St James's Place soars past forecasts on unit trust and Isa popularity

FOURTH-quarter new business figures at wealth manager St James's Place far exceeded market expectations, as its affluent clients piled into unit trusts and Isas.

The company, majority owned by Lloyds Banking Group, yesterday said that its most closely- followed measure of new business – a combination of regular and single premiums – was up 38 per cent year on year to 133.2 million.

The rate of growth was more than double analysts' consensus, which had predicted an increase of up to 15 per cent.

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St James's Place said the surge was helped by a sales of unit trusts, which had more than doubled in value since last year to 282.7m during the quarter. Analysts at Shore Capital said the 43 per cent increase in sales of own-designed products – as opposed to sales of other companies' offerings – was positive for the group's margins as they accounted for 92 per cent of its business.

Funds under management stood at 21.4 billion at the end of 2009, a record level.

Net inflow of funds under management was at 700m, against 600m in the previous quarter.

Chief executive David Bellamy said the company aims to broaden its range of funds offering a greater variety of asset classes and is likely to announce new fund manager hires by the end of the third quarter.

He told The Scotsman:

"There's nothing that frightens me about 2010. I feel we're in a positive place.

"The extra partners we recruited last year and the work we're doing on new funds ought to bode well for growth this year."

Lloyds owns a 60 per cent stake in St James's Place, but Bellamy yesterday said that "nothing had changed" since he last updated the market and that he still did not expect Lloyds and St James's Place to still be together in three years' time.

"It will sort itself out in time," he added yesterday.