben. Very good to chat about this. This has been an exciting project that we've been doing over the course of the last year. You'll have seen some of the output emerging. We streamlined our financial review at the half year, we've done that again at the end of the year and we've introduced a new section on capital and liquidity metrics. Hopefully that answers a number of the questions that were arising.

The implementation of the simple, comparable charging which happened in late summer was another important building block. Building on that, we've been sorting out what the reporting should look like, and we are expecting to share that with you all later in Q2, possibly May.

Ben, in terms of flows, I don't think I'd necessarily change your models based on what we saw in Q3 and Q4. I'd look at more the long-term flows. In terms of pensions, historically about 4% of individuals across the market paid inheritance tax. The ONS, in light of the changes the government brought about, thought that that might go up by 1.5%, so call it 6%, so it's not for everyone, thankfully.

What we are seeing is that investment bonds are becoming a lot more attractive now, but pensions are still an incredibly valuable vehicle for people to invest in up to a certain level while they're working. What we're seeing is people now starting to utilise their pensions rather than considering them as a pure investment vehicle that they might have had as a generational wealth transfer vehicle. The advice is shifting. It's a very, very complex area. I know our team are deeply engaged with government and the regulators working through how those changes need to come through and making sure the changes don't cross over with one another. We do expect pensions to continue to be important. For those older clients, we expect to see them drawing down on pensions probably in a slightly stronger way than they might have originally, but then I would expect them to be leaving some of the other investments alone. We might start seeing some of those withdrawal rates start to improve. It's going to be fluid, we need to see how it pans out.

My big request of government is when the next budget comes up, please make sure that you are proactive in saying we're not looking to change pensions again because we cannot have a third year

of further speculation. So get out of the blocks and just try and close that down as early as possible, please.

Good morning. Thanks for taking my questions.

1. I think there is no pushback on the argument that AI can dramatically improve adviser productivity and do wonders internally in terms of reducing costs and so on and so forth. I guess my concern is more what the impact is going to be on the future cohort of clients, maybe those that in theory will pick up advice in 10 years from now? In the UK, the majority of people pick up financial advice when they are approaching their retirement age, I suspect people that are in their 50s. The concern I have is if these people that are using D2C platforms gradually see the benefit of AI in their existing D2C usage, is there not a risk that these clients when they reach the age where they historically would have picked up financial they might decide not to do it because they will just have had an amazing AI proposition within their D2C platform. So, are you concerned by that? Would you consider being more explicit in guiding your advisers to use additional capacity freed by AI to recruit younger clients to avoid this risk of not getting them at all?

2. On the Polaris index range, I was wondering if you can give us some colour in terms of if you're seeing clients switching out of their active proposition and into passive? Or if mainly this is appealing to clients that put fresh money into the passive range and they don't really switch from their existing investment into passive?

Enrico, good to chat to you again. Really interesting point in terms of your AI scenario. Just a couple of useful facts to share with you. The average age of our new clients is actually coming down, over a third of our new clients are under 40 years old which is fantastic. The advisers are effectively ahead of this issue and building in a fantastic pipeline of future relationships by engaging with clients at a younger age. It's not just about the, what do I do when I retire and how do I prepare for decumulation? It's getting them to do the right things and getting the right behaviours in places. My 17 year old son said, Dad, SJP, it sounds like you guys are 'financial PTs', you get people to do what they should do when left own devices they may not do it. We're getting more and more younger clients, our advisers are younger, which is also very helpful in terms of their comfort around using new tech. We see that quite a few of our clients actually have business with D2C as well as having business with us. Share of wallet has grown a little bit over the course of the last year, on average, we're about 50-55%, but it's not 100%. People have money in D2C, but they understand what they get from St. James's Place, what they get from the adviser. In time, what we see is actually more and more money coming in. The longer somebody is with St. James's Place, the more money tends to come in and the share of wallet tends to grow rather than stagnate, because they just see the value of what's there.

To some extent, that talks a little bit of Polaris Multi-Index. Effectively what it is, is providing clients with a broader range of options where there is something that is a little bit different from the conventional Polaris. What we're seeing to date is new clients, new money coming into that. We are also seeing switching from the existing funds into Polaris Multi-Index. The reason a number of folk like it is they like the ongoing asset allocation, the ongoing rebalancing at an incredibly attractive price point. It's early days with Polaris Multi-Index. It's very similar to what we saw on the main Polaris when that launched, we saw a lot of switching initially, and then we saw a lot of new money coming in as actually the investment performance kicked in and people had more and more confidence about it. I am delighted at what the guys have done. I think it's fantastic in the first two months to have gathered effectively a billion pounds worth of assets into Polaris Multi-Index and really looking forward to seeing the growth because we can now offer clients a broader range of products.

Good morning. Two questions on my side.

1. Firstly, wondering if you could share any comments on how you're seeing advisers and clients behave with the new fee structure and if you're seeing any differences versus the old model in terms of gross inflows and productivity. Just aware that Q4 was a bit unusual with the Budget. Does it read anything into the flows?

2. Secondly, can you provide a bit more of an update on the high net worth push? What's the timeline? Would you have advisers that are more directly employed by SJP in this model? And what do you need to add on the product and investment proposition side?

Greg, thanks for those questions. In terms of the new fee structure, speaking to clients they are candidly wondering what all the big fuss was about. From their side, they're seeing it very much in line with everything else that's out there in the marketplace. From a client side, they think it's a lot simpler. The advisers, as I mentioned earlier on, are incredibly busy engaging with clients. Case count is very strong at the moment. The old fee structure is in the history books, we're now level pegging with everyone else.

The high net worth push is one where I'm really, really excited and really interested for us to spend more time, more energy in. Later on this year, we are looking to make even more impact on it. We've recruited some new talent. We're looking to streamline and improve the service that is available for both our advisers and clients in this area. As at year end, 10% of our FUM is in the high-net-worth segment, so a slight increase on last year. The team are working very closely with some of our advisers who specialise in high net worth. We've had some offsites exploring what do we need to do about product range, our service and our brand. We're clear on what we need to do, we're now just getting things done. We're recruiting additional people, and we're equipping the people in that regard. I'm quite excited about what we might do around this space. I think there are a lot of our advisers who are very interested in being more engaged in this space. A lot of them are already very engaged in this space. If we can provide them with greater support, they'll be able to do even more in and around this space and they're all looking to grow their businesses. That's probably the route in rather than us trying to have our own employed advisers focusing on the high-net-worth space. In reality, I think it'll be the second-half of this year that we really start to lean into it even further. It is part of the amplify phase of the strategy, but wherever I have capacity I'm looking to accelerate here because the high-net-worth opportunity is so real.

Thank you very much, and good morning. Three questions from my side:

1. Vanguard announced yesterday that they are launching a new model portfolio solutions product in conjunction with Wellington. How do you see St. James's Place's product range as differentiated relative to the other model portfolio solutions available in the market? And perhaps specifically referencing Polaris Multi-Index?

2. On the historic ongoing service evidence review, you mentioned that you will complete that in 2026. Does that mean that we can completely put it to bed in 2027 or is there a statute of limitations that needs to run before you will be able to finalise how much of the provision is needed?

3. With Polaris Multi-Index being a lower cost offering and with AI potentially lowering costs, do you see future growth coming from maintaining margins or do you believe that margins may be compressed and would you be looking to grow mainly from increased customer volumes?

There are a number of MPS products out there. Polaris and Polaris Multi-Index are funds of funds, so not really the same as a model portfolio service. Rebalancing in an MPS will crystallise capital gains tax, and that wouldn't happen in a fund of funds, hence less frequent rebalancing in a MPS as against the rebalancing that we do in the Polaris and Polaris Multi-Index (PMI) range. We're more dynamic and therefore we believe in a world that is changing as rapidly as it is, we think that is an advantage for Polaris and PMI. It looks like the latest MPSs out there has kind of got a mixture of active and passive. At the moment, we have Polaris which has a blend of active and systematic strategies and Polaris Multi-Index works through 14 index funds, so as a blend is probably at a more attractive price point.

Ultimately, I think in terms of product innovation, what our team have been able to demonstrate is a great ability to innovate and come up with solutions that work well for clients. There's a real client adviser demand and pull. It's been great to hear some advisers saying, Mark, you know, my clients have been at me for ages to have something like Polaris Multi-Index. It's great that we have it now, and it's great that I can talk to them about it.

In terms of the ongoing service evidence review, you'd recall one of the reasons we put a limit on our time period of going back to 2018 was linked to the statute of limitations. That has stood up from challenge from all sorts. At the end of 2026, we should be done now. There may be somebody who wants to take it to FOS and complain and that might draw the process out, but for all intents and purposes, I expect us to be done. The team know my ambitions to have it done this year, and I'm certainly not on this call going to let them off the hook.

In terms of AI and future growth and margins and the like, candidly, when I look at margins, I think there are three elements to our margin; there's a margin for advice, platform, the fund manager piece. The fund manager piece is, all as you know on the phone, the pressure that that's under. In terms of platform, the cost base from that tends to be a little bit more fixed. Therefore, as we grow in size and scale, we would expect to give back some of that increased profitability and share that with clients. In terms of the advice, advice is really interesting because there are so few advisers in the UK. The regulation is very high in the UK, vis-a-vis advice and therefore, we don't see there being a huge amount of downward pressure on that component. I think our growth is going to come through growth in terms of both clients and funds under management. As we do more in the high-net-worth space, that might give rise to slightly fewer new clients, but larger FUM, with that more sophisticated and challenging needs. Therefore, a bigger role for the adviser to play. Rather than speaking to a client maybe once a year, it's speaking to the client maybe, once a quarter or more regularly than that. Especially in this market where there's 9% of UK adults take advice, we have so few advisers in the UK. An interesting stat I saw was that SJP contributes 52% of all new advisers in the marketplace through the Academy. It's really, really important and that we have a thriving advice profession and we need to make sure like other professionals, they are appropriately paid and rewarded for the fantastic work they do.

Thank you for taking my questions. Just two left:

1. Could you give an update on your target of doubling the 2023 Underlying cash result by 2030? I know it's only two years in, but in terms of underlying assumptions on costs, FUM, etc, where you are standing now versus the target?

2. Just a follow up on AI, we have controllable costs increasing by 5% in 2026. Could you remind us again what these are and if AI will help this underlying growth rate in the long term?

Very interesting questions. Firstly, on the ambitions that we set as part of our strategy, we remain very comfortable with doubling the Underlying cash result between 2023 and 2030. I'm not reminded to re-broker that this early on because while we have had a much stronger start than I think we all thought and we all expected, I am conscious that markets are not linear and there's quite a way to go between now and 2030.

Controllable costs by and large cover people, cover property, cover tech. In time, I would expect as we get smarter in terms of how we use some of our tech, that that may provide an impact in terms of what happens with our controllable expenses. The key thing to remember is that our main admin provider, SS&C, that cost base is not within controllable expenses. A lot of the AI functionality will sit in there or will sit in the adviser businesses. There will be some that will sit in us, but at the moment our focus is, one, trying to make our advisers as productive as possible. Two, make client interactions and adviser interactions with the corporate and the admin as smooth and as simple and as standardised as possible. And three, we'll be working out how we use AI within the corporate. I'm being very deliberate in that sequencing because I think the biggest bang for buck is making the advisers' lives as easy as possible so they can spend more time with their clients. Second is looking after the client interaction and all the admin processing, making that as standard and simple as possible. And third will be how we actually simplify what we do internally here at the corporate and the role that AI can play. I know that folk internally do use AI and AI is part and parcel of what a lot of us use. At the moment, I think we are all experimenting and getting more comfortable with it, as against it being necessarily a major reduction in our controllable costs at this stage.

Morning, Mark. Morning, team. Three from me, please:

1. First one on the capital distributions and the new policy there. Can you give us some colour as to what the thinking was with the bias towards the buy-back, the 40:60 in favour of the buy-back? What was the thinking there rather than a more dividend bias?

2. Secondly, I just wanted to know how you're still thinking about the business in terms of the actual capital? Historically, you focussed towards MSB and the surplus around that as being the preferred metric rather than solvency II. If we're thinking about the actual capital and the free capital in the business, how should we be thinking about that today and what is the level?

3. Finally, looking forward a bit more, clearly the business is in much better shape than it was when you came into the business, Mark. Your predecessors really focussed entirely on organic growth. In a different environment with different levels of organic growth, are acquisitions still firmly off the table, or is it something that you might consider more now the business is in better shape again?

David, thank you. Good to talk to you. Let's take them in order. In terms of distribution, 28% of the return is going to be cash dividend. That's a minimum. The balance of 42% is effectively the buy-back. We felt at these share prices and the value enhancement to shareholders of having a stronger buy-back rather than cash dividend was important. If you look at consensus numbers for 2026 and you model out the new distribution, it shows a healthy uptick in both cash dividends and in the buy-back. We, the Board, were comfortable that this would resonant with people who are very interested in dividend and also people who recognise that actually a buy-back has become a much more accepted tool in the UK market and can be very powerfully deployed. We were keen to deploy it on an ongoing basis rather than a discrete basis.

On capital, there's a reference to the management capital coverage assessment, which I think is a new term for what was the MSB. I'll let Charles cover that in a moment, but I think the data is contained within the databook around capital.

Yeah, that's right, Mark. David, I think you're referencing the fact that we are an insurance group and therefore we do have reporting requirements under solvency II. The new disclosure is designed to make clear that that's not the limiting factor in terms of how we think about capital and about shareholder distributions, really the focus is on liquidity. That's what we focus on and what we'd like you to focus on too. As Mark notes, the management solvency buffer, which has been replaced by the management capital coverage assessment still lives, and it features in our capital and liquidity disclosure. It's part of the bridge from our total liquidity down to the free liquidity. We would encourage you to focus on those new liquidity disclosures.

David, on your third question, you are right that I was very clear that inorganic was not something we were going to consider, especially given the share price of old. I think there is such a strong organic opportunity ahead of us, that's where all our focus and attention is. We have seen when players aggregate, it creates huge disruption and huge distraction. There's a lot of distracted and disrupted players in the market. We plan on looking at that very carefully and seeing if there's opportunities for us to lift out teams from some of our competition, given that they are potentially somewhat discombobulated over recent events.

Hi, Mark. Thanks for taking my question. One on AI and one on cash monetisation, please:

1. I'm keen to understand if you think AI might drive adviser headcount to shift at an industry level between the restricted and independent channels. How do you assess the risk that third party AI driven adviser productivity tools could make it easier for independent advisers to operate outside of the SJP ecosystem? If IFAs can now run more efficient practices and potentially capture a larger share of the value chain through higher advice fees or by offering clients lower all-in fees at the expense of platform charges, what aspects of the SJP restricted model remain most critical in retaining advisers? Is it primarily brand, the broader support and compliance infrastructure, your succession framework, or do you just believe that AI solutions in the open market will never really be able to replicate the depth and the integration of your own tech stack?

2. My second question is if there's any update on your plans to further monetise idle client cash via your arrangement with Flagstone. It feels like the FCA is no longer scrutinising retained interest, so just wondering if you see an opportunity to expand margin there?

Charles, thank you. Two really, really interesting questions.

On the AI piece and adviser experience, I think a few things stand out and this is kind of what advisers who come to us and advisers who have been with us a while say stands out. Our scale, capital, the resources we have to deploy. Bear in mind that we announced 18 months ago that we are deploying approximately £260 million back into our business to improve our technology, use of data, broaden our client offering, focus on client segmentation, etc. There's nobody else in the market that's putting that kind of money into any business. If anybody's putting money in, it's to buy businesses, it's not necessarily to improve them. Those who are buying are talking about synergies and taking costs out, not putting investment in on that side. Brand and reputation is very, very important. The technical

support that we provide. Then also we provide an advice guarantee for clients and for the advisers effectively saying that we guarantee any of the advice that they give as a part of St. James's Place. That's before you get to the frequency with which regulations change. For IFAs it's becoming incredibly difficult, which is why you're seeing more and more getting consolidated and why you're seeing small boutiques really struggling to grow and cope with the weight. If you're going to do technology properly, you need a cheque book, and we have a cheque book. Because of our size and scale, the big players come and talk to us, they want to know what we're doing, what we're thinking, and how they can help. Effectively, our big offering for clients and advisers is that we give them the best of both worlds. We give a client the local, long-term relationship from somebody who lives around the corner, whose kids might go to the same school as your kids, but that person is backed by the power and strength and the brand and reputation of St. James's Place and an IFA just can't do that.

As for the cash piece, the Flagstone level has continued to increase. We have seen an uptick in terms of the amount in Flagstone to £5.7 billion at FY25. Just to remind everybody, that is not included in our FUM number. We are working with Flagstone and we are pursuing other opportunities as well in terms of what we might do to try and get that money to be more broadly invested. We know from speaking to our advisers that while clients have money at Flagstone, there are a whole bunch of clients who have money elsewhere. Step one for us is to get some of the money elsewhere into something like a Flagstone. Secondly is to get it more easily transferred across into St. James's Place. At the moment, it's a very clunky going from a deposit account to a holding account to your own personal account to an SJP account and then to get invested. Most people give up the will to live during that journey. What we're looking to do is to streamline that so that it can be a single click across from savings to investment. People are over saved in the UK, as in the US, and we need people to invest more and be less worried about timing the market and more focused about getting the money in the market so we can benefit from the compound effect. There's quite a lot of time and attention focused on how do we work that better and how do we help our clients be more effective. They've worked hard to make those savings, how do we convert them into sensible investments.

Thank you very much for your questions. Really great questions today. Three key takeaways from our results today:

• Firstly, was that 2025 was the year of strong delivery and execution for St. James's Place. We delivered strong operational and financial results, while making significant strategic progress.

• We're delighted to have updated our shareholder returns guidance going forward a year earlier than originally anticipated, and we move forward with an increased payout ratio of 70% of the Underlying cash result.

• And thirdly, we look to the future with confidence. We've already made changes to the business. We're focused on strengthening and growing SJP and the Partnership over the long term. This means that we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in 2026 and beyond. Thank you very much, everyone, and have a great day. Thank you.