St James’s Place adviser exits pressure shares and UK wealth operations

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St James’s Place adviser exits

Highlights

St James’s Place shares fell over 7 per cent on Thursday after Prospera Wealth Management and Wellesley Investment Management, overseeing £2bn in assets, exited the group.
Wellesley is now partnering with Sweden-based Söderberg, which has over £100bn under advice and recently agreed to acquire Schroders’ Benchmark Capital for about £200mn.
Jefferies notes the three departing advisory firms total about 2 to 3 per cent of St James’s Place’s £217bn in AUM, with client outflows likely to unfold over two or three years.

Adviser departures and source disclosure

As first reported by Financial Times, Prospera Wealth Management of Sheffield and Wellesley Investment Management in West Sussex have left St James’s Place, with the changes reflected on the Financial Conduct Authority register. News of the departures emerges on Thursday and sends shares in the Gloucestershire-based group down more than 7 per cent.

The two firms collectively oversee just over £2bn of client assets. Their exit follows reports a week earlier that Sovereign Wealth, another major St James’s Place advisory firm with about £3bn of assets under administration, is also considering leaving the network, while the company declines to comment.

St James’s Place operates through a partnership structure with about 5,000 individual financial advisers working at firms across the country. Under that model, appointed representative firms can only sell St James’s Place products and services.

Competitive and legal pressure on the sector

St James’s Place is cutting costs and trying to rebuild its reputation under chief executive Mark FitzPatrick, who is appointed in 2023. After scrutiny over a complicated and opaque fee structure, the group restructures its charges last August, leading to lower upfront fees for financial advisers.

The departures come as rivals expand by recruiting or acquiring advisers. Wellesley says on its website that it is now in partnership with Sweden-based Söderberg, which declines to comment; the group has more than £100bn in assets under advice, is backed by KKR and TA Associates, and has been building its UK presence after agreeing a deal earlier last month to acquire Schroders’ financial planning arm Benchmark Capital for about £200mn.

St James’s Place is also facing legal action from some former advisers who allege the company took their clients and failed to pay fair compensation. Jefferies analyst Julian Roberts says FCA data does not show a big exodus, noting the three firms represent about 2 to 3 per cent of St James’s Place’s £217bn in assets under management, and adds that client outflows would probably take two or three years because clients would not automatically transfer to a new owner. A person close to the situation says the company could still retain clients and advisers from the departing firms.

Our earlier coverage of adviser departures from St James’s Place outlined how Prospera Wealth Management and Wellesley Investment Management exited the network, together overseeing just over £2bn in client assets, and how Sovereign Wealth was also weighing a move. We noted the share-price impact and the broader context of competitive recruitment, fee-structure scrutiny, and legal claims from former advisers, while analysts suggested any client outflows could unfold over several years.

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