CAPITAL MARKETS BRIEFING/media/Files/... · 2016. 11. 23. · 31 December 2008 £’billion Year...
Transcript of CAPITAL MARKETS BRIEFING/media/Files/... · 2016. 11. 23. · 31 December 2008 £’billion Year...
CAPITAL MARKETS BRIEFING31st OCTOBER 2016
1.6 1.7 1.6
1.91.9 1.9 2.0 2.12.12.3 2.3
2.52.4
2.8 2.8
Q1 Q2 Q3 Q4
2013 2014 2015 2016
Gross Inflows by quarter
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%
0.91.03 1.05
1.191.19 1.25 1.261.391.32 1.35
1.481.63
1.36
1.71 1.66
Q1 Q2 Q3 Q4
2013 2014 2015 2016
Net Inflows by quarter
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%
+35%+9%
+9%
+21%
+16%
+17%
+20%
£0bn
£2bn
£4bn
£6bn
£8bn
£10bn
2010 2011 2012 2013 2014 2015 2016Sept
Gross Inflows YTD – up 20% at £8.1bn
+34% -11%+31%
+30%+10% +4%
+28%
+20%
+14%
+14%
£0bn
£2bn
£4bn
£6bn
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept
Net Inflows YTD – up 14% at £4.73bn
22%p.a. compound growth over the last
5 years and 17%p.a. over 10 years (at September 2016)
Funds under management
+25% +18% -10%+31%
+26% +6%+22%
+27%+17%
+13%
+22%
£0bn
£20bn
£40bn
£60bn
£80bn
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept
71.4
Admin Platform
People
&
Culture
Academy
IMAClients
&
Value
Recruitment
Products & Services
Risks & Regulatory
Environment
Marketplace
Opportunities
&
Threats
Partnership
&
Development
Capital ManagementCash-flow &
Dividends
Asia / Middle East
Admin Platform
People
&
Culture
Academy
IMAClients
&
Value
Recruitment
Products & Services
Risks & Regulatory
Environment
Marketplace
Opportunities
&
Threats
Partnership
&
Development
Capital ManagementCash-flow &
Dividends
Asia / Middle East
TONY DUNK
Investor Relations Director
£0bn
£2bn
£4bn
£6bn
£8bn
£10bn
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sept
Gross inflows
-9%
A PEOPLE BUSINESS
EMOTIONAL VS ARTIFICIAL
“The price is what you pay…value is what you receive”
Don’t have the time inclination, confidence or
knowledge to make their own financial decisions
• Pension freedom
• Brexit – Property funds
“WE WERE PARTICULARLY PLEASED
TO RETAIN 95% OF CLIENTS’
EXISTING FUNDS DURING 2008.
RETENTION OF FUNDS UNDER
MANAGEMENT IS NOT ONLY A GOOD
MEASURE FROM A PROFITABILITY
POINT OF VIEW BUT IS ALSO A GOOD
INDICATOR OF THE STRENGTH OF
RELATIONSHIPS THE COMPANY HAS
WITH ITS CLIENTS”.
Year Ended
31 December 2008
£’billion
Year Ended
31 December 2007
£’billion
Opening funds under
management
18.2 15.4
New money invested 3.0 3.1
Investment return (3.6) 0.9
17.6 19.4
Regular income withdrawals/
maturities
(0.4) (0.3)
Surrender/part surrenders (0.9) (0.9)
Closing funds under management 16.3 18.2
Implied surrender rate as % of
average funds under management
5.2% 5.1%
Client wealth account survey
Do you feel the St. James’s Place proposition provides value for money?
Good
Reasonable
Poor
Excellent
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
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)
19
Geographic Distribution
Partners
5%
2%
17%
23%
12%4% 4%
21%
9%Overseas Partners: 3%
Clients
Overseas Clients: 2%
6%
2%
13%
24%
14%
3% 4%
22%
10%
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
Global Investment Management Expertise
Benefits of investment management approach
• Above average investment returns (net of charges)
3.5
5.8
6.8
7.8
9.1
6.3 6.4 6.3
3.7 3.7
5.3
6.47.1
6.4
5.3
6.4
0%
2%
4%
6%
8%
10%
Defensive Conservative Balanced Managed Adventurous ImmediateIncome
BalancedIncome
DeferredInome
St. James's Place ARC PCI Peer Group Average
Annualised 3 year performance
St James’s Place Portfolio vs ARC Private Client Investment peer groups
Source: FE Analytics, Asset Risk Consultants (ARC) Private Client Indices and SJP internal data. Data to 30 September 2016
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
Client wealth account survey
Knowing everything you know of the St. James’s Place proposition,
would you recommend it to others?
Yes, but Ihave yet to
do so
37%
No 5%
Yes I would, and havealready done so
58%
TONY WICKENDENTechnical Connection
Tax alpha
Investment
Performance
Tax
Optimisation
Optimised Client
Outcomes
Aggressive tax avoidance
Acceptable tax planning and tax structuring
Tax alpha
So where does this leave us?
BORING IS THE NEW EXCITING
The boring list…
• Pensions
• ISAs
• Collectives
• Bonds
• BPR Schemes
• VCT /EIS
• Gift trusts /Loan Trusts /DGTs
• Life Insurance
• You get the picture ?
Comparison grid
INVESTMENT / ACCUMULATION PERIOD WITHDRAWAL
Diversified
spread of
underlying
investments
possible
Tax relief
on
investment
Investor
access
Tax on
income
Tax on
Capital
Gains
IHT Tax on
income
Tax on
Capital Gains
IHT on
death
Other tax on
death
REGISTERED
PENSION
YES YES YES NO NO NO YES NO NO POSSIBLE
(DEATH 75+)
ISA YES NO YES NO NO YES NO NO YES NO
UK COLLECTIVES YES NO YES YES NO YES YES YES YES NO
OFFSHORE
REPORTING FUND
YES NO YES NO NO YES YES YES YES NO
OFFSHORE NON-
REPORTING FUND
YES NO YES NO NO YES NO INCOME YES YES NO
UK INVESTMENT
BOND
YES NO YES YES YES YES NO INCOME YES YES NO
OFFSHORE
INVESTMENT
BOND
YES NO YES NO NO YES NO INCOME YES YES NO
VCT NO YES YES YES NO YES NO NO YES NO
EIS NO YES YES YES YES NO YES NO NO NO
AIM STOCK NO NO YES NO YES NO YES YES NO NO
PROPERTY NO NO YES NO NO YES YES YES YES NO
CASH NO NO YES NO NO YES YES YES YES NO
1996 – 2016 – Timeline of industry events
Extension of DOTAS to
IHTand
UCITS IV adopted
Barclays launches
Web ETFs, rebrands to
iShares(sold to
BlackRock)
Bank of England given independence over monetary policymaking
Abolitionof Advance
Corporate Tax and repayable
tax credit;on dividends
reduced to 10%
Married couples
allowance withdrawnfor couples
under 65
UCITS III adopted;
stakeholder pension
introduced
The Sandler Report
CP121 de-polarisation
‘Introduction:Stamp Duty Land Tax
DOTAS regime; special income /
capital gains tax
Introduction:pre-owned Asset Tax
Whole sale reform of the taxation oftrusts for IHT
Introduction: transferablenil rate band
CGT reforms:
entrepreneurs relief/single18% rate of
CGT
Introduction: new rules on ‘same-day additions’ for
trusts; 10% rateon savings
income abolished
Intro:dividend
allowance for individuals; higher ratesof SDLT for2nd homes
Securities Investment Board (SIB)
becomes Financial Services
Intro: 50% additional rate of income tax / 28%
rate of CGT for trustees and higher /additional rate tax
payers
Reduction in rate of income
tax from 50% to
45%
Intro:GAAR and Statutory
Residence Test
PensionsAct:
auto-enrolment from 2012
Finance Act: amends to simplified
regime
Welfare Reform and Pensions Act:
created stakeholder
pensions and pension-sharing
on divorce
Pensions Act: state pensionage reforms /
indexationmove to CPI
Finance Act: cut lifetime
allowance by 20% to £1.5m
from 2012-13 / annual
allowance by 80% to £50,000 from 2011-12
Finance Act: ‘Special annual
allowance’ for income over
£150,000
FinanceAct:
pensions simplification
Pension Act: legislates
for endof money purchase
contracting out
Finance Act marks the start of ‘pension
flexibility’; implementation
from 2015
Cut in lifetime allowance to £1m from 2016-17
Finance (No.2) Act Reform of annual allowance calculation
and taper from 2016-17
Start of NEST and
auto-enrolment
Child Support, Pensions and
Social Security Act: reworked SERPS into S2P
Finance Act: Lifetime allowance cut to £1.25m and annual to £40,000
from 2014
20111996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2015 20161997 2010 2012 20132009 2014
…..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
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
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)?
Tax alpha delivered
Get it wrong Get it right
£100
£60 £100
+66%
OUR TEAM SUPPORTING PARTNERS
Technical Connection Division
TCD key suppliers
T
C
D
Knowledge
Know how
Pro activity (ideas)
Availability
Confidence
Creativity
Credibility
Clarity
C
L
I
E
N
T
S
P
A
R
T
N
E
R
S
• Complex
• Consequences *
• Can’t **
* Financially detrimental if you “get it wrong”
** Readily “self service” answers
£
What do we deliver?
T
C
D
P
A
R
T
N
E
R
S
H
I
P
Access to knowledge
Business class CPD
Consultations
Business Generation
PQ Support
Answers to questions
The Value delivered by technical excellence
• Excellent client outcomes
• Reduced risk
• Increased productivity/profit
• Partner attraction/retention
JONATHAN MCMAHONJoint Chief Operating Officer
Overview
• Our community
– Employee engagement
– Apprentices and Graduates
• Our work in our communities
– The Foundation
– Corporate Social Responsibility
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
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 employees – 5.4 years
Physical investment in our premises
2016 survey headlines
EMPLOYEE
ENGAGEMENT
INDEX 86%-1 vs. 2014
Some key scores % positive
53. I feel proud of the work SJP does to help others through the
SJP Foundation 96%
4. I understand how my work contributes to the success of the
organisation 94%
45. I believe the fair treatment of clients is central to our culture 94%Engagement levels have remained high since 2014,
with SJP employees understanding how their
work contributes to SJP’s success and
believing that the fair treatment of clients is
central to the culture.
Vs. financial services benchmark
Questions most above Benchmark %
positive
Vs.
benchmark
62. I would recommend SJP as a great place to
work88% +21
63. I feel a strong sense of belonging to SJP. 83% +17
37. I am satisfied with the total benefits package 93% +17
61. I feel proud to work for SJP 92% +15
64. I intend to still be working for SJP in 12
months’ time.88% +13
32. During my last performance appraisal my
manager helped me to focus on developing
my performance.78% +12
48. I believe I am valued for what I can offer
SJP.77% +12
40. I have confidence in senior managers to lead
us effectively through the good times and the
bad. 82% +12
86%Question score 5 or more points above Benchmark
31 questions
were comparable
19
13
0
Question score within 5 points of the Benchmark
Question score 5 or more points below Benchmark
4 of the top 5 results relative to the norm
were engagement questions – indicating high
levels of engagement relative to other
Financial Services companies.
Vs. Financial services benchmark
I feel a strong sense of belonging to SJP
I still intend to be working for SJP in 12 months’ time
EMPLOYEE
ENGAGEMENT
INDEX 86%
Sustaining high levels of engagement can be a challenge and
although questions in the engagement index all perform above
the Financial Service benchmark there has been a declining
trend since 2014.
Diff vs. 2014 Diff. vs.
Financial
Diff. vs.
Best in
Class
I feel proud to work for SJP 92% -1 +15 +2
I would recommend SJP as a great place to work 88% -1 +21 +1
I feel a strong sense of belonging to SJP 83% 0 +17 +4
I still intend to be working for SJP in 12 months’ time 88% -1 +13 +3
This organisation motivates me to go the ‘extra mile’
at work 79% -3 - +3
Working here makes me want to do the best I can 87% -2 +8 +1
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. 19 new apprentices joined in September 2016
• Annual programme with broad range of specialisms – Accounting, IT, Marketing, Business
Administration, Financial Services, Investments
• 2016 launch of new higher level Para-planning Apprenticeship with University of Gloucestershire
• Wider outreach apprenticeship programme planned for 2017 to support and attract
socioeconomically disadvantaged young people
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 programme – providing skilled
apprentices for our business, tailored for SJP
• Potential for degree level apprenticeship delivery
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 a
way that considers the economic, social and environmental
impacts of what we do
Our Approach to Corporate Social Responsibility
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
way that considers the economic, social and environmental
impacts of what we do
Our Approach to Corporate Social Responsibility
Corporate social responsibility
• Focused long-term partnerships
• Local to SJP offices
• Supporting people in need
• Promote staff skills based engagement
Strategic approach
Corporate social responsibility
• Employability and Financial Awareness
• Local charity partnership
• Individual & team community support
• Input, output & impact measurement and benchmarking
Four core deliverables
Corporate social responsibility
• 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 staff,
running 28 sessions in 20 different schools
Financial Education
CSR measures
Key public CSR measures we
report into are:
• FTSE4Good
• Business in the Community
• London Benchmarking Group
• Carbon Disclosure Project
• Energy Savings Opportunity Scheme
• Carbon Reduction Commitment
We also subscribe or adhere to
these CSR standards:
• The Living Wage Foundation
• The Prompt Payment Code
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 and young people (split
between disability/illness & social and economic disadvantage)
• Our next largest theme is focused on Hospices and we donate
approximately 10% of our funds through Hospice UK each year (the
umbrella organisation for all independent hospices)
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
St. James’s Place Foundation
• 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
between those focused on ‘disability/illness’ & ‘Social & Economic
Disadvantage’
• All 7 Charities utilise participation in sport to empower and inspire
young lives and so they can reach their full potential
An example of Giving Effectively…
St. James’s Place Foundation
• Just some of our Major Grants…
St. James’s Place Foundation
An engaged community
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 is, of course, a key part of delivering
our business objectives
IAN GASCOIGNEManaging Director
Strategic context – the growth model
NEW BUSINESS
CAPACITYNumber of Advisers
PRODUCTIVITYNew Business per Adviser
71
Number of Partners x Average Productivity
= New Business
PARTNER
PA
Number of Multi-Member Practices
183
480
2006 2016
Sole Trader Business
PA ParaplannerPA
Partner
Sole Trader Productivity
£0m
£1m
£2m
£3m
£4m
£5m
Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+
by length of Service
Gross inflows p.a.
A Multi-Member Practice
Adviser PA PA ParaplannerAdviser
Partner
A Large Multi-Member Practice
Adviser Adviser Adviser Adviser Paraplanner Paraplanner PAAdviser PA
Practice Principal
Practice Manager
Sole Trader Productivity
£0m
£1m
£2m
£3m
£4m
£5m
Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6+ Yr11+
by length of Service
Gross inflows p.a.
Partner Productivity
£0m
£1m
£2m
£3m
£4m
£5m
£6m
£7m
Yr1+ Yr2+ Yr3+ Yr4+ Yr5+ Yr6-10 Yrs11+
by length of Service
Gross inflows p.a.
4945
41 40
29
0
10
20
30
40
50
Partners Advisers Academy Graduates Academy Students Next GenerationAcademy
Average Age by Partner Type
Productivity
£0m
£1m
£2m
£3m
£4m
£5m
£6m
Original Academy Academy 2014 Academy 2015 Advisers 2013
Sole Traders Graduates Advisers
Gross inflows p.a.
By recruitment vintage
Productivity
+26% +3% +1%+11% +6%
+9%+9%
£0m
£1m
£2m
£3m
£4m
£5m
2010 2011 2012 2013 2014 2015 2016 June
Gross Inflows per Partner Practice
Gross inflows p.a.
+26% +3% +0%+9% +4%
+6% +5%
£0m
£1m
£2m
£3m
£4m
2010 2011 2012 2013 2014 2015 2016 June
Average Gross Inflows
Productivity
Gross inflows p.a.
Strategic context – The growth model
CAPACITYNUMBER OF PARTNERS
PRODUCTIVITYNEW BUSINESS PER PARTNER
NEW BUSINESS
Experienced recruitment
Asia
Academy
Next Generation
Discretionary Fund Management
Personal development
Broadening investment portfolio
SJP Money Management
Discretionary Fund Management
Technical Connection
Intergenerational Mortgage range
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