Your future,
Annual Report and Accounts 2022
Your future,
your way
In a changing world, we understand that clear financial advice
creates confidence and greater certainty. At St. James’s Place
we help our clients move forward, towards their goals. Acting
responsibly, we ensure they have the advice to build their
future, their way, delivering positive, long‑term impact.
Strategic Report
Chair’s report 04
How we do business 08
Our stakeholders 09
Chief Executive’s report 16
Our business model 20
Market overview 22
Our strategy 25
Building community 28
Being easier to do business with 29
Delivering value to advisers
and clients through our
investment proposition 30
Building and protecting
our brand and reputation 31
Our culture and being a
leading responsible business 32
Continued financial strength 33
Our responsible business 34
Chief Financial Officer’s report 66
Financial review 70
Risk and risk management 90
Approval of the Strategic Report 99
Governance
Board of Directors 102
Corporate governance report
(including section 172(1) statement) 104
Report of the Group Audit Committee 122
Report of the Group Risk Committee 132
Report of the Group Nomination
and Governance Committee 139
Report of the Group
Remuneration Committee 143
Directors’ report 175
Statement of Directors’
responsibilities 178
Financial Statements
Independent Auditors’ Report to the
Members of St. James’s Place plc 180
Consolidated Financial Statements
under International Financial
Reporting Standards 188
Parent Company Financial
Statements under Financial
Reporting Standard 101 255
Supplementary information:
Consolidated Financial Statements
on a Cash result basis (unaudited) 262
Other Information
Shareholder information 270
How to contact us and advisers 271
Glossary of alternative
performance measures 272
Glossary of terms 275
2022 Highlights
Financial highlights
£17.0bn
Gross inflows
Down 7% from £18.2 billion in 2021
£9.8bn
Net inflows
Down 11% from £11.0 billion in 2021
£148.4bn
Funds under management
Down 4% from £154.0 billion
at 31 December 2021
£95.6bn
£117.0bn
£129.3bn
2018 2019 2020 2021 2022
£154.0bn
£148.4bn
£410.1m
Underlying cash result
1
Up 2% from £401.2 million in 2021
£405.4m
IFRS profit after tax
Up 41% from £287.6 million in 2021
52.78p
Dividend per share
Up 2% from 51.96 pence in 2021
£1,589.7m
European embedded value (EEV)
operating profit
1
Up 3% from £1,545.4 million in 2021
Non-financial
highlights
+3%
2022 growth in advisers
2021: 5%
Page 28
87%
2022 percentage of employees
who feel proud to work at
St. James’s Place
2021: 85%
Page 58
£8.0m
Invested in our communities
2021: £6.2 million
Page 52
1 The Underlying cash result and EEV operating profit are alternative performance measures
(APMs). The glossary of alternative performance measures on pages 272 to 274 defines
these APMs and explains why they are useful. The Underlying cash result is reconciled
to International Financial Reporting Standards (IFRS) on pages 74 and 75.
www.sjp.co.uk
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Other InformationFinancial StatementsGovernanceStrategic Report
Strategic Report
Chair’s report 04
How we do business 08
Our stakeholders 09
Chief Executive’s report 16
Our business model 20
Market overview 22
Our strategy 25
Building community 28
Being easier to do business with 29
Delivering value to advisers
and clients through our
investment proposition 30
Building and protecting
our brand and reputation 31
Our culture and being a
leading responsible business 32
Continued financial strength 33
Our responsible business 34
Chief Financial Officer’s report 66
Financial review 70
Risk and risk management 90
Approval of the Strategic Report 99
02
Helping you to
move forward
with confidence
03
Strategic Report
Other InformationFinancial StatementsGovernance
Overview
2022 was another extraordinary year, not least in the UK
where global events contributed to rising rates of inflation
that have exacerbated a cost-of-living crisis. Domestic
political change has further unsettled the macroeconomic
environment and it is against this backdrop that the Board
has had to operate, ensuring we make careful decisions
that take account of the long-term implications for our
stakeholders. St. James’s Place (SJP) exists to give people
the confidence to create the futures they want, and during
challenging times, the case for robust financial advice
appears even clearer. As a Board, we believe the SJP
Partnership provides the very best support for people
looking to make the right decisions to safeguard the
futures for them and their families. During 2022 I was
delighted to spend considerable time with our advisers
in the Partnership and it is clear to me that they are
motivated and focused on delivering great outcomes for
clients. Reflecting on 2022, the Board has been pleased to
see further demonstration of the resilience of our business
model, which emphasises the opportunity we have ahead
of us as we continue to execute our strategy.
The Board
The shadow of COVID-19 was cast over much of 2021,
but 2022 provided the opportunity for the Board to return
to regular face-to-face interaction and allowed us to
welcome back shareholders to meet with us at our Annual
General Meeting in May. The pandemic demonstrated
how adaptable boards and companies could be and,
as a Board, we are now even more confident in our agility
and resilience when unforeseen events arise.
The Board and Group Nomination and Governance
Committee have both reported on the implementation
of the Board’s succession plans in recent years. In 2023
we will see Simon Jeffreys and Roger Yates retiring following
the Annual General Meeting, having each served nine years
on the Board. On behalf of the Board, I would like to take
this opportunity to thank both Simon and Roger for their
contribution to the Board and in particular their stewardship
of the Group Audit and Remuneration Committees.
Succession planning is a key focus of the Group Nomination
and Governance Committee, and its work over the last few
years has enabled us to manage the departure of Executive
and Non-executive Directors with orderly handovers being
provided to their successors. In November we welcomed
Dominic Burke to the Board as a Non-executive Director,
and he will be taking on the role of Senior Independent
Director following the Annual General Meeting. Dominic
brings with him a deep knowledge of financial services and
the experience of having founded and led large businesses
in the sector. Dominic’s appointment has resulted in the
percentage of women on the Board falling to 30%
temporarily, but the Board made the appointment fully
aware that the proportion of women would be 37.5% when
both Simon Jeffreys and Roger Yates step down after the
AGM in May 2023. A more detailed overview of the work of
the Group Nomination and Governance Committee can
be found in its report later in this Annual Report.
The market
Despite the challenges I have referenced above, the
Group continued to deliver resilient results in 2022.
We also continued to demonstrate the discipline to manage
our cost growth within plan, despite the macroeconomic
headwinds. However, no business is immune to the impact
of the rates of inflation seen in the UK in 2022 and the Board
is mindful that while maintaining discipline on costs is
critical, we must also remain focused on making decisions
that drive further long-term success for our business.
Financial services regulation has never been more
demanding of firms, something which should give
consumers confidence that robust advice can help deliver
the right outcomes for them. The introduction of the FCA’s
Consumer Duty is a case in point and is a step change in
the way supervision will work in future, emphasising the
importance of putting customer outcomes at the heart of
decision-making. This is a key area of focus for the business
and the Board in 2023. In such a demanding world SJP’s
advisers benefit from the backing of a FTSE 100 organisation
that has invested in a wide range of support functions
that enable them to focus on the most important thing:
delivering excellent service to their clients, and so we
welcome the reform.
Chair’s report
Supporting our clients
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Strategic Report
We firmly believe in
the value of advice and
are strong advocates
for regulated advice.
Paul Manduca, Chair
52.78p
Dividend per share
2021: 51.96 pence
05
www.sjp.co.uk
Strategic Report
Financial Statements Other InformationGovernance
Chair’s report
The infrastructure to support the provision of advice in the
current environment does not come without investment
and we recognise that, across the market as a whole,
the supply of advice falls short of the potential demand.
We firmly believe in the value of advice and are strong
advocates for regulated advice, which means we are
keen to work with policymakers and other stakeholders
to help ensure a broader segment of society has long-
term financial security, even if they are never SJP clients.
The high inflation and intense cost-of-living pressures
witnessed throughout 2022 have highlighted, more than
ever, the need for greater financial resilience. The defined
benefit pension scheme is a thing of the past for many
and the shift increases the pressure on individuals and
households to generate the savings they will need to see
them through their retirement. Setting aside the money to
save in the current environment is difficult for many, but the
challenge of turning these savings into something that can
sustain an ever-ageing population is perhaps even greater.
There are now many more options available to investors,
but research continues to tell us that people lack confidence
when it comes to managing their own financial affairs.
Whilst advice may not be the right answer for some,
for many it will be and our continued growth, even in the
most challenging economic circumstances, demonstrates
that demand exists.
The Board’s priorities and our strategy
Our key planning assumptions and strategy to 2025
were set out in 2021 and these remain broadly unchanged.
Our ambition is still to grow new business by 10% per annum
and contain growth in controllable expenses to 5% per
annum, and we still intend to pay out around 70% of the
Underlying cash result in dividends to shareholders. At our
Board Strategy Day in June the Board took the opportunity
to reaffirm its support for the existing strategy as well as
turn an eye to the future beyond 2025, seeking insight
from both inside and outside the business.
At the half-year we declared an interim dividend of
15.59 pence per share and the Board is pleased to be able
to recommend to shareholders a final dividend for 2022
of 37.19 pence per share. This brings our full year dividend
to 52.78 pence per share, equivalent to 70% of the
Underlying cash result.
The Board’s key focus areas for 2022 were as follows:
The Partnership – The health of the Partnership remains
critical for this business as it is the engine that drives SJP
forward. The importance of personal interaction with clients
and with each other has been a theme throughout our
history and in 2022 our advisers have continued to evolve
their own propositions for clients by augmenting their
in-person engagements with online meetings. We have
also been able to hold a full programme of development
conferences for our adviser community, allowing them to
share experiences with each other, further their development
and provide valuable feedback to senior management.
Administration – As previously reported, the Bluedoor
migration has provided us with a platform for improving
our administration and client services. Realising all of
the benefits will take time as we optimise our new-found
capabilities, but the Board has been delighted to see
further progress in 2022 in the quality and robustness
of administration. Where possible we are seeking to
introduce straight-through processing which ensures
our advisers can process client transactions in a timely
and accurate manner.
Digital – 2022 saw the release of our first client app,
enabling our clients to see personalised performance
figures for their investments and reducing the need
for paper documents. SJP clients who prefer paper
correspondence and statements will still be able to have
these, but the app represents a step towards greater digital
capability for clients and advisers to support their face-to-
face engagement. In 2022 we were also able to continue
the development of and integration of Salesforce, with the
benefits of the platform beginning to emerge for a number
of stakeholders across the SJP community. The transition
to a strong customer relationship management (CRM)
system is a key component in enabling us to evidence
how the new Consumer Duty is being met by SJP.
“Being responsible is not only the right thing
to do; there is a compelling commercial
case for it. This is why our ambition is to be
a leading responsible business in the UK.”
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St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
Investment performance – The turmoil in global markets
during 2022, combined with fiscal measures in response to
macroeconomic pressures, have inevitably impacted fund
performance. While investment markets weighed on client
investment returns in 2022, the Board has been pleased to
see relative performance improving as the year progressed.
Our third Value Assessment Statement (VAS), published in
July 2022, built upon the previous two reports and was well
received. It highlighted areas where we still need to focus,
and the Board wants to continue to prioritise these in line
with regulatory expectations and our desire to deliver good
outcomes to clients.
Rowan Dartington and Asia – Despite the challenging
external environment, Rowan Dartington has been able
to deliver in line with its headline financial objectives.
Asia also faced challenges in 2022 including the COVID-19
restrictions which remained in place in Hong Kong for
much of the year. Whilst the restrictions and volatile
markets have suppressed new business growth, the
business has performed well.
Our culture and responsibilities
Our special culture is one of the main reasons SJP has been
successful over the years, but over time we have had to
work harder to make sure it transmits as effectively across
much larger adviser and employee bases. It is the Board’s
role to monitor culture, but doing so is not straightforward.
However, it is easy to recognise when culture is not as we
would like so we are keen to make sure we put down some
markers now to remind us what makes our culture good
and where we still aspire to be better. These markers
provide reference points by which we can measure and
monitor aspects of our culture, and give early warnings
if any element of it may be straying outside our high
standards. Throughout this report we reference our
stakeholders, and the Board is delighted that we have
such high levels of engagement. But what is most
important is that we listen to our stakeholders and take
account of their views in our decision-making. As is the
case with many organisations, our stakeholders demand
that we act responsibly, and we know that being a
responsible business is no longer an option but a necessity.
To continue to deliver unrivalled stakeholder value, and
to enhance the transformational impact we can have,
we have made a commitment to become a leading
UK responsible business.
Being responsible is not only the right thing to do; there is
a compelling case for it. This is why we put responsible and
sustainable decision-making at the heart of everything
we do. Last year we provided a fuller picture of what being
a responsible business meant to us and I am pleased to
report that we made further progress in 2022 and you can
find more detail in the our responsible business section
of this Annual Report and Accounts on pages 34 to 65. Our
responsible business Framework recognises that, to have
the greatest impact, we should focus on areas that align
most closely with our purpose, and where we are best
positioned to move the dial. This is why we have identified
four strategic priorities (financial wellbeing, investing
responsibly, climate change and community impact)
which are underpinned by nine strategic enablers (see
page 35 for more information). During 2022 the business
developed, and the Board agreed, our responsible business
narrative, goals and KPIs which will permeate throughout
our business and provide the basis for the environmental,
social and governance (ESG) targets we set management,
including those forming part of their annual bonus
objectives (see page 163 for more information).
Concluding remarks
I would like to express my thanks to my Board colleagues
for their support and hard work during the year and
congratulate management, the employees and in
particular our Partner businesses for what they have
achieved in a challenging year. Whilst I have tried to give
a flavour of the Board’s activity in 2022, I would encourage
you to read the corporate governance report which covers
this in more detail. 2021 was an exceptional year for SJP so
to back it up with another good set of new business and
financial results in 2022 further demonstrates that not
only do we have the right strategy, but also a community
capable of delivering future growth. I look forward to
welcoming shareholders to this year’s Annual General
Meeting, which will be held on 18 May 2023.
Paul Manduca, Chair
27 February 2023
If you would like to discuss any aspect of my report or
the corporate governance report on pages 101 to 121,
please feel free to email me on: chair@sjp.co.uk
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Governance Financial Statements Other Information
www.sjp.co.uk
Strategic Report
How we do business
Who we are
What we do
Our vision
To be the best place to create long-term financial security
Our financial goals to 2025
10%
Annual new
business
growth
5%
Annual growth
in controllable
expenses
95%
Annual
retention of
client FUM
£200bn
Total client FUM by 2025
Where we are going
How we do it
We will work together
Doing the right thing
Valuing, respecting and
caring about people
Giving back
Striving to put things right
if we make mistakes
Being the best version
of ourselves
Achieving and celebrating
excellence
Being brave and bold
Embracing diversity
Investing in long-term
relationships
Helping each other
to develop and grow
Creating success together
Being easy to do business with
Find out more on our culture and being a leading responsible business on page 34
Why we exist
To give you confidence to create the future you want
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Strategic Report
Our stakeholders
Advisers
We give you the freedom to build
and grow your financial advice
business, your way, with the
confidence of a FTSE 100
company behind you.
Page 10
Employees
We give you the opportunity
to create the career you want
and the confidence to chart
your own career path.
Page 12
Shareholders
We offer the opportunity to invest
in the leading wealth management
business in the UK, giving you
access to long-term structural
growth through a business that
has sustainable competitive
advantage and a clear direction.
Page 14
Clients
We help you feel confident about
your future by empowering you with
clear financial advice to help you
achieve your personal goals and
improve your financial wellbeing.
Page 11
Society
Our ambition is to be a leading
responsible business in the UK.
To us, this means considering
responsible and sustainable
decision-making in everything
we do.
Page 13
09
Strategic Report
www.sjp.co.uk
Other InformationFinancial StatementsGovernance
Our stakeholders
Supporting
our advisers
We give you the freedom to build and
grow your financial advice business,
your way, with the confidence of
a FTSE 100 company behind you.
How we help our advisers move forward
with confidence
Our advisers help clients create the futures they want
for themselves, so we enable, support and empower
our advisers to deliver sound financial planning advice
and build great businesses. We help them grow, succeed
and stay safe by providing a range of services including
marketing support, business checking, technical support,
technology and training. We do this because we’ve always
believed the best financial advice and the best client
outcomes start with supporting the best financial advisers.
How we engage with our advisers
We enjoy a close relationship with our advisers,
as, by working in partnership with them we can
better help our clients. We provide regular
bulletins and updates to them through our
digital communication channels, but we focus
much of our effort on face-to-face engagement,
from individual meetings to regional
conferences and our Annual Company Meeting.
We host consultation sessions and conduct
adviser engagement surveys so that we better
understand the issues and opportunities that
matter to them. We also offer learning and
development opportunities so that our advisers
are constantly improving in what they do, and
we provide regulatory oversight so that we keep
both advisers and clients safe.
4,693
Advisers
31 December 2021: 4,556
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Strategic Report
Annual Report and Accounts 2022
Empowering
clients
How we engage with our clients
We want great outcomes for clients so we’re
always looking to understand how we can do
better for them. Our 4,693 advisers enjoy strong
relationships with clients so they are a key
source of regular feedback. We complement
this through engaging directly via client focus
groups, regular and ad-hoc client surveys,
and targeted market research.
We help you feel confident about your
future by empowering you with clear
financial advice to help you achieve
your personal goals and improve
your financial wellbeing.
How we help our clients move forward
with confidence
Planning for your future can be complicated, especially
during times of investment market volatility, so we
help clients by ensuring they are supported by financial
advisers who can give sound, long-term financial advice.
Our advisers build trusted relationships across family
generations, helping clients support those closest to
them too. We want clients to feel confident in their finances,
so we provide a broad range of products and services to
meet their needs, both for today and for the future. And
we help them to invest for the long term, with an investment
approach that aims to deliver financial wellbeing in a world
worth living in.
917,000
Clients
31 December 2021: 868,000
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Strategic Report
Our stakeholders
Developing
employees
We give you the opportunity to create
the career you want and the confidence
to chart your own career path.
How we help our employees move forward
with confidence
We want to attract, retain and develop the best talent in
the UK. Beyond offering a career with an ambitious and
fast-growing business, we are committed to personal and
professional development, helping our employees achieve
their potential with us. We want an engaged and motivated
workforce, so we work hard to ensure our employees
understand their contribution and feel they’re making
a real difference. We want a diverse workforce, so we’re
always doing more to ensure we’re an inclusive community
where different perspectives are embraced and people
can be themselves. We’re constantly reinforcing our culture
and values so that our employees share a strong sense of
purpose and feel confident they’re part of a business with
real positive impact.
87%
Retention rate
for core UK
employees
2021: 82%
How we engage with our employees
Hearing directly from our employees is very
important in ensuring we have real insight into
how our people are feeling. Frequent one-to-
one, team and divisional meetings ensure
communication is regular and two-way. We
conduct online pulse surveys and monthly
round-table lunches hosted by executive
management and senior leadership, with
feedback and ideas circulated to the Board.
This complements the activity of our Workforce
Engagement Panel, led by Non-executive
Director Lesley-Ann Nash. We’ve also embraced
digital communication platforms.
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Strategic Report
Making a
difference
to society
Our ambition is to be a leading
responsible business in the UK. To us,
this means considering responsible
and sustainable decision-making
in everything we do.
How we help society move forward
with confidence
We play an important role in supporting our clients’
financial wellbeing through the face-to-face advice
provided by the Partnership. In doing so, we have an
opportunity to help address the social, environmental and
economic challenges faced by all in society. So, our aim is
simple: to always act in a way that considers the long-term
needs of our clients as well as the impacts of our actions
on our communities and society at large. First and
foremost, this means delivering great financial advice
to over 917,000 clients. It also means delivering financial
education in schools and other institutions, supporting
charities and the St. James’s Place Charitable Foundation,
and developing an investment proposition that helps
clients align their investments with their values.
Find out more about how we make a difference to
society in the our responsible business section on
pages 34 to 65.
£8.0m
Invested in our
communities
2021: £6.2 million
How we engage with society
To make sure we understand the issues and
topics that matter most to our stakeholders,
our Responsible Business Framework reflects
feedback from both internal and external
stakeholders, is backed by a detailed materiality
study, and measured by clear goals and key
performance indicators (KPIs). These help us
focus and flex our efforts to become a leading
responsible business. We also engage with
industry bodies, regulators and the UK
Government to hone our support – for example
via The Investing and Savings Alliance (TISA)
and the Money and Pensions Service (MaPS).
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Governance Financial Statements Other Information
www.sjp.co.uk
Strategic Report
Our stakeholders
Committing to
shareholders
We offer the opportunity to invest in the
leading wealth management business
in the UK, giving you access to long-term
structural growth through a business that
has sustainable competitive advantage
and a clear direction.
How we help our shareholders move forward
with confidence
We’re already the largest wealth manager in the UK,
and we’ve set out ambitious plans to grow our business
in the years ahead. Reaching £200 billion of FUM by 2025
will not be easy, but we’re confident. Hitting that milestone
will result in significant value creation for shareholders as
we build on our past investment in the business to grow
more efficiently in the years ahead. We’ll do all of this while
making sure we are financially resilient, ensuring we can
continue to invest for the future and provide returns to
shareholders. We’ll also do it responsibly, ensuring we
take leadership on matters most important to us.
£148.4bn
Funds under
management
31 December 2021: £154.0 billion
How we engage with our shareholders
We want to build close and direct relationships
with our shareholders, so they better understand
what we do, and we better understand their
views of SJP. We host regular shareholder
meetings to explain our strategic progress and
corporate performance, and members of the
Board have direct engagement with major
investors. We also commission shareholder
feedback reports with third parties, giving us
valuable and independent insight as well as
an understanding of the issues most material
to our shareholders.
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Annual Report and Accounts 2022
Section 172(1) statement
The Directors have a duty to promote the success of
the Company for the benefit of its members as a whole, having
regard to a number of factors and stakeholders. In accordance
with the requirements of section 172(1) of the Companies Act
2006, a statement providing further information on how the
Directors fulfil this duty is set out on pages 104 to 111 of the
corporate governance report.
Strategic Report
www.sjp.co.uk
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Other InformationFinancial StatementsGovernance
Chief Executive’s report
Another successful year
Introduction
2022 was yet another extraordinary year. The favourable
external environment which emerged towards the end
of 2021, with vaccination programmes in full swing and
economies rebounding strongly, continued into the start of
2022. However macroeconomic and geopolitical conditions
across the globe quickly deteriorated with high inflation,
rising interest rates and the conflict in Ukraine creating
a more difficult backdrop for many investment markets,
companies and individuals worldwide. In the UK this was
compounded by shifting political sands.
Despite this, we achieved the second-best year for new
business flows in our history. This strong outcome once
again demonstrates the strength and resilience of our
advice-led business model, and the enduring commitment
of all in the Partnership to supporting their clients.
Operating and financial performance
After a record outturn in 2021, during 2022 we made further
good progress on our journey to achieving the objectives
we have set out for 2025. We attracted £17.0 billion of
gross inflows in 2022, and our advisers have worked
hard to help clients understand the current environment
and the importance of remaining focused on their long-
term financial goals despite short-term pressures.
This has ensured retention rates for client investments
have remained very high at 96.5%
1
, contributing to net
inflows of £9.8 billion. This is equivalent to 6.4% of opening
funds under management.
The significant falls in investment markets resulted in
funds under management ending the year at £148.4 billion,
down 4% compared to the start of the year.
Despite the high inflation environment, we contained
growth in controllable expenses to 5%, in line with our
guidance. This is one of the drivers behind our strong
financial outcome for the year, with the Underlying cash
result of £410.1 million (2021: £401.2 million) and IFRS profit
after tax of £405.4 million (2021: £287.6 million). For more
information refer to the Chief Financial Officer’s report.
£17.0bn
Gross inflows in 2022
2021: £18.2 billion
96.5%
Retention of client
investments
1
2021: 96.4%
1
Dividend
We are committed to paying out around 70% of the
Underlying cash result in dividends to shareholders.
The 2% increase in the Underlying cash result therefore
drives a proposed final dividend of 37.19 pence per share,
making for a total dividend of 52.78 pence per share for
the year, an increase of c.2% over the 2021 dividend.
Supporting clients
We aim to give clients the confidence to create the
futures they want. In the short term some clients will have
understandably been unsettled by the macroeconomic
conditions that arose during the year, with inflation for
example being higher than many will have seen in their
adult lives. It is in these uncertain times that the trusted
relationship clients have with their adviser really comes into
its own. Advisers have been providing confidence to clients
throughout the year by reassuring them, and ensuring they
understand the environment and wherever possible do not
disrupt their long-term financial plans.
I am thankful to our clients for entrusting their savings to us,
and for endorsing our business through voting for us in
various industry awards.
As we look ahead, a key area of focus for the business
is on progressing our implementation plan for the FCA’s
Consumer Duty, which comes into effect at the end of
July 2023. This is a significant step forward for our industry,
raising the bar to ensure businesses deliver good
outcomes for clients, so we welcome the reform.
Strategic progress
Our 2025 business plan is underpinned by four key financial
objectives, and I am pleased with the progress we have
made on our journey so far. During 2022 we:
delivered £17.0 billion of gross inflows. Two years into our
five-year plan our cumulative gross inflows are ahead of
where we would have expected them to be at the outset.
We aim to grow gross inflows by 10% per annum on a
compound basis, but we were clear from the start that
growth would not be linear;
retained 96.5% of client investments
1
, better than our
95% objective;
contained controllable expense growth to 5% in line with
our target, in spite of the high inflationary environment;
and
achieved funds under management of £148.4 billion.
This is 4% down year on year due to market falls, but
we remain well placed to deliver our £200 billion target
by the end of 2025.
1 Excluding regular income withdrawals and maturities.
16
St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
St. James’s Place has
delivered its second-best
year ever for new
business flows despite
the challenging external
environment.
Andrew Croft, Chief Executive
Why invest in St. James’s Place
Helping you to create your future, your way.
#1
What we are
We are a financially strong, FTSE 100
financial advice business, driving
growth and delivering value for all
our stakeholders.
#4
How we do it
We continue to invest in our technology
and infrastructure, driving efficiency
so we can achieve our growth
ambitions while delivering great
service to our clients and advisers.
#2
What we do
We work in partnership to plan, grow
and protect clients’ financial futures,
delivered by a team of 4,693 highly
skilled advisers within the
St. James’s Place Partnership.
#5
Why we do it
We exist to give our stakeholders
confidence to create the future they
want. We are committed to doing this
responsibly, by putting responsible
and sustainable decision-making
at the heart of everything we do.
#3
Where we’re going
We have a clear strategy to help
us capitalise on the large and
growing opportunity to help more
individuals plan, save and invest for
their future, driving growth in funds
under management.
17
Strategic Report
www.sjp.co.uk
Other InformationFinancial StatementsGovernance
We remain committed to our 2025 ambitions and confident
in our ability to deliver against these; however, inflationary
pressures mean that controllable expense growth in 2023
will be around 8% on a pre-tax basis as we continue to
focus on cost discipline while ensuring our business
remains well invested for the future.
During the year we also made real progress in delivering
against the six business priorities that will underwrite
a successful future for St. James’s Place:
Building community
A thriving SJP community is critical to supporting
great outcomes for our clients and other stakeholders.
We’re therefore pleased to have grown the Partnership
with the addition of a net 137 new advisers during the year,
through a combination of recruitment of experienced
financial advisers and 257 advisers completing our
Academy programme.
With our focus on making SJP the best place to build a
financial advice business, our proposition for advisers is
stronger than ever. This, together with the growing scale of
our Academy which now has more than 350 new advisers
in training, means we’ve built a good pipeline for continued
growth in the Partnership in the years ahead.
Our learning and development programmes for both the
Partnership and employees continue to develop at pace.
Technology has enabled us to create more user-friendly,
on-demand content and to innovate using tools such as
virtual reality to supplement more traditional learning
practices. We are delighted that our progress in learning
and development has been recognised by being short-
listed for six industry awards; most notably the AIXR Global
Virtual Reality Awards for Virtual Reality Education and
Training of the Year.
We see real value in building relationships based on face-
to-face and personal engagement, which was a challenge
during the COVID-19 pandemic. In 2022 we focused on
reconnecting our communities through social engagement.
Being easier to do business with
As a growing business, we know that technology can
streamline and optimise what we do and how we do it,
transforming the experience we give our people and
their clients. We made further progress on our technology
journey in 2022.
We launched a new app for clients, which enables them
to see the value of their investments in real time and offers
ea
sier access to information, documents and insights
that are relevant to them. In due course we will launch
additional functionality, for example enabling clients to
engage with their adviser via the app.
Having rolled out Salesforce to the Partnership in 2021,
during 2022 we launched complementary digital and
social marketing tools for our advisers to use to better
support their clients.
We have also been focusing on our service improvement
programme, as we look to drive higher administration
standards, accuracy and efficiency across our business.
Delivering value to advisers and clients
through our investment proposition
We put our clients at the heart of our business, with the aim
of giving them confidence to create the futures they want.
We deliver this by ensuring clients are supported by great
financial advisers who establish long-term relationships
built on trust, and by creating well-rounded propositions
that meet their needs. The current high inflationary
environment only accentuates the need to get this right.
We continually evolve our investment proposition to ensure
we can support great client outcomes. Changes we have
made in recent years have contributed to further
improvement in this regard.
During 2022 we also launched our new range of
unitised funds-of-funds (Polaris range) for clients in
the accumulation stage of saving, complementing the
unitised InRetirement decumulation funds launched in
2020. The Polaris range is simple for clients to understand
and automatically rebalances funds, removing the need
for periodic manual intervention.
In 2021 we committed to reducing the carbon footprint of
client investments, with an interim target of a 25% reduction
by 2025. We are delighted to have already exceeded this
target. We will continue to work hard with our external fund
managers to make further progress in the years ahead,
underscoring our desire to create financial wellbeing in
a world worth living in.
Chief Executive’s report
18
St. James’s Place plc Annual Report and Accounts 2022
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Building and protecting our brand and reputation
We continue to work hard to strengthen the perception of
our business, so that when people think financial advice,
they think SJP. In 2022 we began the roll-out of our refreshed
brand identity for the Group, which we believe will help drive
better awareness and trust, supporting our ambition to
serve more clients in the future. It is important for us to
complete the roll-out sustainably, without creating waste,
and so we’ve taken steps such as running down stocks of
existing stationery before moving to the new stock.
While we have further phases of the roll-out to implement,
we’re delighted with progress we’ve made so far and the
positive feedback we’ve received from clients, advisers,
and other interested stakeholders.
Our culture and being a leading
responsible business
Our culture is a huge asset and in recent years we have
focused on codifying this in order to preserve its positive
features and to learn where there is scope for further
evolution. It is also important that we recognise and
reward those within our community who exhibit the very
best aspects of our culture. We have developed structures
to achieve this, such as our Impact Awards ceremony
for employees, which launched during the year.
Having developed our Responsible Business Framework
in 2021, in 2022 we focused on enhancing this through
adding clear goals and metrics. Clearly articulating the
outcomes we are striving to achieve will help us grow
the positive impact we can have as a business, and our
metrics will help us to measure our progress. Our goals
are set out in the our responsible business section on
pages 34 to 65, and we will share the metrics in due course.
For us, being a responsible business means focusing
primarily on responsible investment, financial wellbeing,
our community impact, and climate change. But our
responsibilities extend beyond these key focus areas to
others where we must also make sure we’re doing the right
thing – such as being an inclusive and diverse employer,
respecting and valuing human rights, and promoting
responsible procurement.
The most visible aspect of our local activities is our
continued support for the St. James’s Place Charitable
Foundation. This continues to be a source of enormous pride
for all our people, who recognise its hugely positive impact
on the charities it supports. I am therefore delighted that our
community raised a further £10.5 million for the Charitable
Foundation in 2022, inclusive of Company matching.
Continued financial strength
With new business and FUM remaining resilient against the
backdrop of significant macroeconomic and geopolitical
uncertainty during the year, and our disciplined approach
to expenses, we have achieved a record Underlying cash
result of £410.1 million for the year. I am also pleased that
our businesses for the future, SJP Asia and Rowan
Dartington, have been resilient and remain on track
to break even in 2025 and 2024 respectively.
All of this enables our financial model to remain robust.
We are well positioned to continue to invest in our
business to drive future growth and deliver cash returns
to shareholders over time, while ensuring our balance
sheet remains strong.
Summary and outlook
Despite the extraordinary circumstances we found
ourselves in during 2022, I believe SJP had another
successful year and I hope shareholders agree.
This outcome could not have been achieved without
the excellent work and contribution of the whole SJP
community, both here in the UK and in our offices in Asia.
I would therefore like to personally thank our advisers,
their staff, all of our employees and the administration
support teams for their continued hard work, dedication
and commitment.
It remains clear to us that the demand for trusted, face-
to-face advice is only getting stronger, so with a growing
Partnership and a business in great shape, we continue to
be well positioned to capitalise on our market opportunity
and deliver against our 2025 ambitions.
2023 has continued in much the same way that 2022
ended, but we remain encouraged to see indicators that
UK inflation may have peaked and that there are some
signs of optimism for the direction of economies and
investment markets worldwide. As we stated in our new
business update in January, a sustained recovery in such
indicators would naturally be conducive towards improving
consumer sentiment, activity levels and of course funds
under management, as 2023 unfolds.
Andrew Croft, Chief Executive
27 February 2023
19
Governance Financial Statements Other Information
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Strategic Report
Our business model
How we
deliver value
What we do
Clients
We help clients to move
forward with confidence,
creating the future they want.
917,000
Clients
The Partnership
We promote financial advice and
wealth management through the
St. James’s Place Partnership.
4,693
Advisers
St. James’s Place
We support clients and the Partnership, ensuring they
can create financial wellbeing in a world worth living in.
£148.4 billion
Funds under management
We work in partnership to plan,
grow and protect clients’ financial
futures, delivered by a team of
highly skilled advisers within the
St. James’s Place Partnership.
Responsible business
We are committed to being a leading responsible
business, putting responsible and sustainable
decision-making at the heart of everything we do
and helping our clients and communities to move
forward with confidence.
20
St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
We receive We enhance We deliver
We attract
We offer an attractive
investment, product and service
proposition that is exclusive
to the St. James’s Place
Partnership and clients.
+3%
2022 growth in advisers
2021: +5%
Find out more on page 28
We operate a fee-based
income model where
we receive fees based
on the level of client funds
under management.
We help all our
stakeholders to move
forward with confidence
and create the futures
they want.
We have a resilient
business model which
enables us to take
advantage of the
market opportunity.
Annual
management
fee based on
client funds under
management
Client
assets
Financial
advice
Assets
invested
Assets
managed
We impact
We want to be a leading
responsible business that
creates financial wellbeing,
invests responsibly, has a
positive community impact,
and commits to limiting
climate change.
£8.0m
Invested in our communities
2021: £6.2 million
Find out more on page 52
We invest
We are a long-term business
so we plant seeds for the
future through investment in
technology, our operations,
our proposition, and our people.
-4%
2022 reduction in FUM
2021: +19% growth in FUM
Find out more on page 71
We retain
We forge close, trusted
relationships with our advisers,
helping them to run successful
businesses and drive great
outcomes for clients. This means
advisers and clients stay with us.
81%
of clients would recommend
St. James’s Place
2021: 91%
Find out more on page 62
21
Governance Financial Statements Other Information
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Strategic Report
Demand for advice
is increasing
The UK wealth market
Rising affluent wealth
Total UK retail wealth is large and growing. Third parties
suggest that retail liquid assets alone account for some
£3.8 trillion as at the end of 2022 (source: GlobalData).
Individuals in the mass affluent market with around £50,000
to £5 million of investable assets are estimated to control
around 67% of UK investable wealth (source: GlobalData),
and that proportion increases when we think about people
either side of those thresholds who are also in our target
marketplace. We know that the market opportunity is even
greater when we consider personal pension assets and
insurance-wrapped savings.
UK individuals with between £50,000
and £5m of investable wealth
11.26
14.0m
2021 2022
(f)
2023
(f)
2024
(f)
2025
(f)
2026
(f)
13.1m
13.1m
13.5m
13.7m
14.3m
(Source: GlobalData)
Number of retail investment advisers
2013 2014 2015 2016 2017 2018 20212019 2020
21,881
21,496
22,557
25,611
25,951
26,677
27,557
27,501
27,839
Bank and building society
Other
Financial adviser
(Source: FCA)
Household wealth is highest for those with a head of
household aged between 55 and state pension age,
with the median average wealth of those households
approximately 25 times the average wealth of those
with a head of household aged between 16 and 24
(source: Office for National Statistics). This shows the
extent of asset decumulation we can expect in the years
and decades ahead, and the scale of intergenerational
wealth transfer to come.
Increasing demand for financial advice
We estimate that there are approximately 13.1 million
individuals in the mass affluent market in the UK, including
3.7 million who are currently non-advised but are open to
receiving financial advice (source: Royal London – Exploring
the Advice Gap report). Looking more broadly than the
mass affluent market, according to Prudential UK’s Family
Wealth Unlocked report, 53% of UK adults say the financial
crisis caused by COVID-19 has prompted them to seek or
plan to seek advice from a financial adviser.
We know that this is because financial advice creates
real value and helps individuals to feel confident in their
financial futures, which is referenced in research from
the likes of Vanguard, Morningstar and the International
Longevity Centre.
In recognition of this market opportunity we’ve seen many
developments in the DIY investment platform market, as
well as in robo-advice offerings. But demand for personal,
face-to-face advice has continued to grow as people
lacking the time, inclination or confidence to manage
their financial affairs, seek help from a trusted adviser.
We expect demand for face-to-face advice to only
get stronger.
That’s because there are a number of systemic factors
driving the need for advice:
the complexity of personal taxation;
the decline of defined benefit pension schemes;
the options and challenges open to savers through
‘pensions freedom’;
the scale of the UK savings gap; and
intergenerational wealth transfer.
Demand for advice is therefore increasing, but there aren’t
enough advisers in the UK to meet it. The shortfall is likely to
worsen as more and more experienced advisers approach
retirement or sell their businesses: the average age of a
financial adviser in the UK is 58 (source: Professional Adviser).
There’s already an ‘advice gap’ today and we think this
will widen.
Market overview
22
St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
Our UK market
The mass affluent market in the UK
is often defined as individuals with
between £50,000 and £5 million
in investable assets. There were
estimated to be 13.1 million such
individuals at the end of 2022,
and this number is expected
to grow to 14.3 million by the end
of 2026 (source: GlobalData).
The liquid assets of this group
are forecast to increase from
£2.6 trillion to £3.0 trillion in this time
(source: GlobalData). We target the
mass affluent market but also look
after clients either side of this
space, be it individuals in the early
stages of accumulating wealth
or at the other end of the spectrum,
high-net-worth individuals who
need specialist support from
our Private Clients team.
Our FUM compared
to target market
liquid assets
2022
Market size
SJP FUM
£2.6 trillion
£148.4bn
Our clients compared
to individuals in
our target market
2022
Individuals in our core target market
SJP clients
917,000
13.1 million
How SJP can benefit from the market opportunity
We’re the leading advice-led wealth management
business in the UK, with 4,693 advisers at the end of 2022.
We have a proven track record of attracting and retaining
great financial advisers, as well as those looking to build
a new career with us through our Academy programme,
which means our adviser population is growing. Our
advisers have an average age of 46 and so are able to
establish and build long-term relationships with clients.
Those training in our Academy have an average age of 35.
As a result, we are ideally placed to take advantage of the
increasing demand for financial advice.
Competition in the advice market
There is a wide range of different offerings in the UK wealth
management and financial advice industry, ranging from
technology-led solutions to the holistic face-to-face
financial planning and advice service that we provide. In
recent years we have seen an increase in the number of
businesses looking to establish a toe-hold in UK financial
advice, with this interest reflecting the scale of opportunity
in what remains a growing and still under-served market.
We are staunch advocates of the need for individuals
and families to become more financially resilient and more
confident of their futures, but we know that holistic financial
planning advice, delivered by highly qualified professional
advisers, will not be accessible to all. We’re therefore
very supportive of efforts and initiatives, whether led by
companies, regulators or legislators, to help more people
make better decisions around their basic finances.
We have not seen the competitive landscape for our
holistic face-to-face financial planning service change
materially: many of the newer advice offerings that have
emerged in recent times have aimed to support individuals
with more straightforward requirements to save and invest
for the future.
23
Governance Financial Statements Other Information
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Strategic Report
Financial Statements Other Information
Market trends
The UK wealth landscape is evolving, providing opportunities and challenges. We list
below five key trends shaping the UK wealth management landscape of tomorrow.
Market trend Why this is important and our response
#1
Technology: shifting client expectations
and digitally-enabled advisers
Financial advisers are making greater use of digital
solutions to improve client experience and run more
efficient businesses: for example, using digital tools
to help service their clients. Clients are also
embracing technology and are increasingly
expecting companies they interact with to use
data to deliver unique, personalised services.
At SJP we embrace technology to make it easier for
our advisers and clients to do business with us. We
have a modern, scalable back-office administration
system in Bluedoor, and have rolled out Salesforce,
a leading CRM system, across the Partnership. During
2022 we launched the SJP app to a group of clients, so
they can monitor the value of their investments in real
time. In 2023 and beyond we will launch the app to all
remaining clients and enhance its functionality, for
example to enable clients to view documents, send
messages and book meetings with their adviser.
#2
Responsible investment
2022 saw environmental, social and governance
(ESG)-related investment approaches move
further into the mainstream, as consumer demand
for responsible investing continued to increase.
At the end of 2022, retail funds under management
in ESG funds accounted for £91 billion or 6.7% of
the industry, an increase from 5.6% at the end
of 2021 (source: Investment Association). Clients
want to see their investments act as a force for
good, and for wealth managers to be responsible
businesses.
At SJP we recognise the importance of investing
responsibly, and we integrate ESG considerations
into decision-making. We believe that investing
responsibly is key to achieving long-term, sustainable
returns and to delivering financial wellbeing in a world
worth living in; hence it is one of the seven investment
beliefs in our investment proposition. For more detail
on our approach to investing responsibly see pages
43 to 45. We provide our advisers with a suite of tools
to keep them abreast of the latest developments in
this space.
#3
Personal finance complexity
Managing your personal financial affairs is
increasingly difficult: the UK personal taxation
regime is complicated and planning for your
retirement is challenging. Government borrowing
has surged in the wake of the COVID-19 pandemic,
the conflict in Ukraine and the energy crisis, which
means it’s likely there are tax increases to come.
Meanwhile, interest rates are increasing but remain
well below inflation, creating challenges for savers.
At SJP we deliver holistic face-to-face financial
advice via the 4,693 advisers in our Partnership.
They establish long-term, trusted relationships with
clients, understanding each client’s unique financial
situation. Our advisers are highly qualified and we
provide them with detailed technical support, so they
can navigate any complexities a client faces and put
suitable financial plans in place. They also reassure
clients in times of uncertainty, such as the current
macroeconomic environment in the UK, helping them
to manage short-term pressures while maintaining
a long-term mindset.
#4
Decline in the population
of financial advisers
Industry experts predict the adviser population will
decline over the medium to long term as advisers
either retire or sell their businesses due to external
pressures such as increased regulation. Yet there
is growing demand for financial advice, so wealth
managers will need to train new advisers.
At SJP it has been many years since we identified
the need to ‘grow our own’ advisers to achieve our
long-term growth ambitions. As a result, our Academy
was established more than ten years ago, providing
the professional training and experience necessary
to become a successful financial adviser. Of the 4,693
advisers currently in the Partnership, 1,064 have been
trained by the Academy and we have over 350 more
individuals currently in training.
#5
Pensions and intergenerational
wealth transfer
The decline of defined benefit pension schemes in
favour of defined contribution schemes places the
responsibility on individuals, rather than employers,
to provide for their retirement. At the other end of
the scale, young adults entering the workforce are
likely to have lower levels of savings compared to
previous generations due to high housing costs.
This will lead to substantial intergenerational
wealth transfer in the years ahead.
At SJP our advisers help clients plan for their
retirement, ensuring they understand their current
resources and what they need to save to enjoy
their retirement. Beyond retirement, they help clients
plan their estate for intergenerational wealth transfer.
Financial advice is needed by those on the receiving
end of this transfer too, and with 23% of our advisers
appointed in 2022 under the age of 30, this has
helped to attract an increasing proportion of
clients who are also under the age of 30.
Market overview
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St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
Annual Report and Accounts 2022St. James’s Place plc
Our strategy
Implementing our strategy
Our key business aim
We attract, retain and grow client FUM through offering a high-quality
service to the Partnership and clients. We therefore pursue a simple growth
and support strategy, built on clear and focused strategic objectives.
We grow FUM by attracting new client investments to St. James’s Place, and
providing high-quality services to ensure clients stay with us for the long term.
How we achieve this
Our growth strategy
Growing the size of the Partnership
Increasing adviser efficiency
Broadening our client proposition
£17.0bn
Gross inflows in 2022
Our support strategy
Delivering exceptional service to advisers and clients
Driving great client outcomes
Ensuring we remain a trusted, robust
and resilient business for our clients
96.5%
Retention of client investments in 2022
1
Our key aim is to grow our funds under management (FUM) over time.
Our strategy
1 Excluding regular income withdrawals and maturities.
25
Governance Financial Statements Other Information
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Strategic Report
Our business priorities
We focus our long-term business priorities on six core areas. In each of these, we maintain a consistent and rigorous
approach to risk management and governance.
Business priority What this means What we achieved in 2022 Our focus for 2023
Principal risks
and uncertainties
(see page 94)
Responsible
business focus
(see page 35)
Link to executive
remuneration
(see page 151)
Building community
We’ll help every corner
of our growing community
contribute to its success
We welcomed a net 137 new advisers into the Partnership
We made changes to how our field management team support
the Partnership so we’re even better positioned to help Partners
build great businesses and serve their clients
We reconnected the SJP community through face-to-face events
We’ll continue to grow the Partnership,
and improve adviser productivity
We’ll support Academy graduates to
become more productive more quickly
We’ll launch the My House app,
transforming the way we support
learning and development
Partner proposition
People
Financial wellbeing
Community impact
Inclusion and diversity
Responsible
relationships
Net manpower growth
Employee learning
and development
Partner sentiment
Employee engagement
Being easier to do
business with
We’ll invest in technology and
processes that transform the
experience we provide people
We launched the first phases of a new mobile app to a group
of clients
We launched digital and social marketing tools to
complement Salesforce
We continued to work hard on our service improvement
programme with a focus on limiting administration errors
We’ll launch additional functionality
within our next-generation client app,
and extend its availability to all clients
We’ll enhance Salesforce functionality
and embed it across our corporate
functions
We’ll focus on increasing the speed
of administration, and further reduce
our error rate
Administration service
Partner proposition
Financial wellbeing
Client satisfaction
and retention
Data privacy
Responsible
procurement
Administration
performance
Salesforce adoption
Digital client proposition
Client adoption of
digital literature
Operational efficiency
Delivering value to
advisers and clients
through our
investment
proposition
We’ll put the right people, data
and governance in place to
drive performance, delivering
financial wellbeing in a world
worth living in
We continued evolving our investment proposition to support
great client outcomes, with progress set out in our Value
Assessment Statement
We launched our Polaris range of unitised funds-of-funds
for clients in the accumulation stage of their savings journey
We exceeded our interim target of a 25% reduction by 2025
in the carbon footprint of client investments
We’ll focus on further improving
our investment performance and
supporting great client outcomes
We’ll enhance our investment
proposition to ensure it can be scaled
beyond our £200 billion aim for 2025
We’ll continue to grow and raise the
profile of our Private Clients proposition
Client proposition Investing responsibly
Climate change
Client satisfaction and
retention
Value assessment ratings
Delivery of fund changes
Operational excellence
Responsible investment
Building and
protecting our brand
and reputation
We’ll be clearer about who we
are and who we want to be, so
when people think financial
advice, they think SJP
We began the roll-out of our refreshed brand identity
across our business
We increased the cyber resilience of the Partnership
We increased our media engagement, strengthening
our standing with trade and national press
We’ll implement a Group-wide plan
for compliance with the Consumer
Duty regulation
Our refreshed brand identity will be
fully embedded, and we’ll continue
to focus on our reputation
Conduct
Outsourcing
Regulatory
Security and resilience
Strategy, competition
and brand
Financial wellbeing
Climate change
Client satisfaction
and retention
Inclusion and diversity
Policy influence
Risk management
Client sentiment
Brand
Digital marketing
Value of advice
Cyber security
Client complaints
Internal audit, risk
and regulation
Our culture and being
a leading responsible
business
We’ll build a purpose-led
business that has a positive
impact on society
We determined goals, metrics and the target operating
model to accompany our Responsible Business Framework
We launched a new internal reward and recognition scheme,
and held our first Impact Awards ceremony for employees
Our community raised £10.5 million for the St. James’s Place
Charitable Foundation, with Company matching
We were rated AAA by MSCI and Low Risk by Sustainalytics
We’ll educate the SJP community
on our responsible business strategy,
narrative and goals
We’ll focus on the work we are
doing to achieve our inclusion
and diversity ambitions
We’ll continue to focus on limiting
our environmental footprint in all
areas of our business
Client proposition
Outsourcing
People
Regulatory
Strategy, competition
and brand
Financial wellbeing
Investing responsibly
Climate change
Community impact
Responsible
relationships
Inclusion and diversity
Corporate governance
Responsible business
strategy
Net zero commitments
Community impact
Inclusion and diversity
Continued financial
strength
We’ll manage our resources
carefully so we can continue
to grow the investment into
our business
Our new business and FUM were resilient despite significant
macroeconomic and geopolitical uncertainty
We contained growth in controllable expenses to 5%
We achieved a record Underlying cash result, driving
strong dividend growth for shareholders
We’ll aim to achieve further growth
in new business and FUM in support
of our 2025 ambitions
We’ll consider the long-term
interests of the Group and aim to
limit growth in controllable expenses
to 8% pre-tax for 2023, given the
high inflationary environment
Financial Financial wellbeing
Risk management
Responsible
procurement
Partner lending
Capital usage
Regulator relationship
Our strategy
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Our business priorities
We focus our long-term business priorities on six core areas. In each of these, we maintain a consistent and rigorous
approach to risk management and governance.
Business priority What this means What we achieved in 2022 Our focus for 2023
Principal risks
and uncertainties
(see page 94)
Responsible
business focus
(see page 35)
Link to executive
remuneration
(see page 151)
Building community
We’ll help every corner
of our growing community
contribute to its success
We welcomed a net 137 new advisers into the Partnership
We made changes to how our field management team support
the Partnership so we’re even better positioned to help Partners
build great businesses and serve their clients
We reconnected the SJP community through face-to-face events
We’ll continue to grow the Partnership,
and improve adviser productivity
We’ll support Academy graduates to
become more productive more quickly
We’ll launch the My House app,
transforming the way we support
learning and development
Partner proposition
People
Financial wellbeing
Community impact
Inclusion and diversity
Responsible
relationships
Net manpower growth
Employee learning
and development
Partner sentiment
Employee engagement
Being easier to do
business with
We’ll invest in technology and
processes that transform the
experience we provide people
We launched the first phases of a new mobile app to a group
of clients
We launched digital and social marketing tools to
complement Salesforce
We continued to work hard on our service improvement
programme with a focus on limiting administration errors
We’ll launch additional functionality
within our next-generation client app,
and extend its availability to all clients
We’ll enhance Salesforce functionality
and embed it across our corporate
functions
We’ll focus on increasing the speed
of administration, and further reduce
our error rate
Administration service
Partner proposition
Financial wellbeing
Client satisfaction
and retention
Data privacy
Responsible
procurement
Administration
performance
Salesforce adoption
Digital client proposition
Client adoption of
digital literature
Operational efficiency
Delivering value to
advisers and clients
through our
investment
proposition
We’ll put the right people, data
and governance in place to
drive performance, delivering
financial wellbeing in a world
worth living in
We continued evolving our investment proposition to support
great client outcomes, with progress set out in our Value
Assessment Statement
We launched our Polaris range of unitised funds-of-funds
for clients in the accumulation stage of their savings journey
We exceeded our interim target of a 25% reduction by 2025
in the carbon footprint of client investments
We’ll focus on further improving
our investment performance and
supporting great client outcomes
We’ll enhance our investment
proposition to ensure it can be scaled
beyond our £200 billion aim for 2025
We’ll continue to grow and raise the
profile of our Private Clients proposition
Client proposition Investing responsibly
Climate change
Client satisfaction and
retention
Value assessment ratings
Delivery of fund changes
Operational excellence
Responsible investment
Building and
protecting our brand
and reputation
We’ll be clearer about who we
are and who we want to be, so
when people think financial
advice, they think SJP
We began the roll-out of our refreshed brand identity
across our business
We increased the cyber resilience of the Partnership
We increased our media engagement, strengthening
our standing with trade and national press
We’ll implement a Group-wide plan
for compliance with the Consumer
Duty regulation
Our refreshed brand identity will be
fully embedded, and we’ll continue
to focus on our reputation
Conduct
Outsourcing
Regulatory
Security and resilience
Strategy, competition
and brand
Financial wellbeing
Climate change
Client satisfaction
and retention
Inclusion and diversity
Policy influence
Risk management
Client sentiment
Brand
Digital marketing
Value of advice
Cyber security
Client complaints
Internal audit, risk
and regulation
Our culture and being
a leading responsible
business
We’ll build a purpose-led
business that has a positive
impact on society
We determined goals, metrics and the target operating
model to accompany our Responsible Business Framework
We launched a new internal reward and recognition scheme,
and held our first Impact Awards ceremony for employees
Our community raised £10.5 million for the St. James’s Place
Charitable Foundation, with Company matching
We were rated AAA by MSCI and Low Risk by Sustainalytics
We’ll educate the SJP community
on our responsible business strategy,
narrative and goals
We’ll focus on the work we are
doing to achieve our inclusion
and diversity ambitions
We’ll continue to focus on limiting
our environmental footprint in all
areas of our business
Client proposition
Outsourcing
People
Regulatory
Strategy, competition
and brand
Financial wellbeing
Investing responsibly
Climate change
Community impact
Responsible
relationships
Inclusion and diversity
Corporate governance
Responsible business
strategy
Net zero commitments
Community impact
Inclusion and diversity
Continued financial
strength
We’ll manage our resources
carefully so we can continue
to grow the investment into
our business
Our new business and FUM were resilient despite significant
macroeconomic and geopolitical uncertainty
We contained growth in controllable expenses to 5%
We achieved a record Underlying cash result, driving
strong dividend growth for shareholders
We’ll aim to achieve further growth
in new business and FUM in support
of our 2025 ambitions
We’ll consider the long-term
interests of the Group and aim to
limit growth in controllable expenses
to 8% pre-tax for 2023, given the
high inflationary environment
Financial Financial wellbeing
Risk management
Responsible
procurement
Partner lending
Capital usage
Regulator relationship
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Our strategy
Building
community
We’ll help every corner of our growing
community contribute to its success.
Our approach
We know that our people are our greatest asset and
they drive the success of our business for all stakeholders.
Whether it’s our advisers, their staff or our own employees,
we want to build a thriving community of people who can
build great futures with us.
The Partnership
Growing the Partnership means we can help clients
have the confidence to create the futures they want. We’ll
continue to attract experienced advisers to the Partnership
through our traditional recruitment channels, but we’re also
increasing the capacity and capability of our Academy,
which provides the professional training and experience
necessary for individuals to become financial advisers.
137
Net new advisers
welcomed in 2022
2021: 218
Our employees
We want to be an employer of choice within the financial
services sector; one that is able to attract, develop and
retain the best talent in the UK and give our people the
confidence to create the futures they want. We’re doing
more to listen to our employees and understand how
we can build a better business for them, whether through
greater work flexibility, career development, training,
mentoring, reward, and many other areas. Find out more
on pages 57 to 58.
What we achieved in 2022
We’re pleased to have welcomed a net 137 new advisers to
the Partnership in 2022 through both recruiting experienced
advisers and by 257 advisers completing our Academy
programme. With our focus on making SJP the best place
to build a financial advice business, we’ve also built a
good pipeline for continued growth in the Partnership in
the years ahead. We’re making progress on developing
our learning and development capabilities, and we’ve
made changes to how we support the Partnership through
our field management teams so that we’re even better
positioned to help them build great businesses and serve
their clients well. We’re pleased that adviser retention
remained very strong at 93%.
“People are our greatest
asset and they drive the
success of our business
for all stakeholders.”
Iain Rayner, Chief Operating Officer
Reconnecting our communities
We see the value in building relationships based
on face-to-face and personal engagement,
and this holds as true for connecting our
communities as it does for our advisers
engaging with their clients.
After the challenges of COVID-19, we’ve focused
on getting back to building community through
social engagement. In March 2022, we were
delighted to welcome around 3,300 of our
broader SJP community, back to our Annual
Company Meeting at the O2 in London. This kick-
started a programme of engagement across our
community including adviser and employee
events, conferences, and greater opportunities
for networking and collaboration.
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Being easier to
do business with
We’ll invest in technology that transforms
the experience we provide people.
Our approach
As we’ve become a bigger business, we’ve inevitably
become a more complex one, as has the industry we’re a
part of. This can create challenges across our community,
whether for clients, advisers, their staff or our employees.
Processes can be fragmented, experiences therefore
diminished and inefficiencies compounded, so in our
2025 plan we’re addressing this.
We’re removing processes we don’t need any more,
decommissioning systems we’ve outgrown or which
have become obsolete, and setting high standards for
the providers we work with. Business improvement teams
will identify opportunities to simplify and streamline what
we do. Experts in robotic process automation will look
for ways to automate tasks and therefore enhance
the accuracy of processes. We’ve already automated
hundreds of tasks and we’re looking for opportunities
to take this further. With Bluedoor and Salesforce as the
backbone of our technology ecosystem, we can continue
to decommission legacy systems and improve how we
do things. As we bring on board new service providers,
or renew contracts with existing ones, we’ll integrate
our systems seamlessly with theirs, with interfaces that
communicate with each other automatically in real time.
We’ll create a new ‘hub and spoke’ operating model for
managing our data, pushing data expertise as close
as possible to the Partnership.
What we achieved in 2022
We made further progress on our technology journey
in 2022. Having rolled out Salesforce across the Partnership
in 2021, we spent 2022 launching complementary digital
and social marketing tools for our advisers to use to better
support their clients. We also launched the first phases
of our new client mobile app to a group of clients as part
of our programme to enhance client user experience,
and we’ve worked hard on our service improvement
programme to raise client and adviser service standards.
Using technology to enhance
client experience
With a strong technology ecosystem now in
place, we’ve been able to develop and launch
a new client-facing app. The app, which is
optional for clients, enables them to have a
mobile view of their investments with SJP and
offers easy access to information, documents
and insights that are relevant to them. It will
also enable clients to engage with their
advisers via the app, enhancing and
strengthening the trusted relationships our
advisers already enjoy with their clients.
“Bluedoor and Salesforce
are the backbone of our
technology ecosystem
and enable us to improve
how we do business.”
Ian MacKenzie, Chief Operations & Technology Officer
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Our strategy
Delivering value to advisers
and clients through our
investment proposition
We’ll put the right people, data
and governance in place to drive
performance, delivering financial
wellbeing in a world worth living in.
Our approach
We’re focused on giving clients the confidence to create
the futures they want by planning, growing and protecting
their wealth over time. We take an approach to investment
management that gives clients diversification and expertise
on a global scale that is beyond many wealth managers.
We design and build our own range of investment funds
and portfolios, but we contract some of the world’s best
external managers to manage them. We also offer our
clients discretionary fund management and stockbroking
services, giving them even greater choice and flexibility
in how to manage their investments.
We’ve established a team of over 40 investment
professionals, who are supported by a panel of investment
advisers, to focus on the performance of our funds and
portfolios. Their work is underpinned by best-in-class data
and technology solutions, and a governance structure
that’s designed to support well-informed decision-making.
What we achieved in 2022
We’re always evolving our investment proposition so that
we can support great client outcomes, which is our first
investment belief and the starting point for everything we
do. Changes we’ve made in recent years have contributed
to further improvements and these are reflected in the
progress outlined in our latest annual Value Assessment
Statement. We continue to evolve our range of funds,
including the launch of our Polaris range of fund-of-funds
for clients in the accumulation phase of their savings
journey, and made changes to existing funds including
our Global Growth and Emerging Markets funds.
We’ve also made further good progress in reducing the
carbon footprint of client investments, having already
exceeded our interim target of a 25% reduction by 2025.
“Our investment proposition
is built to support great
client outcomes.”
Tom Beal, Investments Director
Launching our Polaris funds
The introduction of the Polaris range, to sit
alongside our InRetirement range, completes
a suite of fund-of-funds solutions that are at the
core of our investment proposition.
Designed to offer a simple solution for clients
looking to grow their wealth over time, our four
Polaris funds offer fund-of-funds solutions for
clients in the accumulation phase of their life.
These automatically rebalanced funds are
engineered to be globally diversified, using the
optimal blend of strategies to achieve the most
suitable range of risk for clients across the risk
spectrum. These funds complement our existing
solutions, giving clients access to even more choices.
4
Solutions
within the
Polaris fund-
of-funds range
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Building and protecting
our brand and reputation
We’ll be clearer about who we are
and who we want to be, so when people
think financial advice, they think SJP.
Our approach
Our brand is the sum of all the thoughts and associations
people have when they hear the name ‘St. James’s Place’.
We want our brand to attract people to us – making them
more likely to choose us, partner with us or work for us.
‘Project Brand’ began in 2020 aiming to create a clear,
compelling and robust positioning for SJP, giving our
clients the confidence to create the future they want.
Our refreshed brand is how we look, how we sound,
and what we say. Thinking clearly about these elements,
and protecting them, creates a stronger brand that will
stand the test of time.
Through our refreshed brand, we will build our reputation as
a strong and responsible business that is trusted, considered,
and recommended. Our brand is an organising principle
that enriches the adviser and client experience across
every touch point, and attracts and retains talent within
the SJP community, reinforcing cultural change priorities.
So when people think of financial advice, they think SJP.
What we achieved in 2022
During the year we began the roll-out of our evolved
brand identity across our business. We committed to
doing this sustainably, without creating waste. For example,
we’ve run down stocks of existing stationery before moving
to the new stock. We have launched a refreshed corporate
website, and updated websites for each of our Partner
businesses. We have continued to build and strengthen
our relationships with journalists, and increase our
visibility in the media. This has resulted in improving
media sentiment in 2022, as people better understand
who we are and what we do.
Addressing cyber risk
in the Partnership
We recognise that cyber risk continues to
develop apace, particularly with the threat
of State-sponsored cyber attacks. To help
ensure our Partner practices are well protected
and able to keep our clients’ data safe, during
2022 we asked all Partner practices to gain the
Cyber Essentials Plus external accreditation.
This could either be sought directly through
demonstrating the robust nature of their cyber
security systems, or by using our ‘Device as a
Service’ (DaaS) scheme. Through DaaS,
advisers can acquire SJP technology which has
been certified to Cyber Essentials Plus standard.
“A strong brand enables
those experiencing it to
feel a human connection
and establish a lasting,
personal relationship.”
Claire Blackwell, Chief Client & Reputation Officer
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Our strategy
We’re committed to being a purpose-
led business that has a positive impact
on society.
Our approach
Our culture is one of our biggest strengths and is
fundamental to our success. The values and behaviours
we share help us to embrace change, manage resources
effectively, and make our business less complex. We’re
having regular conversations about culture across the
SJP community – to celebrate when we get things right
and challenge ourselves where we need to improve.
Behaving responsibly is a key part of our culture that
touches every part of our business. It’s a philosophy that
helps to inform our decisions and how we run our business.
This is important as we believe tomorrow’s clients, advisers
and employees will increasingly want to buy from, work
with, and work for a company that understands its
responsibility to society. When it comes to financial
wellbeing, we’re in a great position to help tackle some of
the problems facing society today – from the retirement
savings gap to the long-term care crisis and gender
inequality in pensions.
What we achieved in 2022
In 2022 we focused on developing our Responsible Business
Framework with clear goals and KPIs. Clearly articulating
the outcomes we are striving to achieve will help us grow
the positive impact we can have as a business, and our
metrics will help us to measure our progress along the way.
We’ve also continued to shine a light on our culture and
how it is embraced by our people with new rewards and
recognition, including our first-ever employee Impact
Awards. We gained great recognition for our progress in
developing our approach to responsible investing as a
signatory of the Stewardship Code. And the work of the
St. James’s Place Charitable Foundation continues to be a
huge source of pride. We’re delighted that our community
raised £10.5 million during the year with Company matching.
The St. James’s Place Charitable Foundation is now the
third largest Corporate Foundation
1
.
“Behaving responsibly
is a key part of our culture
that touches every part
of our business.”
Liz Kelly, Chief Corporate Affairs & People Officer
Our culture and being a
leading responsible business
Reducing the carbon footprint
of client investments
Climate change is one of the most significant
global challenges we face today. We believe we can
have the greatest impact on climate change through how
we invest our £148.4 billion of funds under management,
and so in 2021 we committed to reducing the carbon
footprint of client investments, with an interim target
of a 25% reduction by 2025.
We are delighted to have already exceeded this target, in
large part due to changes we’ve made to our funds in recent
years. We will continue to work hard with our external fund
managers to make further progress in the years ahead.
25%
Target reduction in
the carbon footprint
of client investments
from 2019 to 2025
1 Association of Charitable Foundations, Giving Trends 2021.
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We’ll manage our resources carefully so
we can continue to grow our investment
into our business.
Our approach
We have a straightforward financial business model. We
generate revenue by attracting clients through the value
of our proposition. They trust us with their investments and
then stay with us. This grows our funds under management
(FUM), on which we receive product management charges.
This income is then used to meet our overheads, invest in
the business and pay dividends to our shareholders.
We’re financially prudent and we make sure that
we’re always holding assets to fully match our clients’
investments. This, and the simplicity of our business model,
means we have a resilient capital position capable of
meeting our liabilities even in adverse market conditions.
Our ambitions
We’ve set ambitious financial objectives through to 2025.
We want to build FUM to £200 billion and we’ll do this by
growing new client investments by 10% per annum on
average over that period, and by retaining 95% of existing
investments every year. We believe these growth ambitions
are achievable given the market opportunity, the quality
of our proposition and the strength of the Partnership,
although growth in gross inflows will not be linear.
We’ve also set out a financial envelope for how we manage
our resources over time, with the aim of containing annual
growth in controllable expenses
1
to 5%. This will not be easy
but we believe it’s achievable in the medium term. In the
short term, the impact of high inflation means we expect
growth in controllable expenses to be 8% on a pre-tax basis
for 2023. The investments we’re making in how our business
runs will allow us to work more efficiently. Better data, better
systems and more automation will mean more control,
fewer errors and less waste. We can grow our business
more efficiently and we can prioritise strategic investment.
1 Controllable expenses are an alternative performance measure (APM).
For further information refer to the glossary of APMs on pages 272 to 274.
8%
Aim to contain growth in pre-tax
controllable expenses to 8% in 2023
2022: 5%
Continued financial
strength
Gestation: driving growth
in our future cash flows
Annual product management charges are our
key profit driver. However, these are not taken for the
first six years for investment and pension business.
Business in this six-year period is known as ‘gestation
FUM’, and for this period it contributes nothing
to the Cash result apart from a day one margin
arising on new business.
Gestation FUM is a very significant store of value and
gives a high degree of visibility to the emergence of
additional cash flows. Based on current market levels
and assuming no withdrawals, gestation FUM at
31 December 2022 would contribute £383.5 million
per annum to the Cash result once it is all out of the
first six-year period, including £47.9 million over 2023.
This contribution comes at no additional expense.
“Gestation is a concept
unique to SJP, and a really
positive differentiator.”
Craig Gentle, Chief Financial Officer
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At SJP, our ambition is to be a leading
responsible business in the UK. To us,
this means considering responsible
and sustainable decision-making in
everything we do.
Being a responsible business marries our long culture
of giving back with our clear purpose to help our clients
and community embrace their tomorrow and create the
futures they want. In this section of the Annual Report and
Accounts we discuss our approach and impact on the
long-term wellbeing and resilience of individuals,
communities, the environment and society.
Our approach
As a FTSE 100 company with £148.4 billion of funds under
management, we recognise the impact and influence
we can have, and our responsibility to use this positively.
Our ambition to be a leading UK responsible business is
a long-term aspiration. It requires us to have a deep
understanding of the topics most material to us, clearly
articulated goals, the right processes to operationalise
for success, and metrics that provide transparency on our
progress. This journey will take time and involve continuous
focus and review as our plans evolve. The external
environment is changing rapidly and what might be
perceived as ‘leading’ today is unlikely to stay the same
for long. Being a leading responsible business is a state
of mind, not a destination; whilst we don’t claim to have
all the answers, we are committed to our ambition –
to understand the role we can play, make real progress
and bring others with us on the journey.
Journey to date
In 2021, we set the aspiration to be a leading UK responsible
business, identified the topics most material to us and
developed our Responsible Business Framework (hereafter
our Framework) to give structure to our approach.
Working in collaboration with stakeholders across the
business and with the support of external consultants,
in 2022 we then set initial goals and metrics for each of
the topics within our Framework, drawing together existing
measures and developing new goals where we want
to drive progress. Alongside this we mobilised our new
Responsible Business Advisory Group
1
to lead and report
on our progress.
Agreeing our goals and metrics brings our Framework to
life and gives us tools to better measure our performance
from 2023, helping us tell our story and supporting our
stakeholders to understand our progress. While we are
not yet ready to share our metrics, you will see our goals
throughout this section.
In October 2022, our approach was recognised at the
Global Good Awards where we were awarded Gold for
‘Global Good Company of the Year’.
“Striving to be a leading responsible business is a continuous
journey for us. We know there is more work to do, but it was
heartening to be considered alongside so many brilliant
businesses making their work a force for good.”
Vicki Foster, Divisional Director, Responsible Business
Our responsible
business
What’s inside?
Our responsible business 34
Financial wellbeing 40
Investing responsibly 43
Climate change 46
Community impact 52
Strategic enablers 57
1 The Advisory Group has representation from all areas of our business and will report regularly to our Executive Board and Group Risk Committee.
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Leading the conversation
on investing responsibly
With £148.4 billion of funds under management,
we are committed to using our scale and
influence to lead the conversation on
investing responsibly. We do this through
fund manager engagement, our
commitment to the UN Principles
for Responsible Investment, our
membership of the Net-Zero
Asset Owner Alliance, and
our education for clients
on how to use money
as a force for good.
Page 43
Giving back to support local
communities and regeneration
Giving back is in our DNA; from our founding
days we have looked beyond ourselves to make a
difference to those less fortunate. We are committed to
driving positive community impact, building social capital
within communities, and connecting the dots between the
charities we support and the social initiatives we run, by
offering place-based and skills-based outreach.
Page 52
Enhancing financial wellbeing for our
clients, our people and our communities
As a leading UK financial advice business, we
are committed to enhancing financial
resilience and confidence in all our
communities, from our clients to
the charities we support, and from
primary school children to those
most vulnerable in society.
We do this through providing
sound financial advice
and delivering
financial education.
Page 40
Taking action on
climate change
Some of the issues facing our
world today can feel overwhelming,
but solving them involves everyone
playing their part. We are committed to
doing what we can to tackle climate
change through our operations, supply chain
and investment management approach.
Our approach to reaching net zero includes
educating our community on climate change,
embedding environmental considerations into
decision-making and conserving resources – not only
to reduce our impact, but also have a positive one.
Page 46
St. James’s Place Responsible Business Framework
Strategic enablers
Bringing together material topics that enable
our business to function and grow sustainably.
People
Responsible relationships
Inclusion and diversity
Policy influence
Client satisfaction and retention
Page 57
Governance
Corporate governance
Risk management
Data privacy
Responsible procurement
Human rights
Page 63
Financial
wellbeing
Climate
change
Community
impact
Investing
responsibly
Vision
Purpose
Culture
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Other InformationFinancial StatementsGovernance
United Nations Sustainable Development Goals (UNSDGs)
In 2020, we became a participant of the United Nations Global Compact, with the ambition to further embed those UNSDGs
most relevant to our business into our long-term approach.
Within our Responsible Business Framework, our material topics each contribute to progress against the UNSDGs.
We believe we can have the greatest impact on the six UNSDGs listed below.
SDG Our promise and progress
Target 4.4
By 2030, substantially
increase the number
of youth and adults
who have relevant skills,
including technical
and vocational skills
for employment,
decent jobs and
entrepreneurship.
Our promise
To improve money management in the next generation by supporting schools and other organisations
to deliver financial education to children and young people. Alongside this, we aim to provide our advisers
with the resources and knowledge to teach financial education.
To provide relevant financial skills and education to our clients to give them the confidence to create the
future they want.
Our progress
Most notably in 2022, we launched a strategic partnership with national charity Young Money, sponsoring
the development of 21 ‘Centres of Excellence’ over the next three years, equipping schools – predominantly
in areas of deprivation – to deliver a robust financial education curriculum.
Target 5.5
Ensure women’s full and
effective participation
and equal opportunities
for leadership at all
levels of decision-
making in political,
economic and
public life.
Our promise
To ensure equal opportunities for women through our inclusion and diversity programmes and by ensuring
we align to national commitments.
Our progress
In 2022, we continued to make progress against our commitments to increasing gender and ethnicity
representation in our employee base, aligned with the Women in Finance and Race at Work charters.
We also continued our commitment to mentoring, completing our fifth year with the 30% Club cross-sector
mentoring programme supporting female development, organising nine months of senior mentoring for
minority ethnic employees and members of the Aleto Foundation, and completing the second year of
our in-house mentoring programme for talented women in the pipeline for senior roles. This programme
supported 50+ women with mentoring by senior leaders as well as providing access to masterclasses
and psychometric profiling.
Target 8.5
By 2030, achieve
full and productive
employment and
decent work for all
women and men,
including for young
people and persons
with disabilities, and
equal pay for work
of equal value.
Our promise
To invest in our employees through training and development.
To increase the aspirations of young people by working with schools and charities to support employability
and provide positive work experiences. As part of our social mobility strategy, we actively seek to support
disadvantaged young people into financial services careers.
Our progress
In 2022, we continued to enhance our development offering, working to create virtual reality learning
and delivering pathway learning through interactive, digital curricula.
We also worked with the Aleto Foundation to sponsor a three-day minority ethnic leadership programme,
providing Aleto alumni and SJP employees with skills workshops and an innovation challenge, the results
of which were presented to a panel of SJP senior leaders including CEO Andrew Croft.
How we measure our progress
We want to make it easy for all our stakeholders to understand the work we’re doing
and how we’re measuring our performance. We are aligning our approach to key
external frameworks which help broaden our impact.
Our responsible business
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St. James’s Place plc Annual Report and Accounts 2022
Strategic Report
SDG Our promise and progress
Target 9.2
Promote inclusive
and sustainable
industrialisation and, by
2030, significantly raise
industry’s share of
employment and gross
domestic product,
in line with national
circumstances,
and double its share
in least developed
countries.
Our promise
To encourage responsible practice among our suppliers and fund managers in the areas of environmental
impact, societal impact and governance.
To support our Partner practices in operating responsibly and aligning to national standards.
Our progress
In 2022, we continued to highlight ESG considerations in our due diligence and conversations with suppliers,
and within our investment management approach. We also influenced industry participants to use
client-friendly terminology, working closely with the collaborative industry body The Investing and Saving
Alliance (TISA).
Following the launch of our Framework in 2021, we built support for Partner practices on how to develop
their own responsible business approach, and provided tailored consultancy as well as producing tools
and sharing knowledge, for example by running a national panel for peers to share best practice.
Target 10.2
By 2030, empower
and promote the social,
economic and political
inclusion of all,
irrespective of age,
sex, disability, race,
ethnicity, origin,
religion or economic
or other status.
Our promise
To support the St. James’s Place Charitable Foundation, through funding and volunteering, as its grants
support charities that reduce social inequality and promote economic inclusion.
To support employability programmes throughout our business.
Our progress
In 2022, the SJP community raised £10.5m for the Charitable Foundation, which in turn distributed £10.1m to 853
charities, supporting social mobility both in the UK and overseas. We also continued our strategic partnership
with the Duke of Edinburgh (DofE) Award (see page 54).
As well as our Aleto leadership programme for minority ethnic employees and Aleto alumni, we ran our
Futures in Finance initiative for the second year, and continued to build on our inclusion and employability
partnerships including The Diversity Project, LGBT Great, Stonewall, The Valuable 500, the Aleto Foundation,
Progress Together, the Business Disability Forum and Disability Confident.
Target 13.2
Integrate climate
change measures
into national policies,
strategies and planning.
Our promise
To control and reduce our environmental impact and promote sustainable business practices.
Our progress
Notably in 2022, we built a carbon conservation measure tracker to better understand existing energy
usage across our corporate estate, allowing us to make recommendations for optimisation and identify
opportunities for carbon reduction in support of corporate targets.
We also signed up to the Financial Reporting Council’s UK Stewardship Code, joining 235 other signatories
adhering to high standards for the responsible management of capital. The aim is to not only create
long-term value for clients, but also support sustainable benefits for the environment, economy and
society by taking ESG factors, including climate change, into account when making investment decisions.
Memberships and partnerships
Strategic partnerships and collaboration are essential to driving meaningful change and contributing to greater progress.
As well as aiming to report in a way consistent with our industry, we are also proud to be members and supporters of many
organisations driving change, including those shown below.
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Sustainability Accounting Standards Board
We’re pleased to continue to align our reporting to the Sustainability Accounting
Standards Board (SASB) framework for our industry. The standards offer a consistent
method of reporting and we engage with the framework for the benefit of all our
stakeholders, sharing sustainability data in a consistent and transparent way.
Given our focus on wealth management we have responded to the reporting standards
for Asset Management & Custody Activities.
Topic Accounting metric 2022 status Code
Transparent
Information & Fair
Advice for
Customers
(1) Number and (2) percentage of covered
employees with a record of investment-
related investigations, consumer-initiated
complaints, private civil litigations, or other
regulatory proceedings
We publish complaints data half-yearly which
can be found on our website at www.sjp.co.uk/
site-services/how-to-make-a-complaint.
We do not currently publish further information.
FN-AC-270a.1
Total amount of monetary losses as a
result of legal proceedings associated with
marketing and communication of financial
product related information to new and
returning customers
We do not currently publish this. FN-AC-
270a.2
Description of approach to informing
customers about products and services
Before any advice is provided, our advisers must
inform clients about the products and services
we offer. This is a closely regulated area in the UK
and we are fully compliant. We publish numerous
supporting documents, available on our website.
FN-AC-
270a.3
Employee Diversity
& Inclusion
Percentage of gender and racial/ethnic
group representation for (1) executive
management, (2) non-executive
management, (3) professionals, and
(4) all other employees
This data breakdown can be found on pages 59
and 60.
FN-AC-330a.1
Incorporation of
Environmental,
Social, and
Governance
Factors in
Investment
Management
& Advisory
Amount of assets under management, by
asset class, that employ (1) integration of
environmental, social, and governance (ESG)
issues, (2) sustainability themed investing,
and (3) screening
1. 100% of SJP manufactured funds.
2. 3% (Sustainable and Responsible Equity Fund).
3. Our general approach is for engagement
rather than divestment with companies to drive
positive change. We have an exclusions policy
which covers all of our manufactured funds.
FN-AC-410a.1
Description of approach to incorporation
of environmental, social, and governance
(ESG) factors in investment and/or wealth
management processes and strategies
Responsible investing is a defining characteristic
of our investment approach and is an important
component in creating long-term value for our
clients.
Our approach to responsible investing can be
found on our website at www.sjp.co.uk/products-
and-services/investment/responsible-investing.
FN-AC-410a.2
Description of proxy voting and investee
engagement policies and procedures
Details on proxy voting are publicly disclosed
in our:
Stewardship and Engagement Report
Stewardship, Engagement and Shareholder
Voting Policy
These and further statements can be found on our
website at www.sjp.co.uk/products-and-services/
investment/responsible-investing.
FN-AC-410a.3
Our responsible business
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St. James’s Place plc Annual Report and Accounts 2022
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Topic Accounting metric 2022 status Code
Business Ethics
Total amount of monetary losses as a result
of legal proceedings associated with fraud,
insider trading, anti-trust, anti-competitive
behaviour, market manipulation,
malpractice, or other related financial
industry laws or regulations
Fraud:
There have been no losses that fall within the
definition of ‘legal proceedings’ outlined in the
SASB criteria.
We hold data on monetary loss in respect of
fraud, but this is categorised as a ‘loss’ due to
our corporate decision to reimburse our clients
for any losses suffered as a result of fraud.
The frauds generally materialise as a result of
adviser negligence, premeditated intent or a
mistake at one of our administration centres
and so we feel duty bound to reimburse.
This data is not disclosed publicly.
Malpractice:
We currently hold data on the monetary losses
accrued in respect of claims brought against SJP
by clients for negligent financial advice provided
to clients by our advisers.
We do not disclose this publicly, and some litigation
claims have strict non-disclosure agreements.
We are not currently aware of any litigation in
relation to anti-trust, anti-competitive behaviour
or market manipulation that we would be required
to disclose.
Insider trading:
Metric currently not held or disclosed.
FN-AC-510a.1
Description of whistle-blower policies
and procedures
We maintain robust whistleblowing policies and
procedures, overseen by our Whistleblowers’
Champion, which enable members of our internal
community and those external to the Group to
raise any concerns about wrongdoing connected
to SJP. Our employees receive regular training
on whistleblowing arrangements.
The whistleblowing policy can be found on our
website at www.sjp.co.uk/about-us/corporate-
governance.
FN-AC-510a.2
Activity
(1) Total registered and (2) total unregistered
assets under management (AUM)
(1) £0
(2) £148.4 billion
The majority of AUM is retail unit trusts authorised
by the FCA in the UK, with the balance primarily
being insurance company assets.
FN-AC-000.A
Total assets under custody and supervision Our closing 2022 funds under management stood
at £148.4 billion.
FN-AC-000.B
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Strategic Report
Financial wellbeing
Enhancing financial wellbeing for our clients,
our people and our communities.
Helping our clients create the futures
they want through sound, empathetic
and personal financial advice is our
very purpose.
As a leading UK financial advice business, we are
committed to enhancing financial resilience and
confidence for our clients through face-to-face financial
advice provided by expert financial advisers (our
Partnership). We believe in the importance of long-term
relationships built between our advisers and their clients.
These relationships are built on mutual trust, enabling our
advisers to gain a deeper understanding of their clients’
future aspirations and long-term goals. We take the same
holistic approach in how we support our wider
communities, from the school children we provide with
financial education to the charities we engage with, and
how we help those most vulnerable in society.
We take action in line with this philosophy. For example, in
2022, we grew our podcast series focusing on experts who
have experienced vulnerability.
As part of our wellbeing initiative and tackling cost-of-living
issues, we also launched a ‘Resilience in a Changing World’
podcast to help individuals find their way through
challenging periods and build robust strategies to navigate
financial, emotional and societal issues.
As a research initiative, we launched the Finance in Society
Research Institute in collaboration with the University of
Gloucestershire, to advance high-quality collaborative
personal financial research and provide technical and
policy advice to organisations and government.
Our goals
1.
Enhance clients’ long-term financial
wellbeing through face-to-face financial
advice delivered by qualified, expert advisers.
2.
Help to improve long-term financial resilience
in society by providing financial education in
schools and to charities.
3.
Enhance the long-term financial resilience
of employees through education and access
to advice.
Our responsible business
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Facing societal challenges
We know financial wellbeing is a key component of a
healthy and thriving society. When we talk about financial
wellbeing, we mean the feeling of being financially confident,
resilient and prepared for the future. 2022 was a critical
year in highlighting the importance of financial confidence,
resilience and wellbeing, with the cost-of-living crisis, rising
inflation and soaring energy bills hitting the UK. Knowing
how to grow and protect your finances is complicated and
the risk of getting it wrong is high, so advice from a trusted
professional can help people make better choices for the
future. This is at the heart of what we offer our clients and our
communities: the confidence to create the future they want.
In 2022, we aligned our approach to helping improve
financial wellbeing in society with the UK Government’s
Money and Pensions Service (MaPS) strategy. This
highlighted the need for increased financial wellbeing
across the UK to enable individuals to make more informed
financial choices. Our strategy draws together a range
of financial wellbeing programmes, from our core advice
proposition to workplace sessions, financial education
in schools, support for military veterans and our developing
propositions for female and LGBT+ investors. In addition
to this, our Insights programme of content and
communications provide both clients and the public with
information to improve financial wellbeing and understand
the benefits of taking advice. We believe everyone should
have access to information to make their own informed
choices and increase their financial literacy, confidence
and resilience.
1,081
Number of Chartered
Financial Planners within
the SJP community in 2022
2021: 1,000
Working with our clients
We reached 1,081 Chartered Financial Planners within
our community in 2022 (2021: 1,000)
We have continued to build on the popular podcast
series focusing on experts who have experienced
vulnerability
We launched a ‘Resilience in a Changing World’
podcast to help individuals find their way through
challenging periods
We supported the financial wellbeing of our 917,000 clients
through our ongoing advice model – enabling them to set,
review and achieve not only their financial goals, but the
futures they want through sound financial advice. We know
that client financial wellbeing is improved when people
realise the value of the advice they are receiving: increased
financial literacy, increased confidence, increased peace
of mind, generated through a tailored solution and
progress towards financial returns.
In October 2022, we created a new suite of marketing
materials to help our advisers raise awareness among
both existing clients and prospects that expert, face-to-
face advice can support their wellbeing by helping them
feel confident, capable and in control of their finances.
The financial wellbeing portal which hosted the new
materials was accessed by over 500 advisers and there
were 1,000+ downloads of the new materials. We also
shared financial-wellbeing-themed articles, videos and
infographics via our corporate SJP social media accounts
and these posts collectively had over 47,000 impressions
and 1,500 engagements.
917,000
Clients we helped achieve financial
wellbeing for in 2022
2021: 868,000
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Broadening our impact in the community
We supported the delivery of financial education to
5,825 young people in 2022 (2021: 12,881 young people)
We gave £216,530 in grants to charities to support
financial education activity in 2022 (2021: £57,500)
We supported the launch of the Finance in Society
Research Institute with the University of Gloucestershire
Looking beyond our client and employee communities,
we know that greater financial literacy benefits society
as a whole, so we’re also committed to providing financial
education to school children and young adults, and
making financial advice more accessible to people
from all walks of life.
In 2022, we reached a total of 5,825 young people with our
financial education programmes, delivered by our advisers
and employees to schools, community groups and in areas
of deprivation. We helped 3,968 young people through
face-to-face and virtual workshops led by employee and
adviser volunteers, and 1,857 by providing resources and
funding to schools and charities. Our workshop materials
have been through an extensive accreditation process with
the charity Young Money, in association with the Money and
Pensions Service (MaPS), to maintain their FE Quality Mark.
We have also continued to extend our reach and impact
by providing grants to, and building relationships with,
charities including Young Enterprise, RedSTART, The Money
Charity, National Numeracy, the Centre for Financial
Capability, Help for Heroes and Forces MoneyPlan.
Building on our existing approach, in 2022, we were
delighted to announce a new corporate partnership with
national charity Young Money, a subsidiary of Young
Enterprise. We have committed to sponsoring 21 school-
based centres of excellence over the next three years,
working with Young Money to equip schools to deliver
a robust financial education curriculum.
Our sponsorship will fund one-on-one advice from an
expert education consultant, staff training and access to
financial education resources for each school. In addition
to this funding, each school will work with an SJP location
to understand what additional support might be useful –
for example, financial education sessions for students
or teachers, work experience opportunities, mentoring,
volunteering and more. As we move through the
partnership, both SJP employees and members of the
Partnership will build relationships with the schools and
their pupils by contributing their skills, expertise and time.
Working with our employees
We launched our refreshed employee financial
wellbeing strategy
Throughout 2022, we refreshed our support for employees
with a new financial education and wellbeing programme
launched in November. Collaborating with experts across
our business, our financial toolkit helps all our people
understand and manage their finances no matter their
background. The toolkit includes a series of seminars,
videos and podcasts designed to empower informed
decisions. Content was created following direct
engagement with employees, helping to ensure our
support best meets their needs.
£216,530
Grants given to charities to
support financial education
activity in 2022
2021: £57,500
“Financial wellbeing is about feeling secure and in control.
It is knowing that you can pay the bills today, can deal with
the unexpected, and are on track for a healthy financial
future. In short: confident and empowered.”
Defining financial wellbeing – MaPS
Our responsible business
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Investing responsibly
Leading the conversation on investing responsibly.
With £148.4 billion of funds under
management, we are committed to
using our scale and influence to lead
the conversation on investing responsibly.
We do this through fund manager
engagement, our commitment to the UN
Principles for Responsible Investment, our
membership of the Net-Zero Asset Owner
Alliance, and our education for clients on
how to use money as a force for good.
Our net zero targets
2022 saw the start of an unprecedented energy crisis in
the UK. This has led to greater recognition from businesses
that energy sources need to be diversified, which includes
moving towards renewable options.
This year we’ve continued our journey to becoming
net zero in our investment proposition by 2050. In 2021 we
set an interim target of achieving a 25% reduction in the
carbon emissions of our investment proposition
1
by 2025,
compared to 2019. We are delighted to have already
exceeded this target, and we will continue to work hard
with our external fund managers to make further progress
in the years ahead. More details on our progress can be
found in our annual Portfolio Carbon Emissions Report:
www.sjp.co.uk/responsible-investing/sjp-carbon-
report-2022.
Our goals
1.
Net zero in investments by 2050.
2.
Embed responsible investing within our
investment processes and use our influence
to maximise impact.
3.
Have a complete responsible investment
proposition and supporting education
programme for advisers and clients.
1 In line with our Net-Zero Asset Owners Alliance commitment,
the asset classes in scope for this target are public equity,
publicly traded corporate debt and real estate.
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Other Information
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Embedding responsible investing
within our investment processes
For us, responsible investment is driven by company
engagement. We support positive change in the world
by using our voice, amplified by our size and scale, to
make companies work harder and aim higher in their
environmental, social and governance (ESG) efforts.
There are three elements to our approach:
1. Engaging with our fund managers
We are clear with our fund managers that they must
actively engage with the companies in which they invest
our clients’ money. They must also integrate ESG factors
into their investment decision-making process, to minimise
risk and maximise opportunity.
2. Our fund managers’ engagements
with companies
We don’t prescribe how each fund manager should
meet the baseline standards mentioned above, but we do
require regular reporting. We expect our managers to set
well-informed and precise objectives with their underlying
companies. We’ll share examples of these company
engagements through a regular stream of case studies
for our clients, available in 2023.
3. Our strategic partner Robeco’s engagement
with companies
Robeco are engagement specialists, helping us maximise
our influence in this important area by engaging with
companies on around 20 carefully selected themes,
such as biodiversity, digital innovation in healthcare, and
responsible executive remuneration. Throughout 2022,
we continued our quarterly client reporting on Robeco’s
activity, published on our website. For example the Q4 2022
report can be found at www.sjp.co.uk/sites/sjp-corp/files/
SJP/product-and-services/investments/responsible-
investing/our-approach/Robeco_Report_2022_Q4.pdf.
Find out more about our engagement approach in the
Stewardship and Engagement Report 2021 available on
our website at www.sjp.co.uk/products-and-services/
investment/responsible-investing. Published in the second
quarter of 2022, the report earned us the right to become
a signatory to the Financial Reporting Council’s UK
Stewardship Code, which sets high stewardship standards.
Becoming a signatory of the Code recognises our
significant efforts in this space. As successful applicants,
we join 235 other signatories of the UK Stewardship Code
and will be required to report on an annual basis to remain
a member.
“A single client doesn’t have the
time or access to influence
company board agendas,
direction, or objectives –
but when we unite our clients,
our fund managers, and their
collective assets, companies
listen. Our influence becomes
difficult to ignore.”
Petra Lee, Responsible Investment Consultant at SJP
Our responsible business
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St. James’s Place plc
Not an investment strategy,
but the investment strategy
Companies are increasingly measured not only by their
monetary value, but also by the impact they have on the
world. Correspondingly, the changing world has an impact
on how these companies operate and perform. Our fund
managers understand this evolving landscape, so they
invest in the companies they believe will stand the test
of time and deliver returns over the long term.
It’s our belief that if you’re focused on performance,
investing responsibly isn’t an investment strategy, it’s the
investment strategy. Our external engagement partner
Robeco helps us understand how companies approach
ESG factors which feeds into how we identify future
investment risks and opportunities.
Plans for 2023
We’ll continue to collaborate with our stakeholders and
the industry to create a client-led, intuitive approach to
responsible investing. It’s important that we keep pace
with our peers and our regulators and use our size and
scale to drive meaningful change.
Internally, we will look to develop investment solutions
suited to the growing number in our target market who
would like to put sustainability at the forefront of their
investment strategy. Having identified our top 20 carbon-
emitting holdings, we’ll work with our external engagement
partner Robeco to engage more deeply with them in 2023
and beyond.
Adapting to changing regulation
Through the course of 2022, we kept a vigilant eye
on the evolving regulatory environment in which
we operate. We influenced industry participants to
drive client-friendly terminology in a developing but
jargon-heavy arena. This included working closely
with the collaborative industry body TISA. We also
took the following steps:
We are developing factsheets containing ESG
disclosures to help our clients understand where
their money is invested and how sustainability
is being considered. These factsheets will be
released in 2023.
We created and ran a climate investment
education programme in collaboration with
Imperial College and investment manager Ninety
One, helping our investment analysts become
even more aware of how to incorporate climate
change into their everyday monitoring.
We produced an e-learning module to educate
our advisers and employees about the importance
of responsible investing and how we integrate it in
our proposition.
“We recognise we are on a journey
and will continue to develop our
responsible investment approach,
but validation of our process and
becoming a signatory to the UK
Stewardship Code certainly
demonstrates how we are
on the right track.”
Sam Turner, Head of Responsible Investment
& Proposition Strategy
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Strategic Report
Climate change
Taking action on climate change.
Some of the issues facing our world
today can feel overwhelming, but solving
them involves everyone playing their part.
We are committed to doing what we can to tackle climate
change through our operations, supply chain and
investment management approach. Our approach to
reaching net zero includes educating our community on
climate change, embedding environmental considerations
into decision-making and conserving resources – to not
only reduce our impact, but have a positive one.
We are advocates of transparency
Effective and transparent reporting promotes
accountability. We therefore welcome and endorse the
recommendations of the Financial Stability Board and
support the increased regulatory focus on disclosing
climate-related risks and opportunities from the Bank
of England and the Financial Conduct Authority. These
disclosures demonstrate how we assess the impacts of
climate change on our business and promotes a more
informed understanding of climate-related risks and
opportunities in our whole community.
We are reporting against the Task Force on Climate-
Related Financial Disclosures (TCFD) framework for the third
time this year, building on our reporting from the past two
years. Given its size and scale, our comprehensive 2022
TCFD Report including all 11 TCFD disclosures can be found
separately here: www.sjp.co.uk/TCFD2022. To aid readers
of the Annual Report and Accounts, we provide a summary
of the key plc disclosures from the report (overleaf),
together with an overview of our approach to addressing
climate change.
Our commitment to addressing
climate change
We aim to contribute to building a sustainable future
by actively tackling climate change through the way
we do business. We have a responsibility to our
clients, society and the planet and we are committed
to being a proactive force in the transition to a lower
carbon economy. We also recognise the commercial
business case of leading this change.
2022 presented yet more evidence that climate
change is causing significant global impacts even
at the current level of global warming, from record-
breaking temperatures in the UK to life-altering floods
in Pakistan. Taking action on climate change is one
of the four strategic priorities in our Framework, as
we know it presents significant financial and non-
financial risks to our sector and communities. As our
purpose is to give stakeholders the confidence to
create the future they want, we must operate in a
way that is responsible, future-focused and long
term. We set out our approach to climate change
here: www.sjp.co.uk/about-us/responsible-business.
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St. James’s Place plc Annual Report and Accounts 2022
Summary of the Task Force on Climate-related Financial Disclosures
Theme Description
Pages in the
2022 TCFD
report TCFD recommended disclosure 2022
Our disclosure in our
2022 TCFD report
Governance
Disclose the
organisation’s
governance
around climate-
related risks and
opportunities.
10-16 a) Describe the Board’s oversight
of climate-related risks
and opportunities.
We have provided an
overview of how we
govern climate-related
risks and opportunities,
our accountable
leaders and our
performance against
new and former
commitments.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Strategy
Disclose the
actual and
potential
impacts of
climate-related
risks and
opportunities
on the
organisation’s
businesses,
strategy, and
financial
planning where
such information
is material.
17-32 a) Describe the climate-related risks
and opportunities the organisation
has identified over the short, medium,
and long term.
We have provided
a summary of where
we are today, our
memberships, our
carbon audit and the
levers we are applying
to achieve net zero, plus
our scenario analysis.
b) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a +2°C
or lower scenario
Risk
management
Disclose how
the organisation
identifies,
assesses,
and manages
climate-related
risks.
33-45 a) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
We have described our
climate-related risks
and opportunities,
the timeframe over
which they manifest
and their significance
to our business,
along with an overview
on how we integrate
this into our risk
management process.
We plan to enhance
our understanding
of technology-related
climate risks
during 2023.
b) Describe the organisation’s processes
for managing climate-related risks.
c) Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated
into the organisation’s overall risk
management.
Metrics and
targets
Disclose the
metrics and
targets used
to assess and
manage relevant
climate-related
risks and
opportunities
where such
information
is material.
45-52 a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
We have provided our
organisational metrics,
our progress against
targets and the impact
of our investment
proposition on our
exposure to carbon-
intensive companies.
b) Disclose Scope 1, Scope 2
and, if appropriate, Scope 3
greenhouse gas (GHG) emissions,
and the related risks .
c) Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against targets.
Recommendations we have been able to fully disclose against Recommendations we have made significant progress
against, and plan to enhance our disclosure further
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Strategic Report
Our governance
Accountability for managing climate-related risks
and opportunities is led by the Board, which decides
the strategic direction of our environmental strategy.
The Executive Board then facilitates the execution of
the activities, and these are supported by the Responsible
Business Advisory Group, Climate Change Working Group,
the Group Risk Committee, the Group Audit Committee,
the Investment Executive Committee and our sustainable
investment regulation programmes. Within this list, the
main committees overseeing activities are our Responsible
Business Advisory Group and Climate Change Working
Group, with ultimate responsibility resting with our Chief
Executive Officer, Andrew Croft. The Responsible Business
Advisory Group and Climate Change Working Group meet
regularly to co-ordinate Group carbon reduction plans,
review environmental performance and agree mandatory
and voluntary environmental reporting and disclosure.
Our goals
During 2022 we continued to make progress on our
environmental approach. We have maintained our
operational carbon neutrality through offsetting.
1.
Climate positive
1
in our operations by 2025
All SJP sole occupied offices use 100%
electricity from renewable resources.
83% of our Company fleet are now electric
or hybrid and 100% of our new orders are
electric therefore we will, eventually, have
a fully green fleet as we continue to make
electric cars the best choice for our
travelling employees.
2.
Net zero in our supply chain by 2035
We undertook a supply chain review
and engaged with a percentage of
our suppliers on their climate targets
and ambitions.
We shared best practice and case studies,
helping them learn from one another.
We helped them understand their carbon
footprint and set their own net zero targets.
3.
Net zero in our Partnership by 2035
We are providing the Partnership with
emissions calculator recommendations
to help them identify, track and offset
their carbon emissions.
We track, review and celebrate climate
action commitments in the Partnership.
We are running workshops on best
practice and developing toolkits for 2023.
We’ll offset any residual emissions
after 2035.
4.
Net zero in our investments by 2050
As an interim target, in 2021 we committed
to a 25% reduction in the carbon footprint
of client investments by 2025.
We are delighted to have already
exceeded this target. We will continue
to work hard with our fund managers to
make further progress in the years ahead,
underscoring our desire to create financial
wellbeing in a world worth living in.
Implementation of a carbon conservation
measure (CCM) tracking tool
In April 2022 our corporate real estate (CRE) team
launched a CCM tracking tool to complete a full
survey of energy usage across SJP’s office estate.
This allows us to better understand existing set-ups,
make recommendations for optimisation and identify
opportunities for carbon reduction in support of
corporate targets.
The survey identified 270 opportunities; 161 of these
were through building management system (BMS)
optimisation and the remaining were capital works.
The BMS works were implemented immediately and
ranged from setting restrictions on air-conditioning
controllers to improving settings and adapting
demand triggers. Further improvements include
working to update all meters we manage to smart
meters, and linking these to analytical software, to
allow us to measure savings, identify efficiencies,
and capture regular consumption data. We can also
compare this data across different buildings and
use it to support financial decisions regarding capital
works. Our optimisation programme was completed
in September 2022, and alongside other
improvements and efficiencies already implemented
should deliver projected carbon savings across the
estate of around 395 tCO
2
e annually.
With the CCM tracking tool we now have the ability
to identify carbon reduction opportunities across the
estate and make informed decisions on how to react
to these, which in turn means we will more effectively
meet environmental and sustainability timelines
and targets.
1 By being climate positive we will remove more carbon emissions than
from the environment than we contribute.
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Educate
our community
on climate
change
Embed
climate into
our decisions
Reduce
our footprint
and become
net zero
Conserve
our resources
Our approach to tackling climate change
Following the agreement of our net zero targets in 2021, we have continued to make progress by focusing on education,
reduction, conservation and embedding climate-positive actions across all our operations. In 2022, we took the
following actions:
Make it instinctive
If addressing climate change
is integrated into our people processes
and practices, it will become a
necessity to operating.
Embed climate into our decisions
took opportunities to continue right-sizing our real
estate portfolio to ensure we do not carry unused
office space
when relocating to new office space, sought to
occupy buildings with high environmental credentials
built our CCM tracking tool to survey energy usage
across our corporate estate and acted on areas
highlighted for optimisation
Conserve our resources
encouraged 59,929 clients to go paperless
in 2022 In total, we now have 246,745 clients
signed up to paperless reporting
led our corporate brand refresh with a ‘no waste’
philosophy
Reduce our footprint and become net zero
100% of electricity supplied to our sole occupied
offices is from renewable resources
maintained our operational carbon neutrality
through offsetting
83% of our Company cars are now electric or hybrid,
with twice as many electric charging points offered
than in prior years
Educate our community on climate change
educated senior leaders, Board members and our
employee base on climate risk and our progress
continued to capture the benefits of decreased
business travel and use of accommodation through
reviewing our policies on travel and face-to-face
meetings, and empowering employees to make
the low-carbon choice the norm
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Our climate risk management
We choose to assess and manage both direct and indirect climate-related risks and opportunities, so that we
fully understand how climate change impacts our business, strategy and financial planning. Full details of our risk
management approach are available in the risk and risk management section of this Annual Report and Accounts,
on pages 90 to 99.
Our climate change metrics and targets
We collect and report our environmental data from October to September each year. The tables below summarise our
targets and progress, expressed in terms of both absolute and normalised carbon dioxide equivalent (CO
2
e) emissions
for our core business activities in recent years. Core business activities are defined as those within ‘operational control’.
Our emissions are calculated in line with the Greenhouse Gas Protocol using the 2021 emission factors provided by the
Department for Environment, Food & Rural Affairs (DEFRA). The emissions were calculated by our external sustainability
partner, BeZero.
1. Targets
We are committed to doing our part to cap global warming at 1.5 degrees Celsius by 2050 and are exploring science-
based targets in each area of our business. On the journey to limiting global warming to 1.5 degrees Celsius by 2050
we have set the following interim targets for 2025:
Absolute emissions targets
ID Scope Description
% of emissions
in scope
% decrease
from base year Base year
Base year
emissions Target year
Abs1 1 Gas and owned vehicles 100% 50% 2018 835 2025
Abs2 2 (Market-based) Electricity 100% 100% 2018 167 2025
Abs3 3 Business travel, waste,
and well-to-tank (WTT) 100% 50% 2018 10,380 2025
2. Progress
Absolute emissions progress
ID Scope
Actual
emissions in
year (tonnes
CO
2
e)
% of target
achieved Comment
Abs1 1 649 45% Since 2019 we have opened 3 new larger offices: Lombard
Street, Knightsbridge and Aztec West. These increased
both scope 1 and 2 consumption, but particularly gas usage.
We have since introduced a carbon conservation measures
(CCM) tracking tool that identifies efficiencies and
opportunities to reduce our carbon output. This has proved
effective, demonstrated by a marked reduction in both gas
and electricity consumption over the last year. We have
also updated our location meters (where we manage them),
introduced utility analytical software and are working more
closely with our utility brokers to ensure data accuracy and
to identify trends, benchmark consumption across locations
and reduce inefficiency.
Abs2 2 (Market-based) 198 -18% In 2022, we continued to purchase 100% renewable electricity
for our UK operations, reflecting best practice and driving
demand in the renewable energy market.
Abs3 3 3,828 126% As we came out of the COVID-19 pandemic in 2022, there
has been an increase in scope 3 emissions compared to
prior year but has remained well below the baseline year.
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3. Gross emissions
As a large, quoted company incorporated in the UK, we are required to report our global and UK energy use and carbon
emissions in accordance with the Companies (Directors’ report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018. The data presented below represent emissions and energy use for which St. James’s Place plc
is responsible. To calculate our emissions, we have used the requirements of the Greenhouse Gas Protocol Corporate
Standard along with the UK Government GHG conversion factors for company reporting 2021. The results below represent
100% of our activity using the operational control approach. Any estimates included in our totals are derived from actual
data which have been extrapolated to cover the full reporting period.
Scope Description Unit
2018 2021 2022
UK
Global
(excl. UK) UK
Global
(excl. UK) UK
Global
(excl. UK)
1 Emissions from gas,
refrigerants and
owned vehicles
tCO
2
e 835 – 934 – 649 –
2 Location-based Electricity emissions using
geographical location
tCO
2
e 1,836 168 1,629 102 1,335 198
Market-based Electricity emissions using
purchased electricity factor
tCO
2
e – 168 – 102 – 198
3 Business travel in
private cars
tCO
2
e 1,208 – 158 – 277 –
1, 2 & 3
Location-based
Total emissions tCO
2
e
3,879 168 2,721 102 2261 198
Market-based 2043 168 1,092 102 926 198
Direct and indirect
energy consumption
kWh 10,451,833 263,607 12,633,648 164,045 10,367,808 301,819
1, 2 & 3
Location-based
Normalised emissions
to kWh
tCO
2
e/ kWh
0.0003 0.0006 0.0002 0.0006 0.0002 0.0007
Market-based 0.0001 0.0006 0.0001 0.0006 0.0001 0.0007
3 Other business travel, waste,
hotel stays, WTT and T&D
tCO
2
e 10,380 1,337 3,828
3 Property Trust tCO
2
e 11,469 7,872 6,221
Total (market-based)
tCO
2
e 22,851 10,245 10,896
We account for 100% of our operational activity using the Operational Control Approach. There are no exclusions.
Normalised emissions
Scope
Normalised
emissions in
prior year
(tonnes CO
2
e
per ‘000 sq ft)
Normalised
emissions
in year
(tonnes CO
2
e
per ‘000 sq ft) Comment
1 1.74 1.23 Despite new hybrid working conditions put in place post the COVID-19
pandemic, encouraging employees to return to offices, the emission
intensities for scopes 1 and 2 have continued to decrease. However,
a rise in business travel has resulted in increased business miles resulting
in a rise in scope 3 intensity.
2 (Market-based) 0.19 0.37
3 1.17 7.25
Our approach to offsetting
As part of our approach, we offset carbon emissions that we can’t reduce through our current initiatives. However,
purchasing carbon credits alone is not a long-term strategy for tackling climate change, and we continue to work hard
to reduce emissions throughout our operations, supply chain, Partnership and investments. We work with a reputable
carbon offsetting company, Coco+, to reduce the impact of carbon emissions produced by SJP, investing in projects
that benefit both people and planet. This year we offset 8,000 tCO
2
e across a mix of geographic locations by funding
projects which supported clean cooking, renewable energy and forest conservation. All offsetting projects are aligned
with the Verified Carbon Standard (VCS) and we chose projects that supported not only the main UN Sustainable
Development Goals we align with, but as many of the 17 as possible through the projects available to us.
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Giving back is in our DNA; from our founding days we have looked beyond ourselves
to make a difference to those less fortunate. We are committed to driving positive
community impact, building social capital within communities, and connecting the
dots between the charities we support and the social initiatives we run, by offering
place-based and skills-based outreach.
Community impact
Transformative community impact, giving back
to support local communities and regeneration.
£8.0m
Total invested in communities
2021: £6.2 million
Our goals
1.
Generate community impact through
Partner and employee engagement.
2.
Invest in local communities.
3.
Improve the financial literacy
of young people.
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Annual Report and Accounts 2022St. James’s Place plc
2%
Community investment
Percentage of profit before tax attributable
to shareholders’ returns invested in supporting
our communities and good causes
2021: 2%
11,012
The total number of hours our employees
gave during working hours in support
of community engagement activities
2021: 12,395 hours
£537,055
The value of the time our
employees gave during
working hours
2021: £599,356
90%
Percentage of Group
employees involved in
supporting our communities
and good causes
2021: 94%
Our community impact approach
In 2021, we made community impact a strategic priority
of our Framework to reflect its importance to us and to
strengthen our commitment to support local communities
and regeneration. In 2022, we continued to develop our
approach through establishing clear goals and measures.
We want to create lasting value in everything we do, and
act to make a difference to those less fortunate through
our community work, financial education programmes and
the support of the St. James’s Place Charitable Foundation.
We believe economic independence is an enabler of
choice, giving people the confidence, knowledge and
opportunity to make better decisions that positively
affect their future. Our community work is therefore
focused on supporting social mobility and inclusion
because we believe that people cannot make informed
decisions if they are experiencing exclusion.
An example of this in action is our work with Young
Gloucestershire, a county-wide charity supporting the
physical and mental wellbeing of young people, giving
them the confidence, motivation and skills to improve
their lives and cope with challenges.
Young Gloucestershire – our holistic support
Alongside the St. James’s Place Charitable Foundation,
SJP have been working with Young Gloucestershire,
a charity which supports the needs of disadvantaged
young people in the county. Our holistic support has
enabled them to grow, develop and has changed
the lives of many young people for the better. The SJP
community volunteer their skills and time – providing
financial education, making up food parcels and
acting as Trustees – and we have utilised the
apprentice levy to support their staff training.
“Young Gloucestershire really values the partnership
with SJP: it is so much more than a funder-recipient
relationship. The opportunity for the ongoing
development of our staff through the apprenticeship
offer, the engagement of SJP staff in volunteering
to be a trustee and the offer of programmes to
our young people, alongside ongoing discussions
and debates with the Foundation team, have really
added value to Young Gloucestershire and we are
very grateful for this ongoing support.”
Tracy Clark, CEO Young Gloucestershire
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Governance
Volunteering as a mark of our culture
As a business we encourage all employees to volunteer
for at least two days a year in work time, in addition to
participating in a team challenge. This year we were able
to get back to hands-on volunteering following the easing
of COVID-19 restrictions, and 25% of employees volunteered
for one day or more. We also encourage and recognise
employees who volunteer in their own time, with 44 £300
grants given to the charities they supported, for example,
Rising Stars football club which provides sport and
recreational activities for over 200 people annually
aged 5-16 whilst also supporting families and the local
community by hosting family fun days, as well as providing
individuals from troubled households with a safe
environment to partake in sport. Our people supported
a wide variety of causes during work time, including:
blood donations
marshalling at Her Majesty’s funeral
delivering magic workshops at a youth zone
in Manchester
NHS Responders
helping to set up at the Phoenix Festival
helping prepare goods for sale at a hospice charity shop
helping to load lorries for emergency relief in Ukraine
Our community also came together to support
humanitarian crises through volunteering and donations.
For example, £1.4 million was raised by the community to
support the humanitarian effort in Ukraine, and in addition
individuals and SJP locations organised collections of
goods to be transported to Ukrainian refugees, which
continued through the year. The Pakistan floods also
rallied our community and in addition to raising £100,000,
members of the community went out to Pakistan to lend
their support.
We know that volunteering has a much broader impact
than just supporting beneficiaries. In our annual impact
survey, of the 358 employee volunteers who responded
43% report that volunteering improved at least one aspect
of wellbeing, 70% developed a skill that helped either their
personal or professional development and 47% said it
increased their pride in St. James’s Place.
Duke of Edinburgh (DofE) Award
In 2022 we continued our strategic partnership with
DofE to support social mobility in the UK. Funding of
£450,000 was given to support the DofE’s strategic
aims of working with disadvantaged young people –
over 85,000 to date. Both our organisations are
dedicated to helping people define their own futures,
and through the DofE young people can raise their
aspirations and confidence, and meet their personal
goals. This strategic partnership helped in promoting
careers insight and work opportunities to DofE
participants. In 2022, we continued to support hosting
of virtual work experience events, involving young
people, thereby supporting access to the industry.
778
The total number of employees
who volunteered in work time
2021: 746
Image provided by The Duke of Edinburgh’s Award (DofE)
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Support through the St. James’s Place
Charitable Foundation
A grant-making charity supported by the community
of St. James’s Place.
The St. James’s Place Charitable Foundation (the
Charitable Foundation) is an independent registered
charity established by the founders of St. James’s Place
in 1992 to enable our community to give back to those less
fortunate in the communities in which the SJP community
work and live. The Charitable Foundation has grown
alongside the St. James’s Place Group and, according
to the Giving Trends report 2021 from the Association of
Charitable Foundations, is now the third largest corporate
foundation in the UK. It provides support to small and
medium-sized charities across the UK and overseas
through a range of grant programmes and has supported
in excess of 4,000 charities since it began. The Charitable
Foundation focuses its grant-making in the following
key areas:
children and young people who are disadvantaged
or have a disability
hospices
cancer support
mental health
veterans
The community of St. James’s Place is generous in its
support of the Charitable Foundation, through a variety
of fundraising activities undertaken across the year.
A key activity is monthly giving, and 82% of employees
and Partners give monthly gifts, which in 2022 together
represented 32% of the annual income raised. All monies
raised for the Charitable Foundation are then matched by
St. James’s Place plc. 2022 was a busy year of fundraising
by the SJP community: from golf days to cake bakes, and
from taking on physical challenges such as marathons,
cycle rides and treks to giving generously to the crises
in the world such as Ukraine and the Pakistan flooding.
An amazing £10.5 million was raised in the year through
these fundraising activities and Company matching.
A total of £10.1 million was then given out to 853 charities.
The Charitable Foundation continues to provide a key
cultural connection for all of us across the Group.
£120.6m
Total amount raised for good
causes since inception in 1992
2021: £110.1 million
£10.1m
Amount given out
to charities in 2022
2021: £6.2 million
853
Number of individual
charities supported in 2022
2021: 578
82%
Percentage of UK Partners and
employees who donate through
a monthly covenant
2021: 85%
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Other Information
Focusing on strong outcomes through
grant-making and sustainability
In 2022, the Charitable Foundation continued to focus on
small to medium-sized charities, enabling them to deliver
essential services at a grassroots level, helping them to
transition back to usual provision following the impact of
the COVID-19 pandemic, and as the year unfolded helping
them to cope with the rising challenges of the cost-of-living
crisis affecting both their beneficiaries and their own
running costs. Continuing to evaluate transformational
impact on the charities supported, they have also
continued to add value to grantees; the 2022 Impact survey
highlighted strong impact from the grant-making, with 64%
of beneficiaries supported by the charities funded
reporting they had experienced substantive or
transformational change.
64%
Beneficiaries report a
substantive or transformational
impact on their life
2021: 66%
Thank you
The Charitable Foundation is grateful for the continued
and generous support of the St. James’s Place
community both in the UK and Asia, and the
St. James’s Place Group, who year on year provide
outstanding support in donations, fundraising and
volunteering time. The ongoing enthusiasm, creativity
and willingness to give back is inspiring and is an
agent for positive change in our communities both
in the UK and overseas.
Through our grant-making and wider support
mechanisms, we will continue to:
be responsive to both local and global crises
where we can effectively and safely direct funding;
build on our partnership funding model with key
supported charities;
connect skills, knowledge and expertise to enable
transformational change; and
inspire the St. James’s Place community to
continue their generous support to the Charitable
Foundation, so that together we can and will make
a positive and lasting difference to people’s lives.
Note: The Charitable Foundation is not controlled by the St. James’s Place Group, so the financial performance and position
of the Charitable Foundation are not consolidated in the Group Financial Statements presented on pages 188 to 254.
£10.5m
Amount raised in 2022
2021: £8.0 million
“WellChild has enjoyed a long and successful
partnership with SJP and the Charitable
Foundation. From creating a lasting legacy of
support in helping to establish WellChild nurses,
to the ongoing support of our Helping Hands
garden transformation programme.”
Matt James, WellChild CEO
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Strategic enablers
Our people
The following section reports against our material people themes. We are in the early
stages of reporting against our Responsible Business Framework, so some of the
sections that follow have more detail than others.
Here we cover our approach to:
Responsible relationships
Inclusion and diversity
Policy influence
Client satisfaction and retention
Responsible relationships
We invest in long-term relationships and know the
importance of giving people the optimum environment
to be the best version of themselves so we can create
success together. This section details the support
we gave our people in 2022.
Learning and development
Providing world-class learning experiences has continued
to differentiate us throughout 2022. We’ve created an
innovative, evidence-based training curriculum that delivers
content through virtual, digital and classroom channels.
We are committed to leveraging technology to enhance
learner engagement while simplifying access. Having
launched the SJP House app to our Academy in 2021, the
focus in 2022 was to integrate this with our existing system,
Salesforce, enabling a richer experience. This integration
provides real-world data to assess the true impact of
learning, as well as providing a vast variety of learning
content through bitesize videos, podcasts, workshops,
accreditations and ease of access to continuing
professional development material. The SJP House app will
be available to employees in 2023 and will drive a learner-
led culture and foster the development mindset of
continuous improvement.
Virtual Reality (VR) role-play experience continues to play
an important part in our offering. We have expanded the
offering with experiences that explore both vulnerability
and inclusion and diversity, as well as providing more
in-depth feedback. Our focus for 2023 will be to expand
our VR and Augmented Reality (AR) offering to the wider
Partnership, as well as employees.
Delivering an industry-leading qualification
through our Academy programme
Our Academy programme for 2022 continued to embed
the new programme redesign, providing flexible access
to tailored learning solutions through cutting-edge
technology. Our technology-enabled approach has
been designed to engage and challenge while providing
extensive support from real-world industry leaders and
mentors along the way.
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Employee engagement
Understanding our employees’ sentiment is crucial in
helping us build a thriving business and inclusive culture.
In April 2022, we ran a short pulse survey which focused
on wellbeing and rewards and benefits. We received
strong engagement and good feedback from the survey
and it was clear that employees both understood and
were satisfied with their benefits package. We have
subsequently identified areas where some employees
would like more support and this feedback is informing our
approach in 2023 and beyond. We ran our biennial Group-
wide employee survey in September 2022, which asked
questions across a wide range of subjects. The results
compared to our September 2021 pulse survey results
as follows:
‘I feel proud to work for this company’ – 87% (2021: 85%)
‘I would recommend this company as a great place
to work’ – 84% (2021: 81%)
‘I intend to still be working for this company in 12 months’
time’ – 82% (2021: 81%)
‘My work gives me a sense of personal achievement’ –
81% (2021: 81%)
Our engagement results are encouraging after a
challenging 2021. We will continue to monitor employee
sentiment through our ‘continuous listening’ approach in
2023 which will include two pulse surveys to check in ‘little
and often’ with employees on subjects important to us all.
To further strengthen the sense of connection amongst
employees we continue to focus on embedding our
culture, a sense of belonging, and inclusion at SJP. In 2022,
we developed materials for our ‘cultural conversations’
to support leaders hosting informal team sessions to
encourage employees to share experiences which can
further promote our culture and sense of connection.
During 2022, 77% of employees also took part in Impact, our
recognition scheme launched in October 2021. The scheme
enables employees to send e-cards or vouchers to
colleagues to acknowledge their positive impact, and in
October 2022 we held our first employee Impact Awards
event to recognise those who are outstanding role models
for our values and behaviours.
77%
Of employees also took part in
Impact, our recognition scheme
launched in October 2021
Employee wellbeing
Employee wellbeing remains a key focus for ensuring
responsible and successful relationships and it was
an area highlighted by our workforce engagement
representatives early in 2022 via our April pulse survey.
We repeated some of the pulse survey questions in
September’s biennial survey and were pleased to find
a positive shift in sentiment. However, we recognise there
is more to do to promote work-life balance and improve
in this important area.
We provide a range of initiatives to support and promote
wellbeing and a healthy work-life balance. These include
an early intervention and occupational health service,
Bupa private health insurance, an employee assistance
programme, mental health first aiders, Babylon GP services
and the services of two external doctors as well as holistic
wellbeing practitioners. Reassuringly, 88% of our employees
reported in our September biennial survey that they can
easily access the wide range of wellbeing support we
have available when they need it. Although this is very
encouraging, we still believe there is more to be done
to ensure consistency of the information available and
approach taken. Our future focus is to develop a proactive
wellbeing strategy where employees feel supported
and valued.
Reward and benefits
Reward and benefits are a core part of our employee value
proposition, ensuring we remain market-competitive so
we can attract and retain the talent we need to perform
at our best. We evaluate roles and build calibration and
moderation into our key reward processes to ensure fair,
consistent outcomes and to protect against gender pay
bias. During 2022 we committed to reporting our ethnicity
pay gap as well as maintaining our Living Wage Employer
status for all our employees across the Group.
In 2022 we focused on how we could support employees
through the cost-of-living crisis, which included a one-off
payment to employees earning below £32,500 to assist
with bills. We also developed a set of seminars and videos
to provide guidance to all employees on managing their
finances and accessing our broad range of benefits.
To further strengthen our focus on performance we
introduced performance-related balanced scorecard
measures to our employee bonus plans based on our
Company objectives. The measures replace embedded
value as a metric and include the controllable expense
outcome, net inflows target and the underlying cash
result. The resulting direct correlation of the company’s
performance with each employee’s bonus has encouraged
awareness and interest in the financial and economic
factors that affect the company’s performance. This has
been complemented with regular update videos from the
CEO and Executive team sharing insight on the external
environment and progress. Despite difficult economic
conditions we maintained 74% employee participation in
our all-employee SIP and SAYE share schemes during our
annual sign-up period in March 2022. Share participation
creates a strong sense of ownership and interest in the
performance of the business and enables all employees
to share in the growth of the business.
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As at 31 December 2022 we employed 2,770
people across the world, including 2,517 in the UK
(31 December 2021: 2,673 people across the world,
including 2,419 in the UK) and the breakdown of
our workforce by gender is shown below.
Board Directors
3
3
7
7
2021
MaleFemale
2022 2021 2022
Executive
Board,
Company
Secretary
and their
direct reports
17
18
38
45
2021
MaleFemale
2022 2021 2022
Managers and
decision-
makers
70
89
229
233
2021
MaleFemale
2022 2021 2022
Total
employees
1,374
1,427
1,299
1,343
2021
MaleFemale
2022 2021 2022
Inclusion and diversity (I&D)
We want to create an inclusive environment where
diverse perspectives are valued and our people can be
their true selves. This helps us to build connections with
all our clients, attract talented people to work with us
and deliver the best products, services and experiences.
Our approach to I&D is focused on attracting, retaining
and developing diverse talent and fostering an inclusive
environment where everyone can thrive. Progress is
overseen by the Inclusion and Diversity Steering Group,
chaired by CEO Andrew Croft, with support from the
Nomination and Governance Committee and our Board.
During 2022, all Executive Board members continued to
take an active role in promoting I&D, through sponsorship,
mentoring and reverse mentoring and signing up to
individual plans and targets.
Public commitments
We remain committed to our public diversity goals which
we announced in 2018, and although progress in our
industry can be variable in speed, every incremental
change is an important step in the right direction. Female
representation on the Board is 30% (but will rise to 37.5%
following our AGM in May 2023), and in senior roles within
our core employee base is 28.1%. Our minority ethnic
representation is 6.3%, based on 71.3% of our core
employee base who voluntarily provided ethnicity data.
A focus on training
In 2022, we launched an I&D toolkit based on four core
principles: being representative, accessible, inclusive
and avoiding bias. The toolkit was shared across our
employee base and our Partnership with live workshops
and self-serve content on how to apply the principles to
decision-making, projects, recruitment, communications
and much more. The principles provide consistency of
approach across the organisation and help our people
to embrace I&D across all they do.
1 Employees may appear in more than one of the graphs
presented above.
2 ‘Managers and decision-makers’ are defined as employees
who have responsibility for planning, directing or controlling
activities of the company, or a strategically significant part
of the company.
3 The Executive Board, Company Secretary and their direct
reports excludes administrative and executive support
staff such as personal assistants and executive assistants.
4 Gender information is an evolving area of reporting and there
are a variety of different frameworks requiring disclosures
under different definitions and calculation methodologies.
As a result, not all of our gender statistics will align to each other.
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Attracting diverse talent
We continue to focus on how to attract diverse talent to
the financial services industry and to our business, and
we believe there is much to do to strengthen the external
pipeline of talent and attract a greater range of people to
work in our sector. At SJP we continue to use gender-coding
software for our job adverts and aim for gender-balanced
shortlists and interview panels. We undertook research on
the demographic makeup of employees at our locations to
understand how we can attract more diverse talent across
the UK. We also launched a diversity data capture exercise
in our Academy, so we are able to better track diversity
amongst our newest advisers and Partners. Like many
businesses, we are beginning to prepare for Ethnicity Pay
Gap reporting and have recently held focus groups with
some of our internal stakeholders to continue to identify
barriers and opportunities for progress.
For our early careers populations, we have continued to
partner with organisations and charities to help encourage
diverse young talent into our business – some into short-
term work experience/internship opportunities, others
into full-time roles through apprenticeship and graduate
schemes. These include working with charities such as
10,000 Black Interns, and Patchwork for applicants with
disabilities. We ran our ‘Futures in Finance’ initiative for the
second time in 2022, giving students a non-traditional entry
point into the industry in an effort to remove sociocultural
barriers. It is non-negotiable that we give full and fair
consideration to all applicants who approach SJP, having
regard to an individual’s aptitudes and abilities. When
needed, we will consider modifications to the working
environment so employees with disabilities can take up
opportunities or enhance their role, and we aim to assist
employees who become ill or disabled, for example, by
arranging appropriate support and training.
As part of this, we have increased our focus on disability
and accessibility, continuing to partner with the Business
Disability Forum and reviewing various aspects of our
offering through an accessibility lens, including an
upcoming workplace adjustments policy.
We have also continued to grow the development of
our internal talent pipeline. Building on our success with
mentoring, (which is available to all SJP employees), we
completed our fifth year with the 30% Club, offering 30
mentors and matching 30 female mentees with mentors
from a cross section of industries and sectors. 2022
was also the second year of our in-house mentoring
programme for talented women in the pipeline for senior
roles. The programme supports 50+ women with mentoring
by senior leaders as well as access to masterclasses and
psychometric profiling.
Earlier in 2022, we worked with the Aleto Foundation
to sponsor a three-day minority ethnic leadership
programme. The programme provided both Aleto alumni
and SJP employees with skills workshops and an innovation
challenge, the results of which were presented to a panel of
SJP senior leaders including CEO Andrew Croft. In addition,
participants also benefited from nine months of virtual
mentoring with senior mentors from both SJP and Aleto. We
believe programmes like this have the power to accelerate
the drive for greater diversity in our sector, and this is why
we have committed to sponsoring the EY Foundation’s
Sustainable Futures programme to begin in spring 2023.
Here we break down the data collection results with
overall population percentages, followed by a more
in-depth breakdown for race and ethnicity as gender
is covered on the previous page.
Gender
Female 52.4%
Male 46.3%
Non-binary 0.2%
Other 0.0%
Prefer not to say (PNS) 1.1%
Sexual orientation
Heterosexual 92.8%
Bisexual 2.1%
Gay/lesbian 1.4%
Other 0.2%
PNS 3.5%
Ethnicity
White 92.6%
Asian 3.9%
Mixed 1.6%
Black 0.7%
Other 0.1%
PNS 1.1%
Disability
Without a disability 85.1%
With a disability 12.4%
PNS 2.6%
Race and ethnicity
Executive management
1
92.2%
White
2021: 93.6%
6.1%
Asian, Black,
Mixed, Other
2021: 4.8%
1.7%
Prefer not to say
2021: 1.6%
All other employees
92.7%
White
2021: 92.3%
6.3%
Asian, Black,
Mixed, Other
2021: 6.5%
1.0%
Prefer not to say
2021: 1.2%
1 We have defined executive management as a combination
of Board Directors and ‘managers and decision-makers’ as
in the gender split graphs on the previous page.
As a commitment to becoming a leading responsible business
in the UK, we will be reporting on our ethnicity pay gap in 2023.
Our responsible business
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I&D engagement
Our thriving community of networks and groups are safe
and collaborative spaces for members to share resources,
experiences, allyship and support, in addition to providing
input and feedback on strategy and policy change.
The groups collaborate on events and initiatives and
span the following areas:
LGBT+ including the SJPride network
race and ethnicity, including the Embrace network
gender, including Unity, the professional women’s
network, with over ten network chapters internationally
disability and neurodiversity, a group with a growing
membership
parents, network established during the pandemic
for increased connection and support
smaller groups sharing interests such as military veterans,
age, the menopause, wellbeing, religion and faith and
socio-economic background.
In 2022, we reviewed our networks and groups, working
with external consultant Lumorous. The review helped us
to develop and formalise governance, budget and best-
practice support to help them grow and engage more
fully in the areas of governance, impact and engagement.
We continued to recognise and celebrate a full calendar
of I&D events throughout 2022, including Mental Health
Awareness Week, International Women’s Day, International
Men’s Day and Black History Month. These are intended not
only to raise awareness of a particular subject but to also
provide the opportunity for open discussion and learning
in a safe environment.
Our strong desire to continue to learn and grow is
underpinned by our Partnerships with external organisations
who offer guidance, best-practice sharing, research and
resources. These include: The Diversity Project, LGBT Great,
Stonewall, the Valuable 500, the Aleto Foundation, Progress
Together, the Business Disability Forum and Disability
Confident. In 2022, we contributed to The Diversity Project’s
new Progress and Goals disclosure tool to help expand
visibility around the demographic makeup of our industry
and contribute to a summary of actions being undertaken
to diversify this for the future.
Policy influence
We aim to leverage our scale, influence and expertise to
position SJP as a trusted partner with policy stakeholders
and help shape policy to enable strategic commercial
objectives and societal good. Giving SJP a voice on the
issues that matter to us and to society will mitigate
emerging risks, help us shape the policy agenda,
and better enable us to drive change for society
in line with our founding principle of ‘giving back’.
Raising our voice to influence public policy means using
our scale and influence to help shape the future of our
industry for the better and have a positive impact on
the communities we live and work in.
We continue to actively engage with our regulators,
government, parliament, and other policy stakeholders
where relevant, on issues where we have expertise and
an interest. We are determined to be a prominent voice
in society to promote the value of financial advice and
financial resilience during a difficult economic period.
Topics we have recently been proactively engaging on
include the advice/guidance boundary and the labelling
framework associated with sustainable investing.
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Trend
Advocacy
93%
87%
91%
81%
2019 2020 2021 2022
Value for money
80%
72%
87%
68%
2019 2020 2021 2022
Overall satisfaction
89%
86%
96%
82%
2019 2020 2021
2022
2022 detail
Advocacy
50% Have recommended
31% Would recommend
19% Not comfortable
recommending
Value for money
27% Excellent
41%
21%
7%
4% Poor
Overall satisfaction
44% Very satisfied
38%
12%
4%
2% Very dissatisfied
81%
Recommend
68%
Positive
82%
Positive
Client satisfaction and retention
We are committed to building meaningful, long-term
relationships with satisfied clients who feel confident to
make informed choices about their finances, to help our
clients to achieve their financial goals.
Our business is based on building meaningful long-
term relationships and the satisfaction of clients is very
important to us. Retaining satisfied clients not only feeds
into financial results but is also directly related to our
long-term sustainability as a business. A recent survey of
our client population, in relation to 2022, indicated good
client sentiment with 81% clients strongly advocating for
us and recommending SJP, 68% believing we offer excellent
or good value for money and 82% being very satisfied
with their overall experience with us. Whilst we believe
macroeconomic uncertainty and therefore investment
market performance weighed on client sentiment for 2022,
we are pleased that a significant majority of our clients
remain very satisfied.
We engage with clients throughout the year via our ‘client
community’ group, which was established in 2020 and is
managed on our behalf by a third party. This enables us to
better understand how clients feel, and gauge their views
on key topics. We can also test their understanding of key
communications, and ensure we continue to meet their
evolving needs.
81%
Positive advocacy
2021: 91%
Our responsible business
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Our governance
The following section reports against our material governance themes. We are in
the early stages of reporting against our Responsible Business Framework, so some
of the sections that follow have more detail than others.
Here we cover our approach to:
Corporate governance
Risk management
Data privacy
Responsible procurement
Human rights
Corporate governance
We are committed to creating long-term, sustainable
success for all our stakeholders by ensuring that SJP
decision-making is fair and robust. We take the responsible
running of our organisation seriously and understand the
risks of not doing so; we embrace diverse perspectives,
set well defined individual accountabilities and equip
our people to uphold the principles of integrity, expertise
and compliance.
The Board is collectively responsible for establishing the purpose, values and strategy of the Group and satisfying itself
that these and its culture are aligned. This includes mechanisms to embed responsible practice across the business,
in which the Board is supported by the Executive Board and a number of sub-committees as highlighted below:
Responsibility
Managing
committee
Executive
Board member Remit
Culture, Company
and responsible
business mission and
employee wellbeing
Executive Board Andrew Croft To ensure the strength and maintenance of the unique
SJP culture throughout our community, and to lead and
manage our employees.
Responsible Business
Advisory Group
Executive Board Liz Kelly To oversee the Group’s responsible business strategy
and approach, supported by various working groups
covering specific areas such as environment, inclusion
and diversity, corporate social responsibility and
financial wellbeing.
Responsible
Investment
Investment
Executive
Committee
Tom Beal To ensure robust monitoring and governance of our
fund managers, in accordance with our investment
beliefs, which includes responsible investing.
The St. James’s Place Charitable Foundation is an independent charity, managed by its Trustees who oversee grant-
making and compliance with the charity’s objectives.
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Risk management
We are committed to sustaining a strong risk culture that
supports our vision and purpose. Robust risk management,
underpinned by a strong risk culture, is a key driver of our
success as a leading responsible business. An active
approach to risk management across the organisation
ensures we make informed decisions, balancing the
opportunities risk taking brings within our risk appetite.
The inherent risk environment faced by the Group
develops over time, and therefore we continuously and
comprehensively identify and assess risks against our risk
appetite. We then manage and monitor these accordingly.
Under the leadership, direction and oversight of our Board
and its committees, risks are carefully understood and
managed, mitigated or accepted to enable us to achieve
our strategic objectives. Our full risk and risk management
report can be found on pages 90 to 99.
Data privacy
We know how important it is to demonstrate responsibility
as data custodians to protect the privacy of all those we
interact with. It is an essential part of our commitment to
all our stakeholders and is integral to our success as a
trustworthy organisation.
On 25 May 2018, the UK Data Protection Act 2018 and EU
General Data Protection Regulation (GDPR) came into
effect across all (then) 28 countries of the European Union.
Following Brexit, the UK continues to closely adhere to GDPR
requirements, and as such so do we. It is important we also
demonstrate that any transfer of a data subject’s personal
data outside the European Union to ‘third countries’ is in
accordance with a comprehensive International Data
Transfer Policy.
In 2022, we appointed a Chief Data Officer to lead our
approach to data governance, management and
utilisation across the organisation. As our data strategy
continues to develop and evolve, we have also increased
dedicated resource to focus on data quality and support
the wider programme of work.
We aim to give our Partners and employees data and
information they can trust. Looking ahead, in a world where
data plays an increasingly fundamental role in everything
we do, this means we must update, improve and re-imagine
what our data can do for us. In the short term our focus will
be to update our corporate data architecture to better
support our Partners and improve the management of
data across the Group. Our Data Policy can be found here:
www.sjp.co.uk/site-services/privacy-policy.
Responsible procurement
We are committed to managing our business in a
responsible, sustainable and ethical manner. This means
upholding high standards in our supply chain, because
through engagement, due diligence and ongoing oversight
we can advocate responsible practice throughout our
value chain.
We recognise the benefits of building strong, mutually
beneficial relationships with both new and existing
suppliers, and sharing our aspirations and objectives to
encourage them to similarly strive to make a positive and
lasting difference to those less fortunate. We are delighted
that many provide support for the St. James’s Place
Charitable Foundation through donations and participation
in fundraising events, and our 83% electric car fleet is a
great example of working strategically with suppliers to
reduce environmental impact: 100% of our new fleet vehicle
orders are for fully electric.
Our due diligence and ongoing oversight seek to provide
confidence and secure evidence of good practice in
respect of responsible business among our suppliers.
We believe in treating all our stakeholders fairly, and our
suppliers are part of that process.
Our process
Our procurement process is designed to ensure we meet
our regulatory and business obligations. Our Sourcing,
Outsourcing and Supplier Management Policy requires
effective, risk-based due diligence to be conducted on
all new suppliers. This includes an assessment of their
approach to compliant, responsible, and sustainable
procurement, including but not limited to I&D, modern
slavery and gender pay gap reporting (where applicable).
Regular oversight and periodic reassessment of the due
diligence is required throughout the term of the relationship;
the frequency of this activity depends on the materiality of
the supplier, or risk they may pose to SJP.
We have been a member of the Living Wage Foundation
since 2014, and encourage our suppliers to adopt the
same approach or, where applicable, an overseas
equivalent. In some cases, we have ensured our
commercial agreements reflect this requirement and
provide the supplier with the correct support to do so.
We are also signatories of the Prompt Payment Code,
which is encouraged by the Department for Business,
Energy and Industrial Strategy (BEIS) and demonstrates
our commitment to good payment practices between
ourselves and our suppliers.
As we continue working towards our vision of becoming
a leading responsible business, we work closely to align
ourselves with UNSDG 9 and its Target 9.2 of promoting
inclusive and sustainable industrialisation through our
work with suppliers.
Our responsible business
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Human rights
We are committed to managing our business in an ethical
manner, with no tolerance for the abuse of human rights,
and we collaborate with our stakeholders to strengthen
and support the human rights movement. It is not possible
to give people the confidence to create the futures they
want without the basic rights and freedoms that belong
to us all. We recognise that respecting human rights is
everyone’s responsibility and our practices and policies
must reflect this whilst ensuring new areas of risk are
identified and managed throughout our operations and
our supply chain.
Responsible management is important to all our
stakeholders – shareholders, clients, the Partnership,
employees, suppliers and the communities in which we
operate. We do not tolerate or condone abuse of human
rights (including modern slavery) in any part of our
business, and we are committed to minimising the risk of
slavery or human trafficking in all parts of our supply chain.
Our due diligence and ongoing oversight seeks to secure
evidence of good practice in relation to human rights.
All employees have access to a copy of our code of ethics
and our equal opportunities policy, which make clear that
we oppose all forms of unfair discrimination or victimisation.
Our bullying and harassment policy sets out our approach
in relation to allegations of harassment and/or bullying.
Harassment, in general terms, is defined as unwanted
conduct affecting the dignity of people in the workplace.
It may be related to age, sex, race, disability, religion,
nationality or any personal characteristic of the individual
and may be persistent or an isolated incident.
Anti-bribery and corruption
We have a zero-tolerance approach to bribery and
corruption and aim to protect ourselves, our clients,
shareholders, employees and other associated companies
from any involvement. Our Board has responsibility for
oversight of the Group’s anti-bribery and corruption policy
and procedures and reviews these annually. Our employees
and advisers are provided with annual training on money
laundering, financial crime, fraud, bribery and corruption
through online training programmes which are mandatory
to complete. Our anti-bribery and corruption policy,
which gives further detail, is available on our website
at www.sjp.co.uk/about-us/corporate-governance.
Non-financial and sustainability information statement
This section of the Annual Report constitutes the St. James’s Place non-financial and sustainability information statement,
produced to comply with sections 414CA and 414CB of the Companies Act 2006. The following table sets out where, within
our Annual Report, we provide further detail on matters required to be disclosed under the sections above. In particular,
it covers the impact we have on the environment, our employees, social matters, human rights, anti-corruption and
anti-bribery matters, policies pursued and the outcome of those policies, and principal risks that may arise from the
Company’s operations and how we manage these, to the extent necessary for an understanding of the Company’s
development, performance and position and the impact of its activity.
Reporting requirement Section(s) and page(s)
Anti-corruption
and anti-bribery
Our responsible business (page 65)
Business model
Our business model (pages 20 and 21)
Employees
Developing employees (page 12), Building community (page 28), Our responsible business
(pages 57 to 61), Risk and risk management (page 95), Section 172 statement (pages 104 to
110), Board composition, succession and evaluation (pages 119 and 121), Report of the Group
Risk Committee (page 136), Report of the Group Nomination and Governance Committee
(pages 139 to 142), Directors’ report (page 177)
Environmental matters
Our responsible business (pages 43 to 51), Risk and risk management (page 94)
Non-financial key
performance indicators
Our business model (pages 20 and 21), Our responsible business (pages 40 to 65)
Principal risks
Risk and risk management (pages 94 to 96)
Respect for human rights
Our responsible business (page 65)
Social matters
Our responsible business (pages 34 to 65), Corporate governance report (pages 106
and 109), Report of the Group Nomination and Governance Committee (page 142)
Climate-related
financial disclosures
Our responsible business (pages 46 and 47)
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Strategic Report
Record financial
results
Chief Financial Officer’s report
2022 presented a challenging
operating environment, as a variety of
macroeconomic and geopolitical factors
led to significant investment market falls
and eroded consumer confidence.
Our business performed strongly against this backdrop,
with our advisers attracting £17.0 billion (2021: £18.2 billion)
of new client investments, our second-best year for new
business flows in our history. With client retention rates
remaining very high net inflows totalled £9.8 billion
(2021: £11.0 billion), equivalent to 6.4% (2021: 8.5%) of
opening funds under management (FUM).
Despite this new business performance, investment market
falls resulted in FUM closing at £148.4 billion (31 December
2021: £154.0 billion).
In February 2021 we set out the planning assumptions
that underpin our business plan through to 2025:
1. long-term new business growth of 10% per annum;
2. consistent retention of client investments above 95%;
3. containing controllable expense growth to 5% per
annum; and
4. £200 billion of FUM by 2025.
Our results for 2022 demonstrate further progress towards
these goals; however, we recognised at the outset that
our performance over this planning period would not
be linear. 2021 was a very strong year across all metrics
as investment markets and consumer confidence were
buoyed by COVID-19 vaccination programmes, with the
environment in 2022 being much more challenging.
Despite this, our financial performance across IFRS, the
Cash result and European Embedded Value (EEV) has
reflected growth in average FUM during the year and the
resulting growth in income and strong cost control in line
with guidance despite the high inflationary environment.
This has led to record results across each of our key IFRS,
Cash and EEV metrics.
We have always taken a simple and prudent approach to
managing the balance sheet and our capital requirements.
This continues to be the case, with both the Group and our
life companies in a strong financial position.
Our financial results are presented in more detail on pages
70 to 89 of the financial review, but there follows here a
summary of financial performance on a statutory IFRS basis,
as well as our chosen alternative performance measures
(APMs). We also summarise key developments from a
balance sheet perspective and provide shareholders
with an overview of capital, solvency and liquidity.
Financial results
IFRS
IFRS profit after tax was £405.4 million in 2022
(2021: £287.6 million), up 41%. This reflects growth in average
FUM and the impact of policyholder tax asymmetry,
which benefits the IFRS result in periods of weaker markets.
Further detail on this asymmetry is included in the financial
review on page 74.
To address the challenge of policyholder tax being
included in the IFRS results which distorts IFRS profit before
tax, we focus on IFRS profit before shareholder tax as our
pre-tax measure. On this basis the result was £501.8 million
for the year (2021: £353.8 million), up 42% year on year.
The IFRS result also includes the impact of non-cash
accounting adjustments such as equity-settled share-
based payment expenses, deferred income and deferred
acquisition costs, so we continue to supplement our
statutory reporting with the presentation of our financial
performance using two APMs: the Cash result and the
EEV result.
Cash result
The Cash result, and the Underlying cash result contained
within it, are based on IFRS but adjusted to exclude certain
non-cash items. They therefore represent useful guides to
the level of cash profit generated by the business. All items
in the Cash result, and in the commentary below, are
presented net of tax.
The Cash result of £410.1 million for 2022 (2021: £387.4 million)
and the Underlying cash result, also of £410.1 million for
2022 (2021: £401.2 million) are up 6% and 2% respectively.
These record results have been driven by average mature
FUM being higher during 2022 than it was in 2021, despite
investment market falls during the year, delivery of
controllable expenses in line with our guidance, and
increased shareholder interest on our working capital
due to Bank of England base rate rises. More detail is set
out below and in the financial review on pages 75 to 83.
During the year, the net income from funds under
management was £607.7 million (2021: £577.5 million),
representing a margin within our range of 0.63% to 0.65%
(2021: 0.63% to 0.65%) on average mature FUM, excluding
Discretionary Fund Management (DFM) and Asia FUM,
in line with prior guidance. It is this mature FUM that
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Despite the challenging
environment in 2022,
the resilience of our
business model means
we have reported
record results across
each of our key
financial metrics.
Craig Gentle, Chief Financial Officer
contributes to the net income figure and at any given time
it comprises all unit trust and ISA business, as well as life
and pensions business written more than six years ago.
The development of mature FUM year on year is therefore
driven by four principal factors:
1. new unit trust and ISA flows;
2. the amount of life and pensions FUM that moves from
gestation into mature FUM after a six-year period;
3. the retention of FUM; and
4. investment returns.
As a result, growth in FUM is a strong positive indicator
of future growth in profits, despite not all new business
contributing to net income from funds under management
for the first six years of its existence.
At 31 December 2022, the balance of gestation FUM stood
at £45.5 billion (31 December 2021: £49.3 billion). Once
this current stock of gestation FUM has all matured, it
will (assuming no market movements or withdrawals,
and allowing for the corporation tax rate change in 2023)
contribute in excess of a further £383 million to annual
net income from funds under management and hence
to the Underlying cash result, at no additional cost.
St. James’s Place also generates a margin arising from
new business where initial product charges levied on
gross inflows exceed new business-related expenses.
The decrease in margin arising from new business in 2022
largely reflects the decrease in gross flows over the period,
although the relationship between the two is generally
directionally consistent rather than linear as the margin
includes some expenses which do not vary with gross inflows.
As part of the 2025 business plan, we set out our ambition
to contain growth in controllable expenses to around 5%
per annum. Controllable expenses are a key metric for
the business and we have delivered against the plan
with these costs increasing by 5% in 2022 to £277.9 million
after tax, despite rapidly rising inflation.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Establishment expenses 198.9 200.3
Development expenses 67.4 54.0
Academy 11.6 10.3
Controllable expenses 277.9 264.6
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Financial StatementsGovernance
Chief Financial Officer’s report
Financial results continued
Growth in income, coupled with this delivery of controllable
expenses in line with our guidance, has been the primary
driver of a record Underlying cash result for the year of
£410.1 million (2021: £401.2 million).
There were no one-off items recognised during the year,
resulting in the Cash result in 2022 also being £410.1 million
(2021: £387.4 million).
EEV
The EEV operating profit is sensitive to interest rates
changes, and so the increase in the opening risk discount
rate year on year, combined with a larger in-force book at
the start of 2022 compared to the start of 2021, is the main
factor behind the increase in EEV operating profit to
£1,589.7 million (2021: £1,545.4 million).
The EEV profit before tax for the period has been
significantly impacted by the negative investment return
variance of £1,314.0 million compared to the prior year
(2021: positive £894.5 million). The negative return reflects
decreased market values across our FUM compared to
our expectation, as a result of investment market falls
over the course of 2022.
The EEV profit after tax of £371.4 million (2021: £1,452.7 million)
reflects profit emergence as above.
The EEV net asset value per share was £16.66 at
31 December 2022 (31 December 2021: £16.57).
Financial position
Our IFRS Statement of Financial Position, presented on page
190, contains policyholder interests in unit-linked liabilities
and the underlying assets that are held to match them.
To understand the true assets and liabilities that the
shareholder can benefit from, these policyholder balances,
along with non-cash ‘accounting’ balances such as
deferred income (DIR) and deferred acquisition costs (DAC),
are removed in the Solvency II Net Assets balance sheet.
This balance sheet is straightforward and demonstrates
that the Group has liquid assets of £1,532.9 million
(2021: £1,858.8 million), of which £1,271.7 million
(2021: £1,605.3 million) is invested in AAA-rated money
market funds. This deep liquidity represents 50% of
total assets on the Solvency II Net Assets balance
sheet (2021: 52%). Further information about liquidity
is set out on page 82.
Analysis of the key movements in the Solvency II Net Assets
balance sheet during the year is set out on pages 80 to 83.
Solvency and capital
We continue to manage the balance sheet prudently
to ensure the Group’s solvency is safely maintained.
Given the simplicity of our business model, our approach to
managing solvency remains to hold assets to match client
unit-linked liabilities plus a management solvency buffer
(MSB). At 31 December 2022 we held surplus assets over
the MSB of £847.2 million (2021: £727.3 million).
We also ensure that our approach meets the requirements
of the Solvency II regime. Our UK life company, the largest
insurance entity in the Group, targets capital equal to 110%
of the standard formula requirement, as agreed with the
Prudential Regulation Authority (PRA) since 2017. This is
a prudent and sustainable policy given the risk profile
of our business, which is largely operational.
At 31 December 2022, the solvency ratio for our Life
businesses was 130%. Whilst this solvency ratio has
strengthened significantly from 115% at 31 December 2021,
the ratio at 31 December 2022 benefits from two temporary
effects arising from the significant investment market falls
during the period:
a 8% positive impact from policyholder tax asymmetry,
which benefits our own funds and hence solvency ratio
in the same way as it benefits our IFRS result. For further
details, refer to page 74; and
a 2% positive effect of the equity dampener depressing
the market risk capital component.
Excluding these temporary effects which will unwind as
markets improve, the solvency ratio for our Life businesses
was 120%, which is more closely aligned with prior periods.
31 December
2022
31 December
2021
Underlying solvency ratio for
our Life businesses 120% 115%
Impact of policyholder
tax asymmetry 8% 7%
Effect of the equity dampener 2% -7 %
Solvency ratio for our
Life businesses 130% 115%
Taking into account entities in the rest of the Group, the Group
solvency ratio at 31 December 2022 was 155% (2021: 134%),
with this result also reflecting the positive impact of
policyholder tax asymmetry and equity dampener
effects noted above.
Dividends
Our dividend guidance is to pay out around 70% of
the Underlying cash result in dividends. The strong growth
in our Underlying cash result for 2022 therefore drives a
total dividend for 2022 of 52.78 pence per share, up c.2%
on the total dividend for 2021, inclusive of a proposed final
dividend for 2022 of 37.19 pence per share.
The proposed final dividend will be paid, subject to
approval by shareholders at our AGM, on 31 May 2023 to
shareholders on the register as at the close of business
on 5 May 2023. A Dividend Reinvestment Plan continues
to be available.
Craig Gentle, Chief Financial Officer
27 February 2023
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Summary financial information
Page
reference
Year ended
31 December
2022
Year ended
31 December
2021
FUM-based metrics
Gross inflows (£’Billion) 71 17.0 18.2
Net inflows (£’Billion) 71 9.8 11.0
Total FUM (£’Billion) 71 148.4 154.0
Total FUM in gestation (£’Billion) 72 45.5 49.3
IFRS-based metrics
IFRS profit after tax (£’Million) 74 405.4 287.6
IFRS profit before shareholder tax (£’Million) 74 501.8 353.8
Underlying profit before shareholder tax (£’Million) 74 514.8 384.4
IFRS basic earnings per share (EPS) (Pence) 74.6 53.3
IFRS diluted EPS (Pence) 73.9 52.5
IFRS net asset value per share (Pence) 231.6 207.1
Dividend per share (Pence) 52.78 51.96
Cash result-based metrics
Controllable expenses (£’Million) 77 277.9 264.6
Underlying cash result (£’Million) 76 410.1 401.2
Cash result (£’Million) 76 410.1 387.4
Underlying cash result basic EPS (Pence) 75.6 74.6
Underlying cash result diluted EPS (Pence) 74.9 73.5
EEV-based metrics
EEV operating profit before tax (£’Million) 84 1,589.7 1,545.4
EEV operating profit after tax basic EPS (Pence) 218.8 219.9
EEV operating profit after tax diluted EPS (Pence) 216.8 216.5
EEV net asset value per share (£) 16.66 16.57
Solvency-based metrics
Solvency II net assets (£’Million) 88 1,379.9 1,245.3
Management solvency buffer (£’Million) 88 532.7 518.0
Solvency II free assets (£’Million) 89 1,921.4 1,323.4
Solvency ratio (Percentage) 89 155% 134%
The Cash result should not be confused with the IFRS Consolidated Statement of Cash Flows, which is prepared in
accordance with IAS 7.
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Strategic Report
Financial review
This financial review provides analysis of the Group’s financial position and performance.
It is split into the following sections:
Section 1
Funds under management (FUM)
1.1 FUM analysis
1.2 Gestation
As set out on page 21 and below, FUM
is a key driver of ongoing profitability
on all measures, and so information
on growth in FUM is provided in
Section 1.
Find out more on pages 71 and 72
Section 2
Performance measurement
2.1 International Financial Reporting
Standards (IFRS)
2.2 Cash result
2.3 European Embedded Value (EEV)
Section 2 analyses the performance
of the business using three different
bases: IFRS, the Cash result, and EEV.
Find out more on pages 73 to 87
Section 3
Solvency
Section 3 addresses solvency, which is
an important area given the multiple
regulated activities carried out within
the Group.
Find out more on pages 88 and 89
Our financial business model
Our financial business model is
straightforward. We generate revenue
by attracting clients through the value
of our proposition, who trust us with
their investments and then stay
with us. This grows our funds under
management (FUM), on which
we receive:
advice charges for the provision of
valuable, face-to-face advice; and
product charges for our
manufactured investment, pension
and ISA/unit trust products.
Further information on our charges
can be found on our website: www.sjp.
co.uk/charges. A breakdown of fee
and commission income, our primary
source of revenue under IFRS, is set
out in Note 4 on page 205.
The primary source of the Group’s
profit is the income we receive
from annual product management
charges on FUM. As a result, growth
in FUM is a strong positive indicator
of future growth in profits. However,
most of our investment and pension
products are structured so that
annual product management
charges are not taken for the first
six years after the business is written,
so the ongoing benefit of these gross
inflows into FUM for a given year will
not be seen until six years later. This
means that the Group always has six
years’ worth of FUM in the ‘gestation’
period. FUM subject to annual product
management charges is known as
‘mature’ FUM. More information about
our FUM and the fees we earn on it
can be found in Sections 1 and 2 of the
financial review on pages 72 and 76.
Initial and ongoing advice charges,
and initial product charges levied
when a client first invests into one
of our products, are not major drivers
of the Group’s profitability, because:
most advice charges received
are offset by corresponding
remuneration for Partners, so an
increase in these revenue streams
will correspond with an increase in
the associated expense and vice
versa; and
under IFRS, initial product charges
are spread over the expected life
of the investment through deferred
income (DIR – see page 74 for
further detail). The contribution
to the IFRS result from spreading
these historic charges can be
seen in Note 4 as amortisation
of DIR. Initial product charges
contribute immediately to our
Cash result through margin
arising on new business.
Our income is used to meet
overheads, pay ongoing product
expenses and invest in the
business. Controllable expenses,
being the costs of running the
Group’s infrastructure, the
Academy and development
expenses, are carefully managed
in line with our 2025 business
plan ambition to limit their growth
to 5% per annum. Other ongoing
expenses, including payments to
Partners, increase with business
levels and are generally aligned
with product charges.
Gross inflows
for most
investment
and pension
business
Does not yet
generate
annual product
management
charges
Business moves from gestation
FUM to mature FUM after 6 years
Gestation
FUM
Mature
FUM
Generates
annual product
management
charges
Gross inflows
for unit trust,
ISA and DFM
business
Gross inflows into FUM
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Section 1
Funds under management
1.1 FUM analysis
Our financial business model is to attract and retain FUM, on which we receive an annual management fee. As a result,
the level of income we receive is ultimately dependent on the value of our FUM, and so its growth is a clear driver of future
growth in profits. The key drivers for FUM are:
our ability to attract new funds in the form of gross inflows;
our ability to retain FUM by keeping unplanned withdrawals at a low level; and
net investment returns.
The following table shows how FUM evolved during 2022 and 2021. Investment return is presented net of all charges.
2022 2021
Investment Pension UT/ISA and DFM Total Total
£’Billion £’Billion £’Billion £’Billion £’Billion
Opening FUM 35.95 74.83 43.21 153.99 129.34
Gross inflows 2.31 9.90 4.82 17.03 18.20
Net investment return (3.15) (7.68) (4.57) (15.40) 13.61
Regular income withdrawals and maturities (0.29) (1.72) – (2.01) (2.00)
Surrenders and part-surrenders (1.53) (1.47) (2.24) (5.24) (5.16)
Closing FUM 33.29 73.86 41.22 148.37 153.99
Net inflows 0.49 6.71 2.58 9.78 11.04
Implied surrender rate as a percentage of average FUM 4.4% 2.0% 5.3% 3.5% 3.6%
Included in the table above is:
Rowan Dartington Group FUM of £3.29 billion at 31 December 2022 (31 December 2021: £3.52 billion), gross inflows
of £0.44 billion for the year (2021: £0.55 billion) and outflows of £0.14 billion (2021: £0.14 billion); and
SJP Asia FUM of £1.52 billion at 31 December 2022 (31 December 2021: £1.57 billion), gross inflows of £0.28 billion for
the year (2021: £0.36 billion) and outflows of £0.10 billion (2021: £0.10 billion).
The following table shows the significant net inflows and the progression of FUM over the past six years.
Year
FUM as at
1 January
Net
inflows
Investment
return
Other
movements
1
FUM as at
31 December
£’Billion £’Billion £’Billion £’Billion £’Billion
2022 154.0 9.8 (15.4) – 148.4
2021 129.3 11.0 13.7 – 154.0
2020 117.0 8.2 4.1 – 129.3
2019 95.6 9.0 12.4 – 117.0
2018 90.7 10.3 (5.4) – 95.6
2017 75.3 9.5 6.2 (0.3) 90.7
1 Other movements in 2017 related to the matching strategy disinvestment.
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Financial review
1.1 FUM analysis continued
The table below provides a geographical and investment-type analysis of FUM at 31 December.
31 December 2022 31 December 2021
£’Billion
Percentage of
total £’Billion
Percentage of
total
North American equities 49.1 33% 47.3 31%
Fixed income securities 23.1 16% 25.4 16%
European equities 19.3 13% 17.8 11%
Asia and Pacific equities 17.8 12% 18.6 12%
UK equities 16.0 11% 21.5 14%
Alternative investments 12.4 8% 11.9 8%
Cash 5.7 4% 5.9 4%
Other 2.8 2% 3.0 2%
Property 2.2 1% 2.6 2%
Total 148.4 100% 154.0 100%
1.2 Gestation
As explained in our financial business model on page 70, due to our product structure, at any given time there is
a significant amount of FUM that has not yet started to contribute to the Cash result.
When we attract new FUM there is a margin arising on new business that emerges at the point of investment, which is
a surplus of income over and above the initial costs incurred at the outset. Within our Cash result presentation this is
recognised as it arises, but it is deferred under IFRS.
Once the margin arising on new business has been recognised the pattern of future emergence of cash from annual product
management charges differs by product. Broadly, annual product management charges from unit trust and ISA business
begin contributing positively to the Cash result from day one, whilst investment and pensions business enters a six-year
gestation period during which no net income from FUM is included in the Cash result. Once this business has reached its
six-year maturity point, it starts contributing positively to the Cash result, and will continue to do so in each year that it remains
with the Group. Approximately 54% of gross inflows for 2022, after initial charges, moved into gestation FUM (2021: 51%).
The following table shows an analysis of FUM, after initial charges, split between mature FUM that is contributing net
income to the Cash result and FUM in gestation which is not yet contributing, as at the year-end for the past five years.
The value of both mature and gestation FUM is impacted by investment return as well as net inflows.
Position as at
Mature FUM
contributing to
the Cash result
Gestation FUM that will
contribute to the Cash
result in the future Total FUM
£’Billion £’Billion £’Billion
31 December 2022 102.9 45.5 148.4
31 December 2021 104.7 49.3 154.0
31 December 2020 85.9 43.4 129.3
31 December 2019 76.8 40.2 117.0
31 December 2018 62.1 33.5 95.6
The following table gives an indication, for illustrative purposes, of the way in which the reduction in fees in the gestation
period element of the Cash result could unwind, and so how the gestation balance of £45.5 billion at 31 December 2022
may start to contribute to the Cash result over the next six years and beyond, factoring in the change in the main rate of
corporation tax to 25% from 1 April 2023. For simplicity it assumes that FUM values remain unchanged, that there are no
surrenders, and that business is written at the start of the year. Actual emergence in the Cash result will reflect the varying
business mix of the relevant cohort and business experience.
Year
Gestation FUM future
contribution to the
Cash result
£’Million
2023 47.9
2024 111.3
2025 176.2
2026 240.9
2027 310.5
2028 onwards 383.5
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Section 2
Performance measurement
In line with statutory reporting requirements we report profits assessed on an IFRS basis. The presence of a significant
life insurance company within the Group means that, although we are a wealth management group in substance with
a simple business model, we apply IFRS accounting requirements for insurance companies. These requirements lead to
Financial Statements which are more complex than those of a typical wealth manager and so our IFRS results may not
provide the clearest presentation for users who are trying to understand our wealth management business. Key examples
of this include the following:
our IFRS Statement of Comprehensive Income includes policyholder tax balances which we are required to recognise
as part of our corporation tax arrangements. This means that our Group IFRS profit before tax includes amounts charged
to clients to meet policyholder tax expenses, which are unrelated to the underlying performance of our business; and
our IFRS Statement of Financial Position includes policyholder liabilities and the corresponding assets held to match
them, and so policyholder liabilities increase or decrease to match increases or decreases experienced on these
assets. This means that shareholders are not exposed to any gains or losses on the £148.1 billion of policyholder assets
and liabilities recognised in our IFRS Statement of Financial Position, which represented over 97% of our IFRS total assets
and liabilities at 31 December 2022.
To address this, we developed APMs with the objective of stripping out the policyholder element to present solely
shareholder-impacting balances, as well as removing items such as deferred acquisition costs and deferred income
to reflect Solvency II recognition requirements and to better match the way in which cash emerges from the business.
We therefore present our financial performance and position on three different bases, using a range of APMs to
supplement our IFRS reporting. The three different bases, which are consistent with those presented last year, are:
International Financial Reporting Standards (IFRS);
Cash result; and
European Embedded Value (EEV).
APMs are not defined by the relevant financial reporting framework (which for the Group is IFRS), but we use them to
provide greater insight to the financial performance, financial position and cash flows of the Group and the way it is
managed. A complete glossary of alternative performance measures is set out on pages 272 to 274, in which we define
each APM used in our financial review, explain why it is used and, if applicable, explain how the measure can be reconciled
to the IFRS Financial Statements.
2.1 International Financial Reporting Standards (IFRS)
As referenced above, our IFRS results are impacted by policyholder tax balances which we are required to recognise
as part of our corporation tax arrangements. This means that our Group IFRS profit before tax includes amounts charged
to clients to meet policyholder tax expenses, which are unrelated to the underlying performance of our business. The scale
and direction of these amounts can vary significantly: for example in 2022 we were required to refund £501.1 million to clients
due to investment market falls which flowed through our IFRS profit before tax as an expense, whereas in 2021 we deducted
£488.6 million from clients due to investment market gains, which flowed through as income. See Note 4 Fee and commission
income for further information. This leads to substantial distortion within our IFRS profit before tax: for the year ended
31 December 2022 it was £0.7 million, compared to £842.4 million for the year ended 31 December 2021.
To address the challenge of policyholder tax being included in the IFRS results we focus on the following two APMs, based
on IFRS, as our pre-tax metrics:
IFRS profit before shareholder tax; and
underlying profit.
Further information on these IFRS-based measures is set out below.
Profit before shareholder tax
This is a profit measure based on IFRS which aims to remove the impact of policyholder tax. The policyholder tax expense
or credit is typically matched by an equivalent deduction or credit from the relevant funds, which is recorded within fee
and commission income in the Consolidated Statement of Comprehensive Income. Policyholder tax does not therefore
normally impact the Group’s overall profit after tax. The following table demonstrates the way in which IFRS profit before
shareholder tax is presented in the Consolidated Statement of Comprehensive Income on page 188.
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Financial review
2.1 International Financial Reporting Standards (IFRS) continued
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
IFRS profit before tax 0.7 842.4
Policyholder tax 501.1 (488.6)
IFRS profit before shareholder tax 501.8 353.8
Shareholder tax (96.4) (66.2)
IFRS profit after tax 405.4 287.6
However, in both the current and prior year IFRS profit before shareholder tax and IFRS profit after tax have been impacted
by another nuance of life insurance tax, which has led to increases of over 40% in each of these balances year-on-year.
As set out above, life insurance tax incorporates a policyholder tax element, and the financial statements of a life insurance
group need to reflect the liability to HMRC and the corresponding deductions incorporated into policy charges. In particular,
the tax liability to HMRC is assessed using IAS 12 Income Taxes, which does not allow discounting, whereas the policy
charges are designed to ensure fair outcomes between clients and so reflect a wide range of possible outcomes. This
gives rise to different assessments of the current value of future cash flows and hence an asymmetry in the Consolidated
Statement of Financial Position between the deferred tax position and the offsetting client balance. The net balance
reflects a temporary position, and in the absence of market volatility we expect it will unwind as future cash flows become
less uncertain and are ultimately realised. Movement in the asymmetry is recognised in the Consolidated Statement of
Comprehensive Income and analysed in Note 4 Fee and commission income. We refer to it throughout this Annual Report
and Accounts as the impact of policyholder tax asymmetry.
Under normal conditions this asymmetry is small, but market volatility can result in significant balances. Market falls
in early 2020 led to positive movements in policyholder tax asymmetry. Strong market growth in 2021 then resulted in a
substantial unwind of this asymmetry, which gave rise to a negative impact of £52.9 million on IFRS profit after tax and IFRS
profit before shareholder tax in the prior year. 2022 has again seen significant market falls, resulting in a positive movement
of £50.6 million. This leads to a £103.5 million year-on-year difference in both IFRS profit after tax and IFRS profit before
shareholder tax.
Ultimately the effect will be eliminated from the Consolidated Statement of Financial Position, and so it is temporary and
we expect it to reverse as markets increase again.
Shareholder tax reflects the tax charge attributable to shareholders and is closely related to the performance of the business.
However, it can vary year-on-year due to several factors: further detail is set out in Note 7 Income and deferred taxes.
Underlying profit
This is IFRS profit before shareholder tax (as calculated above) adjusted to remove the impact of accounting for deferred
acquisition costs (DAC), deferred income (DIR) and the purchased value of in-force business (PVIF).
IFRS requires certain up-front expenses incurred and income received to be deferred. The deferred amounts are initially
recognised on the Statement of Financial Position as a DAC asset and DIR liability, which are subsequently amortised to
the Statement of Comprehensive Income over a future period. Substantially all of the Group’s deferred expenses are
amortised over a 14-year period, and substantially all deferred income is amortised over a six-year period.
The impact of accounting for DAC, DIR and PVIF in the IFRS result is that there is a significant accounting timing difference
between the emergence of accounting profits and actual cash flows. For this reason, Underlying profit is considered to
be a helpful metric. The following table demonstrates the way in which IFRS profit reconciles to Underlying profit.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
IFRS profit before shareholder tax 501.8 353.8
Remove the impact of movements in DAC/DIR/PVIF 13.0 30.6
Underlying profit before shareholder tax 514.8 384.4
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The impact of movements in DAC, DIR and PVIF on IFRS profit before shareholder tax is further analysed as follows. Due to
policyholder tax on DIR, the amortisation of DIR during the year and DIR on new business for the year set out below cannot
be agreed to the figures provided in Note 8, which are presented before both policyholder and shareholder tax.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Amortisation of DAC (79.6) (86.1)
DAC on new business for the year 37.3 41.2
Net impact of DAC (42.3) (44.9)
Amortisation of DIR 166.2 164.8
DIR on new business for the year (133.7) (147.3)
Net impact of DIR 32.5 17.5
Amortisation of PVIF (3.2) (3.2)
Movement in year (13.0) (30.6)
Net impact of DAC
The scale of the £42.3 million negative overall impact of DAC on the IFRS result (2021: negative £44.9 million) is largely due
to changes arising from the 2013 Retail Distribution Review (RDR). After these changes, the level of expenses that qualified
for deferral reduced significantly, but the large balance accrued previously is still being amortised. As deferred expenses
are amortised over a 14-year period there is a significant transition period, which could last for another two or three years,
over which the amortisation of pre-RDR expenses previously deferred will significantly outweigh new post-RDR expenses
deferred despite significant business growth, resulting in a net negative impact on IFRS profits.
Net impact of DIR
The reduction in new business in the year means income deferred in 2022 is lower than it was in 2021. Income released
from the deferred income liability has remained broadly static. Together, these effects mean that DIR has had a positive
£32.5 million impact on the IFRS result in 2022 (2021: £17.5 million positive).
2.2 Cash result
The Cash result is used by the Board to assess and monitor the level of cash profit (net of tax) generated by the business.
It is based on IFRS with adjustments made to exclude policyholder balances and certain non-cash items, such as DAC, DIR,
deferred tax and equity-settled share-based payment costs. Further details, including the full definition of the Cash result,
can be found in the glossary of alternative performance measures on pages 272 to 274. Although the Cash result should
not be confused with the IAS 7 Consolidated Statement of Cash Flows, it provides a helpful supplementary view of the way
in which cash is generated and emerges within the Group.
The Cash result reconciles to Underlying profit, as presented in Section 2.1, as follows.
Year ended 31 December 2022 Year ended 31 December 2021
Before
shareholder
tax After tax
Before
shareholder
tax After tax
£’Million £’Million £’Million £’Million
Underlying profit 514.8 414.7 384.4 315.6
Equity-settled share-based payments 20.5 20.5 20.4 20.4
Impact of deferred tax – 30.5 – (0.5)
Impact of policyholder tax asymmetry (50.6) (50.6) 52.9 52.9
Other 0.8 (5.0) 2.9 (1.0)
Cash result 485.5 410.1 460.6 387.4
Equity-settled share-based payments have been static year on year, reflecting an increase in the number of shares and
share options granted during the year, offset by lapse rate adjustments for expected performance against scheme conditions.
The most significant impact of deferred tax is the recognition in the Cash result of the benefit from realising tax relief on
capital losses and deferred expenses. This has already been recognised under IFRS, and hence Underlying profit, through
the establishment of deferred tax assets. More information can be found in Note 7.
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Financial review
2.2 Cash result continued
The impact of policyholder tax asymmetry is a temporary effect caused by asymmetries between fund tax deductions
and the policyholder tax due to HMRC. Movement in the asymmetry can be significant in volatile markets such as were
experienced in 2022. For further explanation, refer to page 74.
Other represents a number of other small items, including the difference between the lease expense recognised under
IFRS 16 Leases and lease payments made.
The following table shows an analysis of the Cash result using two different measures:
Underlying cash result
This measure represents the regular emergence of cash from the business, excluding any items of a one-off nature and
temporary timing differences; and
Cash result
This measure includes items of a one-off nature and temporary timing differences.
Consolidated cash result (presented post-tax)
Note
Year ended 31 December 2022
Year ended
31 December
2021
In-force New business Total Total
£’Million £’Million £’Million £’Million
Net annual management fee 1 961.0 59.6 1,020.6 1,001.6
Reduction in fees in gestation period 1 (412.9) – (412.9) (424.1)
Net income from FUM 1 548.1 59.6 607.7 577.5
Margin arising from new business 2 – 122.4 122.4 146.4
Controllable expenses 3 (19.9) (258.0) (277.9) (264.6)
Asia – net investment 4 – (11.3) (11.3) (13.6)
DFM – net investment 4 – (10.9) (10.9) (9.6)
Regulatory fees and FSCS levy 5 (4.0) (36.0) (40.0) (37.8)
Shareholder interest 6 15.9 – 15.9 6.2
Tax relief from capital losses 7 20.7 – 20.7 9.2
Miscellaneous 8 (16.5) – (16.5) (12.5)
Underlying cash result 544.3 (134.2) 410.1 401.2
Restructuring 9 – – – (9.7)
Change in capitalisation policy 10 – – – (4.1)
Cash result 544.3 (134.2) 410.1 387.4
Notes to the Cash result
1. Net income from FUM
The net annual management fee is the net manufacturing margin that the Group retains from FUM after payment of
the associated costs: for example, investment advisory fees and Partner remuneration. Each product has standard fees,
but they vary between products. Overall post-tax margin on FUM reflects business mix but also the different tax treatment,
particularly life insurance tax on onshore investment business.
As noted on page 70 however, our investment and pension business product structure means that these products do not
generate net Cash result, after the margin arising from new business, during the first six years. This is known as the ‘gestation
period’ and is reflected in the reduction in fees in gestation period line.
Net income from FUM reflects Cash result income from FUM that has reached maturity, including FUM which has
emerged from the gestation period during the year, and this line is the focus of our explanatory analysis. As with net
annual management fees, the average rate can vary over time with business mix and tax. For 2022, our net income
from FUM is within our range of 0.63% – 0.65%. As this is a post-tax margin, the increase in the main rate of corporation tax
from 19% to 25% from 1 April 2023 will result in the net income from FUM margin moving to a range of 0.59% – 0.61% for 2023.
There will be another, more modest impact in 2024 when the tax rate will be 25% for the full year.
Net income from Asia and DFM FUM is not included in this line. Instead, this is included in the Asia – net investment and
DFM – net investment lines.
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2. Margin arising from new business
This is the net positive Cash result impact of new business in the year, reflecting initial charges levied on gross inflows and
new-business-related expenses. The majority of these expenses vary with new business levels, such as the incremental
third-party administration costs of setting up a new policy on our back-office systems, and payments to Partners for
the initial advice provided to secure clients’ investment. As a result, gross inflows are a key driver behind this line.
However, the margin arising from new business also contains some fixed expenses, and elements which do not vary
exactly in line with gross inflows. For example, our third-party administration tariff structure includes a fixed fee, and to
provide some stability for Partner businesses, elements of our support for them are linked to prior-year new business levels.
Therefore, whilst the margin arising from new business tends to move directionally with the scale of gross inflows
generated during the year, the relationship between the two is not linear.
3. Controllable expenses
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Establishment expenses 198.9 200.3
Development expenses 67.4 54.0
Academy 11.6 10.3
Controllable expenses 277.9 264.6
As stated in the Chief Financial Officer’s report, as part of the 2025 business planning assumptions we set our ambition to
contain growth in controllable expenses to around 5% per annum. Controllable expenses, which are the categories shown
in the table above (stated after tax), are a key metric for the business and we are pleased to have delivered against our
guidance despite the high inflationary environment, with these costs increasing by 5% to £277.9 million.
Establishment expenses in 2022 were broadly flat year on year at £198.9 million (2021: £200.3 million). These costs
predominantly relate to people, property and technology and hence are relatively fixed in nature.
Development expenses were £67.4 million (2021: £54.0 million). Our investment in technology, alongside our commitment
to making it easier to do business, is the driver behind the increase in our development expenses. We continue to improve
our technology infrastructure and data quality, and to invest in Salesforce. We have also seen the successful phased
launch of our new client app during the year.
Reflecting its critical role in providing a source of future organic growth in our adviser population, we continue to invest
in building our Academy programme. The transition to a hybrid format, where we combine in-class learning with greater
digital content, has meant we have been able to scale up our Academy programmes efficiently.
4. Asia and DFM
These lines represent the net income from Asia and DFM FUM. They include the Asia and DFM expenses set out in the
reconciliation on page 79 between expenses presented separately on the face of the Cash result before tax and IFRS
expenses.
We have continued to invest in developing our presence in Asia, as well as in discretionary fund management via
Rowan Dartington both in the UK and overseas. Whilst both have been impacted by the challenging market conditions in
2022, they have each achieved outcomes broadly in line with prior guidance and are positioned well for the years ahead.
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Financial review
2.2 Cash result continued
5. Regulatory fees and FSCS levy
The costs of operating in a regulated sector include regulatory fees and the Financial Services Compensation Scheme
(FSCS) levy. On a post-tax basis, these are as follows:
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
FSCS levy 27.3 28.1
Regulatory fees 12.7 9.7
Regulatory fees and FSCS levy 40.0 37.8
Our position as a market-leading provider of advice means we make a very substantial contribution to supporting the
FSCS, thereby providing protection for clients of other businesses in the sector that fail. Whilst the FSCS levy across the
industry has fallen significantly for the current year, our charge has only reduced modestly due to substantial gains in
our market share.
6. Shareholder interest
This is the income accruing on the investments and cash held for regulatory purposes together with the interest received
on the surplus capital held by the Group. It is presented net of funding-related expenses, including interest paid on
borrowings and securitisation costs. It has increased significantly during the year following rises in the Bank of England
base rate.
7. Tax relief from capital losses
A deferred tax asset has been recognised under IFRS for historic capital losses which were regarded as being capable of
utilisation over the medium term. The tax asset is ignored for Cash result purposes as it is not fungible, but instead the cash
benefit realised when losses are utilised is shown in the tax relief from capital losses line.
Utilisation during the year of £20.7 million tax value (2021: £9.2 million) arose due to the market conditions prevailing
at 31 December 2022. The remaining tax value of capital losses stands at £2.1 million (31 December 2021: £26.8 million),
which we expect to utilise in 2023.
8. Miscellaneous
This category represents the net cash flow of the business not covered in any of the other categories. It includes Group
contributions to the St. James's Place Charitable Foundation and movements in the fair value of renewal income assets.
9. Restructuring
In 2021 we recognised the one-off cost of a restructuring exercise associated with an employee redundancy programme
in the year. As expected, there were no such costs for 2022.
10. Change in capitalisation policy
In 2021 we recognised a further one-off cost of £4.1 million as a result of the International Financial Reporting Standards
Interpretations Committee providing additional guidance on the recognition of software configuration costs. In line with
the wider industry we reflected this guidance in a change in capitalisation policy. Again as expected, there were no such
costs for 2022.
Reconciliation of Cash result expenses to IFRS expenses
Whilst certain expenses are recognised in separate line items on the face of the Cash result, expenses which vary with
business volumes, such as payments to Partners and third-party administration expenses, and expenses which relate
to investment in specific areas of the business such as DFM, are netted from the relevant income lines rather than
presented separately. In order to reconcile to the IFRS expenses presented on the face of the Consolidated Statement
of Comprehensive Income on page 188, the expenses netted from income lines in the Cash result need to be added in,
as do certain IFRS expenses which by definition are not included in the Cash result. In addition, all expenses need to be
converted from post-tax, as they are presented in the Cash result, to pre-tax, as they are presented under IFRS.
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Expenses presented on the face of the Cash result before and after tax are set out below.
Year ended 31 December 2022 Year ended 31 December 2021
Before tax Tax rate After tax Before tax Tax rate After tax
£’Million Percentage £’Million £’Million Percentage £’Million
Controllable expenses
Establishment expenses 245.5 19.0% 198.9 247.3 19.0% 200.3
Development expenses 83.2 19.0% 67.4 66.7 19.0% 54.0
Academy 14.3 19.0% 11.6 12.7 19.0% 10.3
Total controllable expenses 343.0 277.9 326.7 264.6
Other costs presented separately on the face of the
Cash result
Regulatory fees and FSCS levy 49.4 19.0% 40.0 46.6 19.0% 37.8
Restructuring – – – 12.0 19.0% 9.7
Change in capitalisation policy – – – 5.1 19.0% 4.1
Total expenses presented separately on the face of the
Cash result 392.4 317.9 390.4 316.2
The total expenses presented separately on the face of the Cash result before tax then reconciles to IFRS expenses as set
out below.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Total expenses presented separately on the face of the Cash result before tax 392.4 390.4
Expenses which vary with business volumes
Other performance-related costs 160.4 145.0
Payments to Partners 1,011.8 988.0
Investment expenses 85.7 88.0
Third-party administration 135.0 128.0
Other 57.0 64.3
Expenses relating to investment in specific areas of the business
Asia expenses 20.9 23.3
DFM expenses 35.7 31.0
Total expenses included in the Cash result 1,898.9 1,858.0
Expenses which are not included in the Cash result
Amortisation of DAC and PVIF, net of additions 45.5 48.1
Equity-settled share-based payments expenses 20.5 20.4
Other 1.3 4.8
Total IFRS Group expenses before tax 1,966.2 1,931.3
Expenses which vary with business volumes
Other performance-related costs, for both Partners and employees, vary with the level of new business and the operating
profit performance of the business. Payments to Partners, investment expenses and third-party administration costs
are met through charges to clients, and so any variation in them from changes in the volumes of new business or the level
of the stock markets does not impact Group profitability significantly.
Each of these items is recognised within the most relevant line of the Cash result, which is determined based on the nature
of the expense. In most cases, this is either the net annual management fee or margin arising from new business lines.
Other expenses include interest expense and bank charges, operating costs of acquired financial adviser businesses
and donations to the St. James’s Place Charitable Foundation. They are recognised across various lines in the Cash result,
including shareholder interest and miscellaneous.
Expenses relating to investment in specific areas of the business
Asia expenses and DFM expenses both reflect disciplined expense control during the year, whilst continuing to invest
to support growth. Such investment will continue going forward.
In the Cash result, Asia and DFM expenses are presented net of the income they generate in the Asia – net investment
and DFM – net investment lines.
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2.2 Cash result continued
Expenses which are not included in the Cash result
DAC amortisation, net of additions, PVIF amortisation and equity-settled share-based payment expenses are the primary
expenses which are recognised under IFRS but are excluded from the Cash result.
Derivation of the Cash result
The Cash result is derived from the IFRS Consolidated Statement of Financial Position in a two-stage process:
Stage 1: Solvency II Net Assets Balance Sheet
Firstly, the IFRS Consolidated Statement of Financial Position is adjusted for a number of material balances that reflect
policyholder interests in unit-linked liabilities together with the underlying assets that are held to match them. Secondly,
it is adjusted for a number of non-cash ‘accounting’ balances such as DIR, DAC and associated deferred tax. The result of
these adjustments is the Solvency II Net Assets Balance Sheet and the following table shows the way in which it has been
calculated at 31 December 2022.
31 December 2022 Note
IFRS Balance
Sheet Adjustment 1 Adjustment 2
Solvency II Net
Assets Balance
Sheet
Solvency II Net
Assets Balance
Sheet: 2021
£’Million £’Million £’Million £’Million £’Million
Assets
Goodwill 33.6 – (33.6) – –
Deferred acquisition costs 337.3 – (337.3) – –
Purchased value of in-force business 11.2 – (11.2) – –
Computer software 33.3 – (33.3) – –
Property and equipment 1 145.7 – – 145.7 154.5
Deferred tax assets 2 13.9 – (11.4) 2.5 5.0
Investment in associates 1.4 – – 1.4 1.4
Reinsurance assets 66.4 – (66.4) – –
Other receivables 3 2,982.8 (1,604.8) (3.2) 1,374.8 1,587.6
Income tax assets 7 35.0 – – 35.0 –
Investment property 1,294.5 (1,294.5) – – –
Equities 103,536.0 (103,536.0) – – –
Fixed income securities 4 27,552.7 (27,544.8) – 7.9 7.8
Investment in Collective Investment Schemes 4 5,735.4 (4,463.7) – 1,271.7 1,605.3
Derivative financial instruments 3,493.0 (3,493.0) – – –
Cash and cash equivalents 4 6,432.8 (6,179.5) – 253.3 245.7
Total assets 151,705.0 (148,116.3) (496.4) 3,092.3 3,607.3
Liabilities
Borrowings 5 163.8 – – 163.8 433.0
Deferred tax liabilities 2 162.9 – 2.2 165.1 624.4
Insurance contract liabilities 483.5 (414.9) (68.6) – –
Deferred income 530.4 – (530.4) – –
Other provisions 6 46.0 – – 46.0 44.1
Other payables 1, 3 2,198.6 (842.0) (19.1) 1,337.5 1,254.4
Investment contract benefits 106,964.7 (106,964.7) – – –
Derivative financial instruments 3,266.3 (3,266.3) – – –
Net asset value attributable to unit holders 36,628.4 (36,628.4) – – –
Income tax liabilities 7 – – – – 6.1
Total liabilities 150,444.6 (148,116.3) (615.9) 1,712.4 2,362.0
Net assets 1,260.4 – 119.5 1,379.9 1,245.3
Adjustment 1 strips out the policyholder interest in unit-linked assets and liabilities, to present solely shareholder-
impacting balances. For further information refer to Note 11 Investments, investment property and cash and cash
equivalents within the IFRS Financial Statements.
Adjustment 2 removes items such as DAC, DIR, PVIF and their associated deferred tax balances from the IFRS Statement
of Financial Position to bring it in line with Solvency II recognition requirements.
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Notes to the Solvency II Net Assets Balance Sheet
1. Property and equipment, and other payables
£114.4 million (2021: £120.3 million) of the property and equipment balance represents the right to use leased assets. It has
decreased year-on-year as the leased assets are depreciated. Lease liabilities of £116.6 million are recognised within the
other payables line (2021: £124.1 million). These have decreased as lease payments are made.
Note 9 Property and equipment, including leased assets, Note 10 Leases and Note 13 Other payables to the IFRS Financial
Statements provide further detail.
2. Deferred tax assets and liabilities
Analysis of deferred tax assets and liabilities, including how they have moved year on year, is set out in Note 7 Income
and deferred taxes within the IFRS Financial Statements.
3. Other receivables and other payables
Detailed breakdowns of other receivables and other payables can be found in Note 12 Other receivables and Note 13 Other
payables within the IFRS Financial Statements.
Other receivables on the Solvency II Net Assets Balance Sheet have decreased from £1,587.6 million at 31 December 2021
to £1,374.8 million at 31 December 2022, principally reflecting the sale to a third-party of a portfolio of business loans to
Partners. Further information on business loans to Partners and the sale during the year is set out overleaf and in Note 12
Other receivables.
Within other receivables there are two items which merit further analysis:
Operational readiness prepayment asset
One of the items within other receivables is the operational readiness prepayment asset. This arose from the investment
we have made into our back-office infrastructure project, which was a complex, multi-year programme. In addition to
expensing our internal project costs through the IFRS Statement of Comprehensive Income and Cash result as incurred,
we capitalised Bluedoor development costs as a prepayment asset on the IFRS Statement of Financial Position. The asset,
which stood at £278.3 million at 31 December 2022 (31 December 2021: £296.3 million) has been amortising through the IFRS
Statement of Comprehensive Income and the Cash result since 2017 and will continue to do so over the remaining life of
the contract, which at 31 December 2022 is 11 years.
During 2022 a project to migrate our offshore business onto Bluedoor commenced, which added £6.7 million to the total
operational readiness prepayment asset. We expect to add approximately £40 million to the total operational readiness
prepayment over the course of the project.
The movement schedule below demonstrates how the operational readiness prepayment has developed over the past
two years.
2022 2021
£’Million £’Million
Cost
At 1 January 413.5 406.6
Additions during the year 6.7 6.9
At 31 December 420.2 413.5
Accumulated amortisation
At 1 January (117.2) (92.7)
Amortisation during the year (24.7) (24.5)
At 31 December (141.9) (117.2)
Net book value 278.3 296.3
The amortisation expense is recognised within third-party administration expenses in the IFRS result, and within the net
annual management fee and margin arising from new business lines of the Cash result. It is more than offset by the lower
tariff charges on Bluedoor compared to the previous system, which grow as the business grows, benefiting both the IFRS
and Cash results.
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Financial review
2.2 Cash result continued
Business loans to Partners
Facilitating business loans to Partners is a key way in which we are able to support growing Partner businesses. Such loans
are principally used to enable Partners to take over the businesses of retiring or downsizing Partners, and this process
creates broad stakeholder benefits. First, clients benefit from enhanced continuity of St. James’s Place advice and service
over time; second, Partners are able to build and ultimately realise value in the high-quality and sustainable businesses
they have created; and finally, the Group and, in turn, shareholders, benefit from high levels of adviser and client retention.
In addition to recognising a strong business case for facilitating such lending, we recognise too the fundamental strength
and credit quality of business loans to Partners. Over more than ten years, cumulative write-offs have totalled less than 5bps
of gross loans advanced, with such low impairment experience attributable to a number of factors that help to mitigate
the inherent credit risk in lending. These include taking a cautious approach to Group credit decisions, with lending secured
against prudent business valuations. Demonstrating this, loan-to-value (LTV) information is set out in the table below.
31 December
2022
31 December
2021
Aggregate LTV across the total Partner lending book 32% 29%
Proportion of the book where LTV is over 75% 10% 7%
Net exposure to loans where LTV is over 100% (£’Million) 6.3 4.6
If FUM were to decrease by 10%, the net exposure to loans where LTV is over 100% at 31 December 2022 would increase to
£9.3 million (31 December 2021: increase to £6.6 million).
Our credit experience also benefits from the repayment structure of business loans to Partners. The Group collects advice
charges from clients. Prior to making the associated payment to Partners, we deduct loan capital and interest payments
from the amount due. This means the Group is able to control repayments.
During the year we have continued to facilitate business loans to Partners. However, the balance has decreased
significantly due to the sale to a third-party of a portfolio of £262.5 million business loans to Partners previously recognised
on the Consolidated Statement of Financial Position. Further information is provided in Note 12 Other receivables.
31 December
2022
31 December
2021
£’Million £’Million
Total business loans to Partners 315.6 521.6
Split by funding type:
Business loans to Partners directly funded by the Group 315.6 307.6
Securitised business loans to Partners – 214.0
4. Liquidity
Cash generated by the business is held in highly rated government securities, AAA-rated money market funds, and bank
accounts. Although these are all highly liquid, only the latter is classified as cash and cash equivalents on the Solvency II
Net Assets Balance Sheet. The total liquid assets held are as follows.
31 December
2022
31 December
2021
£’Million £’Million
Fixed interest securities 7.9 7.8
Investment in Collective Investment Schemes (AAA-rated money market funds) 1,271.7 1,605.3
Cash and cash equivalents 253.3 245.7
Total liquid assets 1,532.9 1,858.8
The Group’s primary source of net cash generation is product charges. In line with profit generation, as most of our
investment and pension business enters a gestation period, there is no cash generated (apart from initial charges)
for the first six years of an investment. This means that the amount of cash generated will increase year on year
as FUM in the gestation period becomes mature and is subject to annual product management charges. Unit trust
and ISA business does not enter the gestation period, and so generates cash immediately from the point of investment.
Cash is used to invest in the business and to pay the Group dividend. Our dividend guidance is set such that appropriate
cash is retained in the business to support the investment needed to meet our future growth aspirations.
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Our most significant investment in the business in recent years has been the development of Bluedoor, which has had
a substantial impact on our liquid assets and borrowings positions. This project and all associated decommissioning
was completed in relation to our UK business in 2020. As noted on page 81, a project to migrate our offshore business
onto Bluedoor commenced during the year. This is much smaller in scale than the migration of our UK business and so
will have limited impact on liquidity and borrowings.
5. Borrowings
The Group continues to pursue a strategy of diversifying and broadening its access to debt finance. We have done this
successfully over time, including via the creation and execution of the securitisation vehicle referred to in previous years.
For accounting purposes we are obliged to disclose on our Consolidated Statement of Financial Position the value of loan
notes relating to the securitisation. Due to the sale during the year of a portfolio of business loans to Partners backing
these loan notes, this balance was repaid in full during the year and so is negligible at 31 December 2022; but in the prior
year the balance of £162.4 million inflated the reported level of borrowings. However, as the securitisation loan notes were
secured only on the securitised portfolio of business loans to Partners, they were non-recourse to the Group’s other assets.
This means that the senior tranche of non-recourse securitisation loan notes, whilst included within borrowing, were very
different from the Group’s senior unsecured corporate borrowings, which are used to manage working capital and fund
investment in the business. Senior unsecured corporate borrowings reduced from £270.6 million at 31 December 2021 to
£163.8 million at 31 December 2022, driven by the cash realised from the sale of the portfolio of business loans to Partners.
Further information is provided in Note 16 Borrowings and financial commitments within the IFRS Financial Statements.
31 December
2022
31 December
2021
£’Million £’Million
Corporate borrowings: bank loans – 106.8
Corporate borrowings: loan notes 163.8 163.8
Senior unsecured corporate borrowings 163.8 270.6
Senior tranche of non-recourse securitisation loan notes – 162.4
Total borrowings 163.8 433.0
During the year our revolving credit facility, one of our primary senior unsecured corporate borrowings facilities, was renewed.
The facility increased from £340 million to £345 million, which is repayable at maturity in 2027. For further information see
Note 16 Borrowings and financial commitments.
6. Other provisions
Further information on other provisions, including how the balance has moved year on year, is set out in Note 15 Other
provisions and contingent liabilities within the IFRS Financial Statements.
7. Income tax liabilities
The Group has an income tax asset of £35.0 million at 31 December 2022 compared to a liability of £6.1 million at
31 December 2021. This is due to a current tax charge of £79.7 million, tax paid of £121.1 million and the impact of acquisitions
and disposals of Group entities of a £0.3 million charge during the year. Further detail is provided in Note 7 Income and
deferred taxes.
Stage 2: Movement in Solvency II Net Assets Balance Sheet
After the Solvency II Net Assets Balance Sheet has been determined, the second stage in the derivation of the Cash result
identifies a number of movements in that balance sheet which do not represent cash flows for inclusion within the Cash
result. The following table explains how the overall Cash result reconciles to the total movement.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Opening Solvency II net assets 1,245.3 1,218.6
Dividend paid (303.9) (329.9)
Issue of share capital and exercise of options 14.5 29.0
Consideration paid for own shares (0.3) –
Change in deferred tax (30.5) 0.5
Impact of policyholder tax asymmetry 50.6 (52.9)
Change in goodwill, intangibles and other non-cash movements (10.9) (7.4)
Non-controlling interests arising on the part-disposal of subsidiaries 5.0 –
Cash result 410.1 387.4
Closing Solvency II net assets 1,379.9 1,245.3
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2.3 European Embedded Value (EEV)
Wealth management differs from most other businesses, in that the expected shareholder income from client investment
activity emerges over a long period in the future. We therefore supplement the IFRS and Cash results by providing additional
disclosure on an EEV basis, which brings into account the net present value of the expected future cash flows. We believe
that a measure of the total economic value of the Group’s operating performance is useful to investors.
As in previous reporting, our EEV continues to be calculated on a basis determined in accordance with the EEV principles
originally issued in May 2004 by the Chief Financial Officers Forum (CFO Forum) and supplemented both in October 2005
and, following the introduction of Solvency II, in April 2016.
Many of the principles and practices underlying EEV are similar to the requirements of Solvency II, and we have sought
to align them as closely as possible. The table below and accompanying notes summarise the profit before tax of the
combined business.
Note
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Funds management business 1 1,725.8 1,662.9
Distribution business 2 (58.8) (24.4)
Other (77.3) (93.1)
EEV operating profit 1,589.7 1,545.4
Investment return variance 3 (1,314.0) 894.5
Economic assumption changes 4 235.1 4.2
EEV profit before tax 510.8 2,444.1
Tax (139.4) (578.7)
Corporation tax rate change 5 – (412.7)
EEV profit after tax 371.4 1,452.7
A reconciliation between EEV operating profit before tax and IFRS profit before tax is provided in Note 3 Segment Reporting
within the IFRS Financial Statements.
Notes to the EEV result
1. Funds management business EEV operating profit
The funds management business operating profit has increased to £1,725.8 million (2021: £1,662.9 million) and a full analysis
of the result is shown below.
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
New business contribution 977.2 1,002.2
Profit from existing business
– unwind of the discount rate 440.7 275.8
– experience variance 89.0 89.5
– operating assumption change 210.1 293.0
Investment income 8.8 2.4
Funds management EEV operating profit 1,725.8 1,662.9
The new business contribution for the year at £977.2 million (2021: £1,002.2 million) was 2.5% lower than the prior year,
primarily reflecting the reduction in new business volumes.
The unwind of the discount rate for the year was higher at £440.7 million (2021: £275.8 million), reflecting the larger in-force
book at the start of 2022 compared to 2021, and an increase in the opening risk discount rate to 4.2% (2021: 3.4%).
The experience variance during the year was £89.0 million (2021: £89.5 million). This reflects positive retention experience
over the year partially offset by increased development expenses.
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The impact of operating assumption changes in the year was a positive £210.1 million (2021: positive £293.0 million).
The change in the current year arises from a small improvement to the persistency assumptions for unit trust and ISA
business, similar to the change in 2021 which arose due to a small improvement to the persistency assumptions for
onshore bond and pension business. Both of the changes reflect positive retention experience over recent years.
No further changes to persistency assumptions are expected in the short to medium term.
2. Distribution business
The distribution loss includes the positive gross margin arising from advice income less payments to advisers, offset by
the costs of supporting the Partnership and building the distribution capabilities in Asia. The gross margin has decreased
year on year reflecting lower new business volumes and the fact that some elements of our support for the Partnership are
linked to prior-year new business levels. The FSCS levy expense for our distribution business remained high at £23.8 million
(2021: £23.6 million), impacting the reported loss.
3. Investment return variance
The investment return variance reflects the capitalised impact on the future annual management fees resulting from the
difference between the actual and assumed investment returns. Given the size of our FUM, a small difference can result
in a large positive or negative variance.
The typical investment return on our funds during the year was negative 9% after charges, compared to the assumed
investment return of positive 2%. This resulted in a negative investment return variance of £1,314.0 million (2021: positive
£894.5 million).
4. Economic assumption changes
The positive variance of £235.1 million arising in the year (2021: positive £4.2 million) reflects the positive effect from the
increase in the risk-free rate, combined with a decrease in the expected long-term rate of inflation.
5. Corporation tax rate change
In the UK Budget of 3 March 2021 it was announced that the main rate of corporation tax will increase from 19% to 25% with
effect from 1 April 2023. This change was substantively enacted on 24 May 2021 within the Finance Bill 2021 and as a result
the relevant deferred tax balances were remeasured in the prior year.
New business margin
The largest single element of the EEV operating profit (analysed in the previous section) is the new business contribution.
The level of new business contribution generally moves in line with new business levels. To demonstrate this link, and aid
understanding of the results, we provide additional analysis of the new business margin (the margin). This is calculated
as the new business contribution divided by the gross inflows, and is expressed as a percentage.
The table below presents the margin before tax from our manufactured business.
Year ended
31 December
2022
Year ended
31 December
2021
Investment
New business contribution (£’Million) 148.2 153.0
Gross inflows (£’Billion) 2.31 2.62
Margin (%) 6.4 5.8
Pension
New business contribution (£’Million) 495.3 512.0
Gross inflows (£’Billion) 9.90 9.86
Margin (%) 5.0 5.2
Unit trust and DFM
New business contribution (£’Million) 333.7 337.2
Gross inflows (£’Billion) 4.82 5.72
Margin (%) 6.9 5.9
Total business
New business contribution (£’Million) 977.2 1,002.2
Gross inflows (£’Billion) 17.03 18.20
Margin (%) 5.7 5.5
Post-tax margin (%) 4.3 4.2
The overall margin for the year was 5.7% (2021: 5.5%). The improvement year on year is due to a combination of the positive
impact of the change in persistency for unit trust and ISA business, and controlled expenses.
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Financial review
2.3 European Embedded Value (EEV) continued
Economic assumptions
The principal economic assumptions used within the cash flows at 31 December are set out below.
Year ended
31 December
2022
Year ended
31 December
2021
Risk-free rate 3.9% 1.1%
Inflation rate 3.6% 4.0%
Risk discount rate 7.0% 4.2%
Future investment returns:
– Gilts 3.9% 1.1%
– Equities 6.9% 4.1%
– Unit-linked funds 6.2% 3.4%
Expense inflation 3.9% 4.4%
The risk-free rate is set by reference to the yield on ten-year gilts. Other investment returns are set by reference to the
risk-free rate.
The inflation rate is derived from the implicit inflation in the valuation of ten-year index-linked gilts. This rate is increased
to reflect higher increases in earnings-related expenses.
EEV sensitivities
The table below shows the estimated impact on the reported value of new business and EEV to changes in various
EEV-calculated assumptions. The sensitivities are specified by the EEV principles and reflect reasonably possible levels
of change. In each case, only the indicated item is varied relative to the restated values.
Note
Change in new business
contribution
Change in
European
Embedded
Value
Pre-tax Post-tax Post-tax
£’Million £’Million £’Million
Value at 31 December 2022 977.2 739.2 9,064.7
100bp reduction in risk-free rates, with corresponding change in fixed
interest asset values 1 (16.9) (12.9) (77.5)
10% increase in withdrawal rates 2 (75.7) (57.1) (479.5)
10% reduction in market value of equity assets 3 – – (865.3)
10% increase in expenses 4 (15.7) (11.9) (90.6)
100bps increase in assumed inflation 5 (20.8) (15.8) (104.0)
Notes to the EEV sensitivities
1. This is the key economic basis change sensitivity. The business model is relatively insensitive to change in economic
basis. Note that the sensitivity assumes a corresponding change in all investment returns but no change in inflation.
2. The 10% increase is applied to the withdrawal rate. For instance, if the withdrawal rate is 8% then a 10% increase would
reflect a change to 8.8%.
3. For the purposes of this sensitivity all unit-linked funds are assumed to be invested in equities. The actual mix of assets
varies and in recent years the proportion invested directly in UK and overseas equities has exceeded 70%.
4. For the purposes of this sensitivity only non-fixed elements of the expenses are increased by 10%.
5. This reflects a 100bps increase in the assumed RPI underlying the expense inflation calculation.
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Change in new business
contribution
Change in
European
Embedded
Value
Pre-tax Post-tax Post-tax
£’Million £’Million £’Million
100bps reduction in risk discount rate 124.8 94.1 720.6
Although not directly relevant under a market-consistent valuation, this sensitivity shows the level of adjustment which
would be required to reflect differing investor views of risk.
Analysis of the EEV result
The table below provides a summarised breakdown of the embedded value position at the reporting dates.
31 December
2022
31 December
2021
£’Million £’Million
Value of in-force business 7,684.8 7,712.1
Solvency II net assets 1,379.9 1,245.3
Total embedded value 9,064.7 8,957.4
31 December
2022
31 December
2021
£ £
Net asset value per share 16.66 16.57
The EEV result above reflects the specific terms and conditions of our products. Our pension business is split between two
portfolios. Our current product, the Retirement Account, was launched in 2016 and incorporates both pre-retirement and
post-retirement phases of investment in the same product. Earlier business was written in our separate Retirement Plan
and Drawdown Plan products, targeted at each of the two phases separately, and therefore has a slightly shorter term
and lower new business margin.
Our experience is that much of our Retirement Plan business converts into Drawdown Plan business at retirement, but,
in line with the EEV guidelines, we are required to defer recognition of the additional value from the Drawdown Plan until
it crystallises. If instead we were to assess the future value of Retirement Plan business (beyond the immediate contract
boundary) in a more holistic fashion, in line with Retirement Account business, this would result in an increase of
approximately £340 million to our embedded value at 31 December 2022 (31 December 2021: £395 million).
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Financial review
Section 3
Solvency
St. James’s Place has a business model and risk appetite that result in underlying assets being held that fully match
our obligations to clients. Our clients can access their investments ‘on demand’ and because the encashment value
is matched, movements in equity markets, currency markets, interest rates, mortality, morbidity and longevity have very
little impact on our ability to meet liabilities. We also have a prudent approach to investing shareholder funds and surplus
assets in cash, AAA-rated money market funds and highly rated government securities. The overall effect of the business
model and risk appetite is a resilient solvency position capable of enabling liabilities to be met even during adverse
market conditions.
Our Life businesses are subject to the Solvency II capital regime which applied for the first time in 2016. Given the relative
simplicity of our business compared to many, if not most, other organisations that fall within the scope of Solvency II, we
have continued to manage the solvency of the business on the basis of holding assets to match client unit-linked liabilities
plus a management solvency buffer (MSB). This has ensured that not only can we meet client liabilities at all times (beyond
the Solvency II requirement of a ‘1-in-200 years’ event), but we also have a prudent level of protection against other risks
to the business. At the same time, we have ensured that the resulting capital held meets with the requirements of the
Solvency II regime, to which we are ultimately accountable.
For the year ended 31 December 2022 we reviewed the level of our MSB for the life businesses, and chose to maintain it
at £355.0 million (31 December 2021: £355.0 million).
The Group’s overall Solvency II net assets position, MSB, and management solvency ratios are as follows.
31 December 2022
Life
1
Other
regulated Other
1,2
Total
31 December
2021 total
£’Million £’Million £’Million £’Million £’Million
Solvency II net assets 377.7 323.2 679.0 1,379.9 1,245.3
MSB 355.0 177.7 – 532.7 518.0
Management solvency ratio 106% 182%
1 After payment of year-end intra-Group dividend.
2 Before payment of the Group final dividend.
Solvency II Balance Sheet
Whilst we focus on Solvency II net assets and the MSB to manage solvency, we provide additional information about the
Solvency II free asset position for information. The presentation starts from the same Solvency II net assets, but includes
recognition of an asset in respect of the expected value of in-force (VIF) cash flows and a risk margin (RM) reflecting the
potential cost to secure the transfer of the business to a third party. The Solvency II net assets, VIF and RM comprise the
‘own funds’, which are assessed against our regulatory solvency capital requirement (SCR), reflecting the capital required
to protect against a range of ‘1-in-200’ stresses. The SCR is calculated on the standard formula approach. No allowance
has been made for transitional provisions in the calculation of technical provisions or the SCR.
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An analysis of the Solvency II position for our Group, split by regulated and non-regulated entities at the year-end,
is presented in the table below.
31 December 2022
Life
1
Other
regulated Other
1,2
Total
31 December
2021 total
£’Million £’Million £’Million £’Million £’Million
Solvency II net assets 377.7 323.2 679.0 1,379.9 1,245.3
Value of in-force (VIF) 5,580.4 – – 5,580.4 5,640.1
Risk margin (1,516.4) – – (1,516.4) (1,622.9)
Own funds (A) 4,441.7 323.2 679.0 5,443.9 5,262.5
Solvency capital requirement (B) (3,404.5) (118.0) – (3,522.5) (3,939.1)
Solvency II free assets 1,037.2 205.2 679.0 1,921.4 1,323.4
Solvency ratio (A/B) 130% 274% 155% 134%
1 After payment of year-end intra-Group dividend.
2 Before payment of the Group final dividend.
The solvency ratio after payment of the proposed Group final dividend is 149% at the year-end (31 December 2021: 128%).
We continue to target a solvency ratio of 110% for St. James's Place UK plc, our largest insurance subsidiary, as agreed with
our regulator the PRA. The combined solvency ratio for our life companies, after payment of the year-end intra-Group
dividend, is 130% at 31 December 2022 (31 December 2021: 115%).
Solvency II sensitivities
The table below shows the estimated impact on the Solvency II free assets, the SCR and the solvency ratio from changes
in various assumptions underlying the Solvency II calculations. In each case, only the indicated item is varied relative to
the restated values.
The solvency ratio is not very sensitive to changes in experience or assumptions, and, due to the approach to matching
unit-linked liabilities with appropriate assets, can move counter-intuitively depending on circumstances, as demonstrated
by the sensitivity analysis presented below.
Note
Solvency II
free assets
Solvency II
capital
requirement
Solvency
ratio
£’Million £’Million %
Value at 31 December 2022 1,921.4 3,522.5 155%
100bps reduction in risk-free rates, with corresponding change in fixed
interest asset values 1 1,839.6 3,527.9 152%
10% increase in withdrawal rates 2 1,959.0 3,287.5 160%
10% reduction in market value of equity assets 3 2,088.6 2,929.3 171%
10% increase in expenses 4 1,866.6 3,518.8 153%
100bps increase in assumed inflation 5 1,867.1 3,523.3 153%
Notes to the Solvency II sensitivities
1. This is the key economic basis change sensitivity. The business model is relatively insensitive to change in economic
basis. Note that the sensitivity assumes a corresponding change in all investment returns but no change in inflation.
2. The 10% increase is applied to the lapse rate. For instance, if the lapse rate is 8% then a 10% increase would reflect a
change to 8.8%.
3. For the purposes of this sensitivity all unit-linked funds are assumed to be invested in equities. The actual mix of assets
varies and in recent years the proportion invested directly in UK and overseas equities has exceeded 70%. The sensitivity
reflects the impact of changes in the equity dampener on market risk capital.
4. For the purposes of this sensitivity all expenses are increased by 10%.
5. This reflects a 100bps increase in the assumed RPI underlying the expense inflation calculation.
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Our Risk Management and Control Framework
The internal control environment is built upon a strong
control culture and organisational assignment of
responsibility. The ’first line’ business is responsible
and accountable for risk management. This is then
combined with oversight from the ’second line’ risk,
controls and compliance functions, and assurance
from the ‘third line’ internal audit to form a ‘three lines
of defence’ model.
The Risk Management and Control Framework is a
combination of processes by which the Group identifies,
assesses, measures, manages and monitors the risks
that may impact on the successful delivery of its
strategic objectives. Based upon our risk appetite,
the risks identified are either accepted or appropriate
actions are taken to mitigate them.
The Board, through the Group Risk Committee, takes
an active role in overseeing the Risk Management and
Control Framework, for which it is responsible. As part
of this the Board robustly assesses its principal and
emerging risks, which are considered in regular
reporting and summarised annually in the Own Risk
and Solvency Assessment (ORSA); further information
on this is provided overleaf.
On behalf of the Board, the Group Audit Committee
takes responsibility for assessing the effectiveness of the
Group’s risk management and internal control systems,
covering all material controls, including financial,
operational and compliance controls. It does this via an
annual review of risk and control self-assessments and
monitoring of the effectiveness of the internal control
model throughout the year. The systems have been in
place for the year under review and up to the date of
approval of the Annual Report and Accounts.
The Board receives regular reports from the Group Risk
Committee and Group Audit Committee and approves
key aspects of the Group’s Risk Management and
Control Framework including the Risk Appetite Statement
and Group ORSA.
The diagram on the right depicts our Risk Management
and Control Framework.
Overview and culture
The business activities and the industry within which the
Group operates expose us to a wide variety of inherent
risks. Therefore, effective risk management, underpinned
by a good risk culture, is critical to our success. We
comprehensively identify and assess risks, agree our
appetite for those risks, and then manage them
accordingly. When assessing risks and deciding on the
appropriate response we consider the potential impacts
on our key stakeholders: clients, advisers, shareholders,
regulators, employees and society.
The inherent risk environment faced by the Group
changes over time as emerging factors and trends
(including political risks such as changes in taxation,
macroeconomic factors, cyber-crime and climate change)
may impact on our short- and/or longer-term profitability.
Under the leadership, direction and oversight of our Board,
these risks are carefully assessed and managed in order to
achieve our strategic objectives, as set out on pages 25 to 33.
We do not, and cannot, seek to eliminate risk entirely;
rather we aim to understand our risks and deal with
them appropriately. The emphasis is on applying effective
risk management strategies, so that all material risks are
identified and managed within the agreed risk appetite.
Risk management is embedded within our culture and
therefore is a core aspect of decision-making.
Risk management forms a key part of the business planning
process, including decisions on strategic developments
affecting our client and Partner propositions, investments,
and dividend payments.
Effective risk management
Risk and risk management
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Risk escalation
Risk Governance
Risk Capital
Risk Management and Control Framework
Strategy – Key outcomes
1. Loss event reporting
2. Emerging risk assessment
3. Stress and scenario testing
4. Risk and controls self-
assessment
5. Operational risk assessments
6. Reverse stress testing
7. Own Risk and Solvency
Assessment
8. Recovery and resolution
planning
9. Risk registers
10. Regular risk reporting
11. Key Risk Indicators
12. Risk relationship meetings
Board
Group Risk and
Audit Committees
Subsidiary Boards
Executive Board
Risk Oversight
Group
Other ExCos
Risk culture
Regulatory
assessment
Own
assessment
M
a
n
a
g
e
I
d
e
n
t
i
f
y
M
o
n
i
t
o
r
A
s
s
e
s
s
112
211
310
49
8
67
5
Insights
communicated
to inform further
activity
Our risk appetite
The Board carefully sets its appetite for taking risk against
the Group’s strategic objectives. These choices are set out
in detail in our Group Risk Appetite Statement, which is
reviewed at least annually by the Group Risk Committee,
senior risk owners and the Executive Board before being
approved by the Board. The Group Risk Appetite Statement
also provides clarity over ownership, enabling us to identify
the key individuals within the Group who have responsibility
for managing particular risks. The Group Risk Appetite
Statement informs the risk appetite statements prepared
for and approved by the regulated subsidiary boards within
the Group.
The Group Risk Appetite Statement includes a risk appetite
scale. This scale has several risk acceptance levels, ranging
from no appetite for taking risks at all, through to acceptance
of risk. The level of risk we are willing to accommodate will
vary depending on individual risk scenarios. Risk appetite
can and will change over time, sometimes rapidly as
economic and business environment conditions change,
and therefore the statement is an evolving document.
A comprehensive suite of Key Risk Indicators (KRIs) is
reported regularly, alongside qualitative information,
to enable the Group Risk Committee, on behalf of the
Board, to monitor that the Group remains within its
accepted appetite.
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Own Risk and Solvency Assessment (ORSA)
We are classified as an insurance group and are subject
to Solvency II insurance regulation. A key part of this
regulation requires a consistent approach to risk
management across the Group, supported by the
production of an annual ORSA.
The ORSA process follows an annual cycle, which applies
comprehensive risk assessments to the business’s
activity, and ensures the Group is resilient to stresses
in both the short term and over a five-year period.
The ORSA cycle is depicted in the diagram below.
The Solvency Capital Requirement for insurers allows for
at least a ’1-in-200-year’ risk event over a one-year time
horizon. In addition, severe stresses and scenarios are
used to help provide insight into the ability to maintain
the regulatory capital in such conditions. Our results
show that it would be possible to maintain regulatory
capital across the Group under all stresses for the
business planning horizon. This assists us when
considering the calculations and allocation of risk
capital to all major risks in the Group, and the adequacy
of capital positions. This process also ensures our
continued confidence that the regulated subsidiaries
remain strongly capitalised.
The ORSA uses a five-year projection period for the
medium term. Due to the gestation period across some
of our pension and investment product ranges we do
not earn annual management fees on these in the first
six years.
As a result, a five-year projection period is a prudent view
of the Group’s viability as for pension and investment
business we consider ongoing revenues generated on
existing business only. The ORSA is particularly useful
in assessing viability, as it involves a comprehensive
assessment of risks and capital requirements for the
business. For example, consideration is given to factors
or events that impact on our income from funds under
management such as market movements, retention of
clients and ability to attract new clients. We also consider
factors which impact our costs such as inflation,
non-inflationary expense increases and operational
event-related losses. Combinations of these factors
are used to form scenarios which are tested, providing
for more extreme combinations of events.
The scenarios are used to assess both the immediate
impact of an event and the impact over the longer term
(in the wake of the event). In addition to a standard set
of extreme ‘combination’ scenarios which we test every
year, assessments are also completed based on more
current/topical or emerging risk exposures affecting
the Group or financial services more generally.
The ORSA assists decision-making by bringing together
the following processes:
strategic planning;
risk appetite consideration;
risk identification and management; and
capital planning and management.
The ORSA continues to evolve and further strengthen
risk management processes throughout the Group.
Assess
changes to risk
profile, emerging
risks; agree
scenarios
Agree final ORSA,
update policies
Agree
own needs,
thresholds and
recovery plans
Present
draft ORSA
Assess
sensitivities
and own
solvency needs
Annual
results /
dividends
Mid-year
results /
dividends
Annual
business
plan refresh
Update
risk profile
Update ORSA
related policies
Determine
solvency
capital
requirement /
own solvency
assessment
Confirm
risk appetite
Stress
and scenario
testing
Monitor risk
exposure
and capital
adequacy
ORSA
summary report
Risk and risk management
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Current risk environment
There was a complex and rapidly evolving macroeconomic
risk picture through 2022, which was exacerbated in the UK
by political turmoil. We expect to see significant challenges
at a national level in 2023 and beyond as people and
businesses adjust to a higher interest rate environment
and the higher cost of living. We are mindful of potential
risks relating to changes in tax policy which could affect the
amount our clients have available to save and how much
tax they pay on income and investments. However, we also
recognise an opportunity for our advisers, through ongoing
financial advice, to support clients in managing their
financial affairs in a volatile market; to combat the effects
of inflation on the standard of living they are aiming for in
retirement; and to remain tax-efficient in their savings as
the tax landscape changes. We are also mindful of the
potential for geopolitical tensions to escalate, which could
have relevance to the Group through impacts on financial
markets and through heightened cyber risk.
Overall we remain confident in our ability to withstand
further challenges that may or may not emerge from the
risk environment described in more detail below. Timely
and targeted risk-based information has been provided to
the Board to continue to support decision-making and help
the understanding of key issues.
Macroeconomic
The macroeconomic risks associated with high inflation,
the unwinding of 14 years of low interest rates and the
threat of increasing geopolitical tension are not to be
under-estimated. However, the Group’s business model
has demonstrated resilience and continues to be well
positioned to survive extreme conditions and continue
to invest for long-term growth.
Some examples of the key challenges for the
business presented by the current macroeconomic
conditions include:
Asset prices could fall further as interest rates rise
and the economic outlook deteriorates. Asset price falls
reduce future profitability but, counterintuitively, improve
the Group’s solvency position in the short to medium
term because our capital requirement reduces at a
quicker rate than our own funds. The Group’s financial
resilience is demonstrated through stress and scenario
testing and we remain highly confident in our ability to
weather further extreme market falls, although such
scenarios would negatively impact cash generation.
In a higher inflationary environment our strategic targets
of both limiting growth in controllable expenses to 5%
per annum and investing in the business to support
future growth become more difficult to jointly achieve.
A key strategic consideration for the business is
maintaining capacity for development expenditure
and focusing investment on developments which will
best support long-term growth in net client inflows.
As interest rates rise, annuities could become more
attractive for clients relative to remaining in drawdown.
This could lead to an increase in withdrawals and hence
a reduction in funds under management for the Group.
However, whilst annuities are now relatively cheaper
than they have been for some time, clients may be
reluctant to crystallise funds to purchase an annuity
in a market downturn. Furthermore, keeping funds in a
drawdown pension continues to offer valuable flexibility.
Business loans to advisers will have higher interest
payments. This may come at a time where adviser
income is under pressure due to negative market
impacts on funds under management. However, we
have operated careful lending criteria, which we are
confident will limit the number of advisers who could
require support, and we maintain the capacity to do so.
Our field management team work with advisers to help
them develop their businesses and, if required, SJP is
able to provide targeted financial assistance.
Despite the potential macroeconomic risks we believe
there are good reasons to be optimistic about continued
investment and growth of net flows to the Group.
In particular, our advisers are well placed to advise clients
on the benefits of taking a long-term view and investing
or continuing to invest when markets are relatively low.
Regulatory change
Regulatory change is a constant, and amongst the
significant regulatory change agenda for 2023 the FCA
has launched the new Consumer Duty regulation. This is
intended to set higher and clearer standards of consumer
protection across financial services and require firms to
act to deliver good outcomes for customers. In line with
the whole of the industry we are engaging proactively
with this important regulatory initiative. While we believe
that we already achieve good outcomes for our clients,
we are nonetheless reviewing all our client focused activities
and reflecting on how we can develop them to meet ever
increasing expectations. Ahead of Consumer Duty coming
into force, there will be aspects of the way we operate
which will need to change in order to meet regulatory
expectations. The FCA is expecting action and where we
identify this is required, we will respond to improve client
experience and reduce any risk of poor client outcomes.
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Risk and risk management
Principal risks and uncertainties
Whilst the risk landscape evolved over the course of the year, the inherent
principal risk areas that the business faces remain consistent with the previous
year. An example of this is that security and resilience remains a principal risk
area and within this cyber risk continues to be a key risk. Nevertheless, we
recognise that the cyber environment continues to develop, particularly with
State-sponsored threats, which increases the inherent cyber risk to the business.
The business priority areas which our principal risks impact are set out in
the tables in the following pages, together with the high-level controls and
processes through which we aim to mitigate them. Reputational damage
and impacts to shareholders and other stakeholders are a likely consequence
of any of our principal risks materialising.
The symbols on the right are used to indicate which primary business priorities
our principal risks could impact, while recognising that they could also have a
secondary impact on other business priorities.
Our business priorities
Building community
Being easier to
do business with
Delivering value to advisers
and clients through our
investment proposition
Building and protecting
our brand and reputation
Our culture and being a
leading responsible business
Continued financial strength
Risk description
Business
priority Key risks Example controls/mitigation
Client
proposition
Our product
proposition fails to
meet the needs,
objectives and
expectations of our
clients. This includes
poor relative
investment
performance and
poor product design.
Investments provide poor
returns relative to their
benchmarks and/or
do not deliver expected
client outcomes
Range of solutions does
not align with the product
and service requirements
of our current and potential
future clients
Failure to meet client
expectations of a sustainable
business, not least in respect
of climate change and
responsible investing
Monitoring of asset allocations across
portfolios to consider whether they are
performing as expected in working
towards long-term objectives
Monitoring funds against their objectives
mindful of an appropriate level of
investment risk
Ongoing assessment of value delivered by
funds and portfolios versus their objectives
Where necessary, managers are changed
in the most effective way possible
Continuous development of the range
of services offered to clients
Engagement with fund managers around
principles of responsible investment
Current risk environment continued
Climate change
Tackling climate change is an issue of high importance.
We aim to grow in a sustainable way, taking a long-term
view which ensures we are a force for good for our clients
and the wider world. As an example of how we are putting
this into practice we have pledged that our operations will
become climate positive by 2025 and our investments will
be net zero by 2050. More information on the actions we
are taking can be found on pages 46 to 51.
Climate change-related risks affect companies in different
ways and we have carefully considered how climate
change could impact the Group to identify risks and
opportunities. Climate change is a driver of market-related
risk, be that through physical climate events or impacts
from transitioning away from fossil fuels. The invasion of
Ukraine and rapid reduction in Russian oil and gas supplied
to Europe has driven inflation and put focus on domestic
energy security. We recognise that this presents a risk to
the climate as western countries seek replacement fossil
fuel resources in the short term, but also an opportunity
in relation to accelerating the speed of transition to
renewable energy sources.
Whilst recognising the unique ways in which climate
change can affect individual investments, our approach
to managing this risk is very similar to how we manage
other drivers of market-related risk, namely through our
investment management approach (IMA) and within
that our approach to responsible investing. Through this
we aim to take account of climate risks whilst seeking to
deliver returns for clients in line with their risk appetite and
increasing the value of FUM. Further, to ensure our resilience
as a Group to market movements, our liabilities to clients
are fully matched by our invested assets.
We also consider physical risks on our operations as we
look to enhance our operational resilience. Generally,
through the nature of our operations and the geography in
which we operate, the physical risks to our direct operations
are low. We further work to understand the risk to our
material third parties’ operations and engage with
them to share and remediate material concerns.
A key residual risk to the Group is meeting the views and
expectations of current and potential clients around our
approach to the challenges presented by climate change.
We aim to be as transparent as possible on what we are
doing and have to accept that our approach will be too
little for some and too much for others.
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Risk description
Business
priority Key risks Example controls/mitigation
Conduct
We fail to provide
quality, suitable
advice or service
to clients.
Advisers deliver poor-quality
or unsuitable advice
Failure to evidence the
provision of good-quality
service and advice
Licensing programme which supports the
quality of advice and service from advisers
Technical support helplines for advisers
Timely and clear responses to client
complaints
Robust oversight process of the advice
provided to clients delivered by business
assurance, compliance monitoring, field
risk and advice guidance teams
Financial
We fail to effectively
manage the
business’s finances.
Failure to meet client liabilities
Investment/market risk
Credit risk
Liquidity risk
Insurance risk
Expense risk
Policyholder liabilities are fully matched
Excess assets generally invested in
high-quality, high-liquidity cash and
cash equivalents
Direct lending to the Partnership is secured
Reinsurance of insurance risks
Ongoing monitoring of all risk exposures
and experience analysis
Setting and monitoring budgets
Implementing new systems to enable
future cost reductions
Monitoring and management of
subsidiaries’ solvency to minimise
Group interdependency
Partner
proposition
Our proposition
solution fails to meet
the needs, objectives
and expectations
of our current
and potential
future advisers.
Failure to attract new members
to the Partnership
Failure to retain advisers
Failure to increase adviser
productivity
Available technology falls
short of client and adviser
expectations and fails to
support growth objectives
The Academy does not
adequately support growth
of the Partnership
Focus on providing a market-leading
Partner proposition
Adequately skilled and resourced
population of supporting field managers
Reliable systems and administration
support
Expanding the Academy capacity and
supporting recruits through the Academy
and beyond
Market-leading support to Partners’
businesses
People
We are unable
to attract, retain
and organise the
right people to run
the business.
Failure to attract and retain
personnel with key skills
Poor employee engagement
Failure to create an inclusive
and diverse business
Poor employee wellbeing
Our culture of supporting social
value is eroded
Measures to maintain a stable population
of employees, including competitive total
reward packages
Monitoring of employee engagement
and satisfaction
Employee wellbeing is supported through
various initiatives, benefits and services
Corporate incentives to encourage
social value engagement, including
matching of employee charitable giving
to Charitable Foundation
Whistleblowing hotline
Regulatory
We fail to meet
current, changing
or new regulatory
and legislative
expectations.
Failure to comply with existing
regulations
Failure to comply with changing
regulation or respond to
changes in regulatory
expectations
Inadequate internal controls
Compliance functions provide guidance
and carry out extensive assurance work
Strict controls are maintained in highly
regulated areas
Maintenance of appropriate solvency
capital buffers, and continuous monitoring
of solvency experience
Clear accountabilities and understanding
of responsibilities across the business
Fostering of positive regulatory relationships
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Strategic Report
Risk and risk management
Risk description
Business
priority Key risks Example controls/mitigation
Security and
resilience
We fail to adequately
secure our physical
assets, systems
and/or sensitive
information, or
to deliver critical
business services
to our clients.
Internal or external fraud
Core system failure
Corporate, Partnership,
or third-party, information
security and cyber risks
Disruption in key business
services to our clients
Business continuity planning for SJP
and its key suppliers
Focus on building operational resilience
Mandatory ‘Cyber Essentials Plus’
accreditation for Partner practices or
use of an SJP ‘Device as a Service’ solution
Clear cyber strategy and data protection
roadmap for continuous development
Data leakage detection technology
and incident reporting systems
Identification, communication, and
response planning for the event of
cyber crime
Executive Board level cyber scenario
work to test strategic response
Internal awareness programmes
Identification and assessment of
important and critical business services
Strategy,
competition
and brand
Challenge from
competitors and
impact of
reputational damage.
Increased competitive pressure
from traditional and disruptive
(non-traditional) competitors
Cost and charges pressure
Negative media coverage
Failure to meet our
commitments to net zero
Clear demonstration of value
delivered to clients through advice,
service and products
Investment in improving positive
brand recognition
Ongoing development of client
and Partner propositions
Proactive engagement with external
agencies including media, industry
groups, shareholders and regulators
Clear interim targets to be tracked towards
meeting our long-term net zero targets
Third parties
Third-party
outsourcers’
activities impact our
performance and
risk management.
Operational failures by material
outsourcers
Failure of critical services.
Significant areas include:
– investment administration
– fund management
– custody
– policy administration
– cloud services
Oversight regime in place to identify
prudent steps to reduce risk of operational
failures by material third-party providers
Ongoing monitoring, including
assessment of operational resilience
Due diligence on key suppliers
Oversight of service levels of our
third-party administration provider
Emerging risks
Emerging risks are identified through conversations and
workshops with stakeholders throughout the business,
reviewing academic papers, attending industry events
and other horizon scanning by the Group risk team.
The purpose of monitoring and reporting emerging risks is
to give assurance that we are well positioned to manage
the risks to our future strategy, which is the primary risk
management tool for longer term strategic risks. The Group
Risk Committee reviewed emerging risks on a quarterly basis
during 2022 and more detail is provided on this in the Chair
of the Group Risk Committee’s report on pages 132 to 138.
Examples of emerging risks which have been considered
during the year include:
inflation;
consequences of the invasion of Ukraine;
climate change and ESG-related risks;
employee-related risks;
shareholder activism; and
risk of energy blackouts.
Principal risks and uncertainties continued
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Viability statement
How we assess our viability
The business considers five-year financial forecasts when
developing its strategy. These incorporate our budget for
the next financial year and four further years of forecasts
based on reasonable central assumptions around the
development of business drivers.
At the core of assessing our viability we seek to understand
how different principal risks could materialise. We consider
risks which might present either in isolation or in combination
and which could result in acute shocks to the business or
long-term underperformance against forecasted business
drivers. We consider that a five-year time horizon is
sufficiently long to assess potential impacts and aim
to ensure that the business remains viable, noting that
identified management actions could also be enacted
to restore the business’s prospects.
When considering how the principal risks previously
described might impact the business, we consider our
ability to deal with particular events which may impact
one or more of the following key financial drivers:
reduction in client retention;
reduction in new business relative to forecasts;
market stresses;
increases in expenses; and
direct losses through operational risk events.
We carry out stress and scenario testing on these key
financial drivers, alongside operational risk assessments.
To provide comfort over viability over the next five years,
the scenarios and assessments look at events which
would be extreme, whilst still remaining plausible. This
work demonstrates that, although there would be impacts
on profitability, the Group is resilient and could continue
to meet regulatory capital requirements over five years
should even the more extreme risks materialise.
As well as robust scenario testing, the Directors have
given consideration to assessments of the current risk
environment, including how risks are managed through
controls relative to the risk appetite and emerging risks.
Example scenarios
A diverse selection of stresses and scenarios is applied
to test all material drivers in a variety of ways to provide
understanding of dynamic impacts. Recently we have
considered a number of onerous scenarios for our key
financial drivers based on the 2022 year-end financial
position. This included a scenario which explored how
the 2022 Bank of England Annual Cyclical Scenario test
for banks might impact the key financial variables for
the Group. In order to do this, we carefully considered
how the prescribed economic variables might translate
for the Group. Our conclusion is that whilst this scenario
would significantly reduce profitability it would be not
cause any solvency concerns.
As a further example, as part of the dividend
considerations in February 2022 we assessed the
direct financial implications of a significant increase
in the implied inflation curve, particularly over the next
1-3 years though also remaining significantly above
expectations over the 4-10 year projection. We then
used this inflation stress in two further scenarios of
varying severity which also stressed the value of funds
under management and new business relative to our
base projections. In all scenarios, the Group was
expected to remain adequately capitalised and have
sufficient liquid resources, albeit the Group’s profits,
and therefore future dividends, would diminish. In the
context of the 2022 dividend decision, however, these
scenarios gave confidence that, after payment of the
proposed dividend, the Group would remain within
the Board’s financial risk appetite.
It is also worth noting that when extreme events
materialise, or the level of uncertainty in the
external environment increases, management reacts
accordingly by taking appropriate and measured
actions. For example, following the initial uncertainty
around COVID-19, the Board decided to withhold
around one-third of the proposed 2019 final dividend
until March 2021, when the impacts of COVID-19 had
become clearer and the dividend was released.
This prudent judgement ensured we were comfortable
in our resilience and ability to protect clients while
continuing strategic investment in the business to
increase shareholder value.
We remain confident that the Group is able
to respond to unforeseen events to ensure
the Group remains viable.
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Strategic Report
www.sjp.co.uk
Other InformationFinancial StatementsGovernance
Risk and risk management
Resilience over different time horizons
The table below provides an indication of which risks are relevant over different timeframes and why the Group
is considered to be resilient over these timeframes.
Over the next year
Risks Resilience
Over the short term, key risks are most likely to be operational, such
as cybercrime or failure of operational processes. The cost-of-living
crisis and higher interest rates are also key risks to business
performance if they lead to downturns in markets and/or new
investments, or to continued people-related risks which impact
on our operations.
Strategic risks which could have a shorter term impact relate to:
managing expenses in a high inflationary environment whilst
investing for growth; maintaining high engagement with the
Partnership and supporting them through a tough macroeconomic
environment; the pace of regulatory change; and talent
management.
Of the significant regulatory change due in 2023, including the
new FCA Consumer Duty coming into force, there will be aspects of
the way we operate which need to be evolved in order to continue
to meet changing regulatory expectations and ultimately benefit
our clients.
It is not expected that solvency will be an issue in the short term
due to our matching approach on liabilities. Liquidity risks would
be relevant for this time window since they tend to be short term
in nature. However, we do not anticipate there being liquidity risks
given the approach to Group and subsidiary entity dividends and
liquidity management in general. These risks are also relevant for
the longer time periods.
The Group generates relatively steady cash profits on new business
and existing funds under management which increase each year
as funds in gestation ‘mature’.
In stress and scenario testing the Group demonstrates a high
degree of resilience in its solvency level to falls in markets and
new business. If severe risks materialised over the year, the Group’s
profitability would reduce and, whilst other options would be
explored first, curtailing investment or reducing dividends would
be obvious ways to protect the financial strength of the business.
The business benefits from higher interest rates on cash reserves
and has significant financial resources to support Partner
businesses if required and where appropriate, though the need is
likely to be limited due to the application of careful lending criteria
for business loans to Partners.
Changing regulatory expectations including Consumer Duty
are being considered in depth. We are a client focused business
and so any changes we make should be positive for our business,
reducing regulatory and reputational risk and supporting good
client outcomes.
Operational resilience and business continuity are also important
risks which might cause severe business disruption and are
carefully managed.
There are not considered to be any material uncertainties over
the ability of the Group to survive over the one-year time horizon.
Over the next five years
Risks Resilience
Over the medium term key risks are: investor sentiment; market
impacts; changes to regulation or regulatory expectations
particularly relating to advice; and further tax changes to tackle the
UK’s increased national debt.
The importance of technology in the client proposition is only likely
to grow, and risks may materialise from non-traditional competitors
seeking to disrupt the UK financial advice market.
An example of a strategic risk relates to ensuring we continue to
provide the best proposition for advisers at each stage of their
journey with SJP, to support productivity and retention.
In counteracting the medium-term risks, there is more time to
respond and take actions to manage the Group’s prospects.
As already referenced, stress and scenario testing takes place,
which provides comfort over the Group’s ability to weather
storms over a five-year time horizon and adapt. The Group’s
strategy is designed to navigate the threats and keep our
proposition attractive for both existing and potential clients.
As the largest wealth manager in the UK, the Group is well
resourced to respond effectively to regulatory change and
deal with increased regulatory complexity.
Whilst the importance of technology in the advice space will grow,
we believe that overall our target market will continue to value
human interaction in discussing sensitive financial matters.
Delivery of our technology strategy will however support clients
and advisers in making the most of their interactions and drive
efficiency in the back office.
Ensuring that we have an excellent proposition for Partners is a
core focus for the Group, and careful consideration is given to how
we should evolve our proposition over time to ensure we develop
and retain excellent advisers in the Partnership.
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Beyond 2027
Risks Resilience
Most of the shorter term risks will remain relevant; however,
over the longer term, the impact of artificial intelligence and
machine learning in both investment management and advice
will become greater.
Risks from climate change relating to investor sentiment and
political change are already relevant now, but the consequences
of failure to act will be felt more and more over time. We are
committed to be climate positive in our operations by 2025,
net zero in our supply chain by 2035 and net zero in our investments
by 2050. If we fail to deliver on these commitments, then this could
have a significant reputational impact within this time horizon.
We are exploring opportunities in relation to machine learning
and other technology solutions as part of our technology strategy.
This is being done cautiously to manage potential risks, but failure
to build capabilities in this space may present a greater
competitive risk.
We have been developing our responsible investing proposition
for some years and welcome the focus in this area, as it is the right
thing to do and provides an opportunity to maximise client benefit
through our active investment management approach.
We are increasing the governance and measurement of delivery
against our responsible business commitments to ensure
confidence of delivery.
Finally, when we look five or six years ahead all current funds
in ‘gestation’ will be expected to be contributing to profits
and therefore increasing our expected financial resilience.
Conclusion
In accordance with the UK Corporate Governance Code (Provision 31), the Directors have assessed the Group’s current
financial position and prospects over the next five-year period and have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due. The Directors believe that the Group’s risk
planning, management processes and culture allow for a robust and effective risk management environment.
As part of the Annual Report by the
Directors it is a statutory requirement
to produce a Strategic Report.
The purpose of the report is:
to inform members of the Company and help them
assess how the Directors have performed their duty
under section 172(1) of the Companies Act 2006
(duty to promote the success of the Company).
The objective of the report is to provide shareholders with
an analysis of the Company’s past performance, to impart
insight into its business model, strategies, objectives and
principal risks and to provide context for the Financial
Statements in the Annual Report.
The Directors consider that the report, comprising pages
2 to 99 of this document, meets the statutory purpose
and objectives of the Strategic Report.
On behalf of the Board:
Andrew Croft, Chief Executive
Craig Gentle, Chief Financial Officer
27 February 2023
Approval of the Strategic Report
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Governance Financial Statements Other Information
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Strategic Report
Governance
Board of Directors 102
Corporate governance report
(including section 172(1) statement) 104
Report of the Group Audit Committee 122
Report of the Group Risk Committee 132
Report of the Group Nomination
and Governance Committee 139
Report of the Group
Remuneration Committee 143
Directors’ report 175
Statement of Directors’
responsibilities 178
100
Corporate governance
If we are to live up to our commitment
to be a leading responsible business,
we must be able to demonstrate that
we operate the highest standards of
corporate governance, balancing the
interests of all our stakeholders in our
decision-making.
Robust and proportionate governance will not only provide
the Board and its stakeholders with reassurance but is also
critical to the successful delivery of a strategy that takes
account of our wider societal purpose and the interests
of all of our stakeholders.
Our aim within this report has been to consolidate our
reporting on governance, providing context that explains
how the Company’s governance arrangements, and the
Board’s activities, have contributed to the delivery of our
strategy. As a result, you will find reporting that may be
found elsewhere in other companies’ reports, including
the section 172(1) statement.
We have structured our corporate governance report
(see the navigation bars at the top of the pages) so that
it aligns with the sections of the UK Corporate Governance
Code, as these provide a useful basis for readers’ navigation.
Links between elements of this report and more detailed
examples in the Strategic Report that seek to outline
our approaches to themes within the Code are
highlighted throughout.
Paul Manduca, Chair
The UK Corporate Governance Code
The corporate governance report on pages 104
to 121 explains how the Board leads the Company’s
approach to corporate governance, including an
explanation of how the principles of the Financial
Reporting Council’s UK Corporate Governance
Code (the Code) have been applied in practice.
As stated in last year’s Report, pension contribution
rates for Executive Directors will align with the wider
workforce from 1 January 2023. As this alignment did
not take effect until this date, the Company did not
meet the requirements of Provision 38 of the Code
during 2022. The Board considers that the Company
has complied with all of the other principles and
provisions of the Code (available at: www.frc.org.uk)
during 2022. Detailed reporting on remuneration, as
required by the Code, can be found in the Directors’
Remuneration Report.
1
Board leadership and Company
purpose (section 172(1) statement)
See pages 104 to 111
2
Role of the Board and its responsibilities
See pages 112 and 113
3
Board composition, succession
and evaluation
See pages 114 to 121 and also the Report
of the Group Nomination and Governance
Committee on pages 139 to 142
4
Audit, risk and internal control
See the Report of the Group Audit Committee
and Report of the Group Risk Committee on
pages 122 to 138
5
Remuneration
See the Report of the Group Remuneration
Committee on pages 143 to 174
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Governance
1
2
3
4
5
Board leadership and company purpose
Board of Directors
Andrew Croft
Chief Executive
Date of appointment
Chief Executive January 2018.
Joined St. James’s Place 1993 and appointed to
the Board September 2004.
Experience
Andrew joined the Company in 1993 and was
Chief Financial Officer from 2004 to 2017. Having
trained as an accountant with Deloitte Haskins
and Sells (now part of PricewaterhouseCoopers
LLP) he then worked in the financial services
sector. Since joining St. James’s Place he has
held a number of roles within the finance
department, assuming the role of Finance
Director in 2002 and being appointed as
the Chief Executive Officer in January 2018.
He is a Trustee of the St. James’s Place
Charitable Foundation.
Craig Gentle
Chief Financial Officer
Date of appointment
Chief Financial Officer January 2018.
Joined St. James’s Place 2016 and appointed
to the Board January 2018.
Experience
Craig joined the Company in 2016 as the
Chief Risk Officer. Prior to this, Craig spent
22 years at PricewaterhouseCoopers LLP,
12 of which were as a Partner. During his time
at PricewaterhouseCoopers LLP, Craig held
a number of roles, including as a senior
audit partner. Craig qualified as a Chartered
Accountant in 1993.
External appointments
Member of the Board, Trustee and Honorary
Treasurer for the Bristol Music Trust.
Dominic Burke
AC
RK
Independent Non-executive Director
Date of appointment
Non-executive Director November 2022.
Experience
Dominic has significant experience in the
financial sector and has spent his career in
the insurance industry. In 2000, Dominic joined
the Jardine Lloyd Thompson Group plc following
the acquisition of the Burke Ford Group of
companies that he had co-founded, and
from 2005 he took on the role of group chief
executive until the company’s 2019 sale to
Marsh & McLennan Companies, Inc. Dominic
held the position of vice chair of Marsh &
McLennan until January 2022.
External appointments
Non-executive chairman of Newbury
Racecourse plc. Honorary treasurer
of The Injured Jockey Fund.
Rosemary Hilary
AC
RK
NM
RM
Independent Non-executive Director
Date of appointment
Non-executive Director October 2019.
Experience
Rosemary was Chief Internal Auditor at TSB
Bank from 2013 to 2016 and previously held
senior positions at the Financial Services
Authority and the Bank of England. Rosemary
is a Chartered Certified Accountant, FCCA.
Rosemary was formerly a non-executive
director and chair of the Audit and Risk
Committee of Record plc and of the Pension
Protection Fund, and a Trustee of Shelter.
External appointments
Rosemary is a non-executive director and
chair of the Audit Committee of Willis Ltd; and
a non-executive director and chair of the Risk
Committee of Vitality Life and Vitality Health.
In 2021 she became a Trustee of the Prince’s
Foundation and chair of its Audit and Risk
Committee. She joined the board of the
Scottish Building Society in 2022.
Emma Griffin
RK
RM
Independent Non-executive Director
Date of appointment
Non-executive Director February 2020.
Experience
Emma has previously been a non-executive
director of AIMIA Inc and Enterra Holdings.
From 2002-2013, Emma was a founding partner
of the stockbroking firm Oriel Securities, which
was sold to Stifel Corporation. In her early
career Emma worked at HSBC James Capel
and Schroders.
External appointments
Emma is currently a non-executive director
of EDF Man Holdings Ltd and SDCL Energy
Efficiency Income Trust plc. She is also a
non-executive director and chair of the
Investment Committee of Industrial Alliance
Financial Group, one of Canada’s largest
insurance and wealth management
companies, listed on the TSX. She is also
a non-executive director of the private
investment companies Claridge Inc.
and Solotech Inc.
Paul Manduca
NC
Chair of the Board
Date of appointment
Chair May 2021. Non-executive Director
January 2021.
Experience
Paul joined from Prudential plc, where he
was chairman for eight and a half years.
Other previous appointments include the
chairmanships of Aon UK Limited and JPM
European Smaller Companies Investment Trust
Plc. Paul was the senior independent director
of WM Morrison Supermarkets Plc, a non-
executive director of KazMunaiGas Exploration
& Production and chairman of Henderson
Diversified Income Limited. Prior to this, he
served as founding CEO of Threadneedle Asset
Management Limited, global CEO of Rothschild
Asset Management, director of Eagle Star and
Allied Dunbar, CEO, Europe of Deutsche Asset
Management, chairman of Bridgewell Group
plc and was a director of Henderson Smaller
Companies Investment Trust plc.
External appointments
Chairmanships of Templeton Emerging Markets
Investment Trust plc, Majid Al Futtaim Trust and
W.A.G Payment Solutions Plc.
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Governance
Simon Jeffreys
AC
RK
NC
RM
Independent Non-executive Director
Date of appointment
Non-executive Director January 2014.
Experience
Simon brings experience of the auditing world
and financial services. He chaired AON UK
Limited and Henderson International Income
Trust plc until 2023, and was senior audit
partner with PricewaterhouseCoopers LLP from
1986 to 2006 where he also led their Global
Investment Management practice. Between
2006 and 2014, Simon was CFO and chief
administrative officer at Fidelity International
and then CFO and chief operating officer at
the Wellcome Trust.
External appointments
Non-executive director and chair of the Audit
and Risk Committees of Templeton Emerging
Markets Investment Trust plc, SimCorp A/S, a
listed Danish financial services software
company, and the Crown Prosecution Service.
Roger Yates
AC
RK
NC
RM
Senior Independent Non-executive
Director (SID)
Date of appointment
Senior Independent Non-executive Director
October 2018.
Non-executive Director January 2014.
Experience
Roger brings over 30 years of investment
management experience. He started his career
with GT Management Limited in 1981 and has
subsequently held positions at Morgan Grenfell,
Invesco and Henderson Group plc, where
he was chief executive officer. Most recently,
he was chair of Electra Private Equity plc and
a non-executive director of IG Holdings plc
and of J.P. Morgan Elect plc.
External appointments
Senior independent non-executive director
of Mitie Group plc, non-executive director and
chair of the Remuneration Committee of Jupiter
Fund Management plc and chair of The Biotech
Growth Trust plc.
John Hitchins
AC
RK
Independent Non-executive Director
Date of appointment
Non-executive Director November 2021.
Experience
John has extensive experience of the financial
services industry gained through his career as
a senior audit partner and his non-executive
directorships. John spent 38 years with
PricewaterhouseCoopers, specialising in
financial services auditing and advisory
services, before retiring in 2014. Since retiring
from PricewaterhouseCoopers he has
undertaken a number of non-executive
director roles with financial services
companies alongside a role as a senior
adviser to the Financial Reporting Council.
External appointments
Non-executive director and chair of the audit
committee of Aldermore Group PLC and Senior
Adviser to the Financial Reporting Council.
Lesley-Ann Nash
RK
RM
Independent Non-executive Director
Date of appointment
Non-executive Director June 2020.
Experience
Lesley-Ann has stepped down from her
position as a director in the Cabinet Office
of HM Government, where she spent six years
leading a range of large-scale commercial
and consumer programmes.
Lesley-Ann was a managing director at Morgan
Stanley from 1998-2009, having previously
worked at UBS and Midland Bank. She is a Fellow
of the Chartered Institute of Management
Accountants (CIMA). She was a Trustee of
the North London Hospice for nine years.
External appointments
Lesley-Ann is a non-executive director of
Workspace Group plc, BusinessLDN and
Homes England.
Committee key
AC
Member of Group Audit Committee
RK
Member of Group Risk Committee
NC
Member of Group Nomination
and Governance Committee
RM
Member of Group
Remuneration Committee
Denotes Chair of Committee
Full biographical details of each Director
can be found on our corporate website at
www.sjp.co.uk
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Governance
1
2
3
4
5
Board leadership and company purpose
Section 172(1) statement
Section 172 of the Companies Act 2006
requires a director to act in the way he
or she considers, in good faith, would
most likely promote the success of
their company for the benefit of its
members as a whole. In doing this
section 172 requires a director to have
regard, amongst other matters, to the
following factors:
A
Likely consequences of any
decisions in the long term;
B
Interests of the company’s
employees;
C
Need to foster the company’s
business relationships with
suppliers, customers and others;
D
Impact of the company’s
operations on the community
and environment;
E
Desirability of the company
maintaining a reputation for high
standards of business conduct;
and
F
Need to act fairly as between
members of the company.
In discharging our section 172 duty
we have regard to the factors set out
above and also other factors which
we consider relevant to the decisions
being made. We are also clear that
decisions may impact stakeholders
in different ways and so the Directors
aim to weigh up the impacts and
make balanced decisions. We have
set out below practical examples,
including the effect on decisions taken
during 2022. Whilst each of the factors
presents important considerations,
they may not always align and we
acknowledge that not every decision
we make will necessarily result
in a positive outcome for all of
our stakeholders.
Purpose and leadership
A focus on long-term success
Section 172 factor:
A
Our purpose and values (see page 8)
emphasise the long-term focus of
the business. The Board’s focus is on
ensuring that the Company generates
and preserves value over the long
term for all of its stakeholders. The
core of our strategy is the long-term
relationship St. James’s Place and the
Partnership have with our clients, and
this is what ultimately drives long-
term value (financial and non-
financial) for shareholders and other
stakeholders. The Company’s purpose
and values influence decision-making
across the business, and processes
support the Board’s aim to make sure
that decisions are consistent with
strategic objectives and the long-
term success of the Company. Our
culture continues to be vital to the
continued success of the Group and
the Board recognises it has an
essential role in setting an appropriate
tone from the top, monitoring the
business and seeking to both protect
it and add value.
Our governance framework, explained
in more detail on pages 112 and 118,
is designed to ensure that the Board,
led by the Chair, is able to monitor the
sustainability of the business model,
performance against strategy and
opportunities and threats as they
arise. When reviewing performance
against strategy, the Board looks to
ensure it continues to align with the
Group’s culture and its commitment
to being a leading responsible
business, and delivers long-term
success to St. James’s Place and
its stakeholders, by focusing on:
providing entrepreneurial
leadership and direction to the
Group in setting out its strategic
aims, vision and values and
overseeing delivery against
these, including approving
major transactions and initiatives;
monitoring financial performance
and reporting, and approving/
recommending payments of
dividends;
setting the Company’s risk
appetite, assessing the principal
and emerging risks facing the
Company and ensuring that
adequate controls are in place
to manage risk effectively;
ensuring that appropriate and
effective succession planning
arrangements and remuneration
policies are in place;
implementing and ensuring the
effective operation of corporate
governance procedures; and
ensuring that good client
outcomes are delivered through
the combination of the Group’s
distinctive investment management
approach and the provision of
high-quality ongoing advice.
The strategy, and performance
against the strategy, are discussed
throughout the Chair’s report, Chief
Executive’s report and Strategic
Report, and a summary of significant
topics considered by the Board during
2022 is set out on pages 108 to 111
below, together with details of how the
Directors had regard for factors A to F
in their considerations.
Reputation and standards
of business conduct
Section 172 factor:
E
Our business exists to support
clients to plan, grow and protect their
financial futures. Our ability to achieve
this would be materially impacted
if we were unable to demonstrate
standards of business conduct
that meet clients’ and society’s
(and regulators’) expectations. Failure
to maintain appropriate standards of
conduct could inevitably lead to poor
client outcomes, regulatory sanctions
and/or adverse media coverage that
could damage St. James’s Place’s
reputation and the value placed on
104
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Governance
Inclusion and diversity case study
The Board is clear that inclusivity is key to SJP’s future
success and growth and that inclusive environments
will provide foundations for diverse thought that will
in turn encourage innovation and creativity.
A diverse community of people from a wide variety of backgrounds, and
with a range of experiences, skills and approaches, will help us better
understand and meet the needs of clients. We embrace inclusion and
diversity, not just because it’s the right thing to do, but because it makes
our company stronger.
During 2022 the Board approved updated versions of the Board Diversity
Policy and the Group Inclusion and Diversity Policy. Both policies aim to
consider diversity in the widest sense rather than focusing only on specific
aspects. A primary purpose of the Inclusion and Diversity Policy is the
embedding of inclusive working practices across the business, in line with
a framework of core principles:
Representative – Showcasing the diversity of our business and industry,
disrupting stereotypes and enhancing our talent pipeline
Accessible – Enabling and empowering everyone to engage;
eliminating barriers through adjustments
Inclusive – Creating an environment where everyone feels they belong,
and their input is valued
Avoiding bias and group-think – Actively seeking out and engaging
a range of voices and perspectives, taking steps to recognise and
mitigate bias and blind spots from the start.
In 2020 SJP set public commitments to achieve 33% female representation
on the Board, 30% in senior roles and 10% ethnic minority representation
across all UK roles by September 2023. While progress in recent years has
presented some challenges, including the weakness in the wider industry
pipeline, we have seen some of the actions taken by management
bearing fruit. Changes to policy and practice within the business – for
example, improved recruitment initiatives, increased mentoring and
networking opportunities and flexible working policies – have gained
traction. We are now on track to meet our female representation
commitments, and during 2022 there was an increase in minority
ethnic hires (see page 60 for further information). However, the Board
acknowledges that further work is needed in this area.
As outlined on page 142, during 2022 the FTSE Women Leaders targets were
updated. The FCA also introduced updated Listing requirements requiring
a ‘comply or explain’ statement in relation to the following revised diversity
targets: at least 40% of the Board being women; at least one senior board
position being held by a woman; and at least one member of the board
being from a minority ethnic background. The new disclosure requirement
will be mandatory from 2023 and the Group Nomination and Governance
Committee is already taking this into account in its succession planning.
Overall, the Board is pleased with progress and sees evidence that
inclusion and diversity is embedded in SJP’s culture, forming a part of
everyday language. Inclusion and diversity will remain at the forefront
of the Board’s thinking in 2023 as we continue to strive for a diverse and
inclusive culture that enables SJP to attract, retain and develop talented
people from all walks of life.
it by all of our stakeholders. Conduct
and reputation are prominent in our
list of principal risks (see pages 94 to
96) and we seek to minimise the risk of
harm to clients due to conduct issues
through a robust control environment.
The Board looks to its Risk Committee
to monitor conduct risks and provide
an appropriate level of assurance to
support the Board’s decision-making.
Our reputation is best protected and
improved by ensuring good client
outcomes and avoiding conduct
issues. Our reputation is also shaped
by the image we project. With this in
mind, the Board continues to monitor
the brand and public relations activities
to ensure they align with our purpose
and long-term aims, and accurately
depict our culture (see further
information on page 8).
Our stakeholders
Section 172 factors:
B
C
D
F
The Group’s principal stakeholders are
covered in more detail on pages 9 to
14 in the Strategic Report. Whilst each
stakeholder has different drivers and
expectations, success for each is not
mutually exclusive, as illustrated by
the alignment between the interests
of the Partnership, clients and
employees when it comes to
delivering successful client outcomes.
We explain on pages 25 to 33 how
successfully implementing our
strategy will ensure the Company
will continue to act in accordance
with its purpose and values and
achieve its vision. Successful
implementation will also deliver
against the expectations of all our
stakeholders and we provide more
detail on how we engage with each
overleaf, together with an indication
of where more detail can be found
throughout this Annual Report.
Not all engagement is directly
between stakeholders and the Board.
Where engagement is not with the
Board, the output informs business-
level decisions made by management,
an overview of which is fed back to the
Board through regular reporting and
focus on strategic topics.
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Governance
Advisers
Communication and engagement with our advisers is
delivered through a range of different approaches, from
ongoing relationship management and development events
to specific consultations. We utilise digital communication
platforms but place great importance on face-to-face
engagement through corporate-led or locally arranged
events, including individual meetings, regional and national
conferences and our Annual Company Meeting. During 2022
we expanded the calendar of events for our communities
where they can network, share best practice and/or develop
their skills and knowledge. Given the scale of our adviser
base, we recognise that a blended approach to consultation
will provide us with a greater depth of engagement and
insight. In 2022 our consultations with advisers included
deep dive interviews in relation to key projects, workshops
with advisers and their support staff, and the introduction
of a platform enabling us to understand the views of our
advisers at scale. We have also continued to carry out
surveys across our entire adviser population, which
enable us to measure sentiment over time.
Further information on advisers in this Annual Report
can be found on pages 6, 10, 18, 20-21, 24, 28, 95, 108-110,
117, 119, 129, 136, 151, 163 and throughout the our
responsible business section on pages 34-65.
Employees
Effective and timely engagement with employees
has always been an integral part of St. James’s Place’s
culture. In 2019 we established our first formal workforce
engagement committee to support the Board’s
engagement with our employees. During 2021 we reviewed
the effectiveness of the Board’s chosen mechanism for
workforce engagement. Our review concluded that there
were opportunities to enhance the two-way engagement,
and so in 2021 we established, in place of the previous
workforce engagement committee, a panel of employee-
nominated representatives to assist our designated Non-
executive Director responsible for workforce engagement.
The role of this panel was embedded further during 2022
and the panel met quarterly to cover issues such as
remuneration, communication, inclusion and diversity
and hybrid working; they gave input to pulse survey themes
and made recommendations to address some of the main
employee survey findings. The Panel is engaged in ensuring
an effective two-way dialogue with the Board. Part of the
responsible Non-executive Director’s role is to report back
to the Panel on the Board’s discussions, which Lesley-Ann
does at each meeting. Panel members are charged with
relaying and discussing the key areas of activity and focus
with the workforce in their own areas. The engagement
overseen by the Panel also provides management with
valuable insight to support key decisions it makes.
Further information on employees in this Annual Report
can be found on pages 7, 12, 18, 28, 95, 108-110, 117, 121,
129, 136, 151, 163, 177, and throughout the our responsible
business section on pages 34-65.
Clients
Engagement with clients is largely driven through their
ongoing relationship with their adviser, and this provides
the primary means of sharing information with
St. James’s Place’s clients. Regular client meetings provide
an opportunity for clients to share their views and to ask
any questions they may have. To enable us to get closer
to clients’ views and understand their experiences and
expectations we have established a client community.
This client community enables us to seek client input to
inform developments, explore their views on key topics,
and test their understanding of key client-facing material
or regulatory letters. Our understanding of clients’ interests
is further enhanced by regular client surveys and targeted
market research. Whilst no organisation likes to receive
complaints, the Board and the Group Risk Committee
regularly consider complaints reporting, which provides a
further client lens. Going forward the Board will be required
to approve annually an assessment of whether SJP is
delivering good outcomes for clients consistent with the
FCA’s new Consumer Duty. Our engagement with clients
will provide valuable insight and evidence to support
these assessments.
Further information on clients in this Annual Report can
be found on pages 4, 11, 16, 18, 20-21, 24, 30, 94, 108-110,
117, 121, 129, 135, 151, 163 and throughout the our
responsible business section on pages 34-65.
Society
St. James’s Place has advisers, clients, shareholders
and employees, but we also care deeply about the role we
play in wider society. ‘Society’ can be defined broadly and
includes; government, regulators, suppliers, research and
academic bodies, the third sector and consumer groups,
as well as the wider communities in which we operate.
Cultivating strong and mutually beneficial relationships with
these groups has ensured our values and aims are aligned
and we seek to build and maintain long-term relationships
with all groups, based on mutual trust. We are currently
stepping up our efforts to engage with a range of
stakeholders and to ensure we have a voice on the issues
in society where we can most constructively contribute,
such as exploring the themes around the value of advice
to society. Amongst other things, this involves working with
academic and research institutions, being as helpful as we
can in supporting governments and regulators to achieve
their policy goals, and engaging meaningfully with our
suppliers and local communities. Our activities range from
proactive meetings, supporting policy initiatives, sharing
our technical expertise to help solve societal problems,
responding to consultations, and ultimately learning from
and teaching the many stakeholders we engage with.
Further information on society in this Annual Report can
be found on pages 7, 13, 19, 20-21, 24, 32, 96, 108-110, 117,
129, 138, 152, 163, 183 and throughout the our responsible
business section on pages 34-65.
1
2
3
4
5
Board leadership and company purpose
Section 172(1) statement continued
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St. James’s Place plc Annual Report and Accounts 2022
Shareholders
We continue to maintain close relationships with institutional shareholders through direct dialogue and frequent meetings,
and we also meet regularly with the Group’s brokers who in turn facilitate meetings with investors and their representatives.
Regular dialogue is an important way of staying informed of the views of investors, and periodic meetings with them
provide an insight into the considerations that drive their views of us an organisation. Examples of how we engage are
set out below.
How we engage
with shareholders Opportunity for engagement
Institutional
shareholder
roadshows and
conferences
2022 saw a return to a fuller programme of in-person shareholder roadshows and investor
conferences, supplemented by virtual engagement. We conducted roadshows in the UK and
overseas, meeting shareholders in the United States, Australia and various European destinations.
Some roadshows were arranged to specifically give investors the opportunity to discuss our full-year
and half-year results, whereas others were scheduled away from key reporting periods, leading to
discussion of a broader range of strategic and operational topics.
We attended conferences organised by a number of brokers, again both in the UK and overseas,
providing shareholders with further opportunity to engage with senior management via one-to-one
and group meetings. We also had a number of ad-hoc engagement events with shareholders.
Together, these engagements provided the Directors with opportunities to gain insight into
institutional shareholder views and expectations, and to address specific queries.
Investor
studies
Whilst we did not commission any further studies in 2022, the findings of the investor study
commissioned in 2018 and the insight from the studies carried out in relation to our brand review
in 2021 have provided valuable insight from existing and potential investors. We will continue to use
investor studies to deliver data that provides the Board with an opportunity to assess in more detail
its investor base, investor behaviour, drivers of share price performance and investors’ perception
of a number of key aspects of our business model.
Individual
shareholder
meetings
The Group’s largest institutional investors continue to meet regularly with the Executive Directors and
the Chair, providing an opportunity for them to raise specific queries. The Chair, Senior Independent
Director and other Non-executive Directors are available for consultation with shareholders on
request, and contact major shareholders at least annually to offer opportunities to meet. During
2022, the Chair and the Chair of the Group Remuneration Committee have met with a number of
shareholders as part of regular engagement activity and in response to requests from investors
to discuss specific matters of interest to them.
Direct
correspondence
with major
shareholders
As suggested in the Code, the Chair, Senior Independent Director and Committee chairs seek
engagement with major shareholders on significant matters as they arise. The Chair of the Group
Remuneration Committee wrote to shareholders during the year to explain proposed changes to
the Remuneration Policy for Executive Directors, and subsequently met and/or corresponded with a
number of shareholders who provided feedback (further information can be found in the Directors’
Remuneration Report on page 144).
Annual
General
Meeting
Subject to the circumstances prevailing at the date of the meeting, all Directors will be available to
meet with shareholders after the Company’s Annual General Meeting, which will be held on 18 May
2023 and of which further details are set out in the Notice of Annual General Meeting.
Further information on shareholders in this Annual Report can be found on pages 14, 108-110 and 144.
107
Governance
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Other InformationFinancial StatementsStrategic Report
What the Board did in the year
Each year we provide an overview of the key areas of the Board’s focus. This is incorporated within our section 172(1)
statement which enables us to explain better how each topic aligns with our strategy and how the Board considered
stakeholder interests in its decision-making. The Board’s activities are not limited to the formal Board meetings at which
decisions are made. The Board’s decision-making is supported by a much wider range of engagements with the business
which include training, development and focus sessions, further details of which can be found under the Planning and
preparing and Directors’ development sections later in the corporate governance report. Although not an exhaustive
list of the Board’s activity in 2022, we have included below examples of significant topics that were considered.
Board topic
Stakeholder
interests Engagement Outcomes/influence
Operational excellence – 2022 represented the
second year of our five-year plan to invest in
operational excellence. Operational excellence is
about leveraging technology to make it easier to
do business, whether that be for clients, advisers,
employees or third parties, and our 2025 journey
will ensure we are beyond ‘levelled up’ in terms of
technology and are able to offer a leading digital
platform. The 2025 technology roadmap will
provide a ‘next generation’ client, adviser and
employee experience, and during the year the
Board was presented with an enhanced
technology dashboard which allows members
to track progress with projects more closely as
well as business-as-usual technology operations.
One such project is the new SJP app which
launched in 2022. It aims to provide an on-
demand portal for clients, supporting our
advisers to manage and service them. Further
developments have included the recruitment of a
Chief Data Officer who is accountable for data
leadership and the establishment of a business
improvement and automation programme which
aims to enhance working practices to achieve
greater efficiency, assurance and added value
for stakeholders.
Shareholders,
advisers,
employees
and clients
The focus of investment
(both in terms of finance and
resource) has been informed
by engagement with and
feedback received from
our advisers, clients and
employees – both through
informal interactions and via
surveys and research. Pilots
have also been important
exercises across all elements
of the operational excellence
programme and have helped
guide the development of new
functionality and systems and
the design of user interfaces,
including the new SJP app.
The Board has been appraised
of the insight gained from our
engagement with advisers,
employees and clients and
this enabled it to encourage
management to focus on
how it prioritises both the
areas chosen and the pace of
investment. Feedback received
throughout the year has helped
us to learn how we can improve
our communication during this
and other significant
programmes of work in the
future, as well as how to ensure
we proactively manage roll-out
to stakeholders in ways that
minimise disruption and
maximise engagement.
Administration – The migration of our back-
office administration systems to Bluedoor was
a critical part of setting SJP up for the future.
Since migration of the core UK business has been
completed, functionality that the system can
provide has begun to be utilised. This includes
functionality to support advisers such as straight-
through processing and self-service mechanisms,
as well as refining manual processes and using
automation to drive efficiencies. We have also
introduced enhanced case tracking for advisers
and are launching an advice assistance AI driver
to augment the advice process, to make tasks
quicker for advisers and provide assurance
over quality of advice by design. This has been
piloted with advisers, having been developed
in partnership between SJP and SS&C, together
with Intellect and Salesforce. During 2022,
the planned migrations of the core platforms
for our international and Rowan Dartington
businesses to SS&C also progressed.
Shareholders,
advisers,
employees
and clients
Our back-office administration
has a direct impact on our
advisers and clients and the
Board receives both direct
and indirect feedback on
challenges that can arise. As
much of the administration is
carried out by our strategic
partner SS&C it is important to
work closely with them, and
during the year the Board met
with representatives of SS&C,
gaining greater insight not only
into SS&C as an organisation
but also cultural alignment and
the practicalities of working
with SJP.
Feedback from advisers, in
particular, emphasised to the
Board the significant impact
the administration has on their
day-to-day work. The Board
is clear that administration
should remain a key area of
focus and continues to monitor
both service levels and the
delivery of enhancements.
Our engagement with SS&C
provided the Board with
assurance that both
management and SS&C
were committed to delivering
the best outcomes for clients
and advisers both now and
into the future, focusing in
particular on reducing the
number of cases that are not
processed correctly first time.
It also helped provide the Board
comfort that the teams of
employees working within SS&C
were culturally aligned with SJP.
1
2
3
4
5
Board leadership and company purpose
Section 172(1) statement continued
108
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Governance
Board topic
Stakeholder
interests Engagement Outcomes/influence
Investment proposition and performance –
During the year the Board continued to monitor
the investment management strategy, which
focuses on improving investment performance,
creating capacity and responsible investment.
The Value Assessment Statement (VAS), now in
its third year, remains a helpful tool for the Board
to keep an eye on progress. The appointment
of Tom Beal as Director of Investments during
the latter half of the year was a key point
for the Board to ensure the strategy remained
appropriate. For our investment management
approach (IMA) to deliver the right outcomes for
clients we believe it is important to be clear on
the value it creates for them. To support Partners
and clients, we believe it is essential for us to
simplify our investment offering and provide
a compelling single SJP investment proposition
that delivers the flexibility to support clients’
needs as their plans or circumstances change.
Shareholders,
advisers,
employees,
clients and
society
Our clients, advisers and fund
managers provide us with
regular feedback in a range
of ways that help guide our
focus on meeting client needs.
The VAS also provides an
important reference point for
our stakeholders, including our
regulators, and helps to clarify
client and adviser expectations.
It also helps shape our
reporting to enable clients
and advisers to monitor
and evaluate the performance
of our funds.
Whilst the expectations of
our clients and advisers helped
to shape the planned future
evolution of the IMA, the
feedback we receive from
stakeholders also delivers
insight into shifts in client
expectations and requirements,
and provides a key indication
that the changes we are
making are having the desired
impact. Engagement with our
regulators has also helped
inform our consideration of
where further development
is required in our reporting
to clients.
Responsible business (including net zero) –
As disclosed in last year’s report, we
acknowledge that what is perceived as being
a responsible business is constantly evolving,
and 12 months on from agreeing our Responsible
Business Framework, the external environment
has changed dramatically. What it means to
be a responsible business will differ between
organisations but for SJP it means being
committed to helping our clients and
communities to create the futures they want.
In recent years we have openly recognised that
the most significant influence we can have is
via the management of the funds we oversee
for our clients. Our ambition to be a leading UK
responsible business is a long-term aspiration,
one which requires us to develop a deep
understanding of our material topics, establish
initial goals, develop these and track our
progress. This year we have concentrated on
developing our goals, which represent good
practice and align to each of the four strategic
priorities. More information can be found in
the our responsible business section.
Shareholders,
advisers,
employees,
clients and
society
Year on year we have seen
increased interest from all
stakeholders in what many
term environmental, social
and governance (ESG) issues.
Our Responsible Business
Framework is the culmination
of over 100 engagements
with internal and external
stakeholders and a Responsible
Business Advisory Group was
established in 2022 with the
aim of driving progress. Our
regulators and shareholders
continue to provide valuable
guidance on their expectations
via direct engagement and
the publication of their
own statements.
There has been a clear shift
in recent years in expectations
for businesses and society to
demonstrate that they are
committed to addressing
today’s biggest systemic
issues, including climate
change and social inequality.
We disclosed last year that the
Board agreed a responsible
business strategy, and in
2022 the Board endorsed the
underlying goals and narrative.
These goals have been shaped
by the expectations of our
stakeholders and we expect
them to continue to evolve over
time with ongoing engagement
informing our decisions. Further
details on our commitments
can be found on page 35 of
the our responsible
business section.
Advisers – The face-to-face financial advice that
is provided to SJP’s clients is delivered exclusively
by our advisers, with whom we enjoy a symbiotic
relationship. Supporting our advisers is the
key function of our business but as it has grown
in size and matured over time, the needs of
advisers have also developed. Partner businesses
vary significantly in terms of scale, experience,
focus and motivations and it is critical that
SJP continues to evolve its approach to ensure
that every Partner business receives the support
necessary for it to continue to deliver best-in-
class service to clients.
Shareholders,
advisers,
employees
and clients
The challenges we, like many
businesses, have faced in the
last couple of years have
spotlighted areas that require
the focus of the Board and
management. Although not all
challenges have been driven
by the impact of the pandemic,
the impact that it had on our
‘high-touch’ relationship with
our advisers helped to highlight
the need to develop an agile
and flexible approach to
support them and take
account of their varied needs
and requirements. Via surveys
and direct engagement our
advisers have delivered insight
that has informed changes
to our support model.
The feedback and insight
provided by advisers and
employees assisted
management in refining and,
where necessary, revising the
support model with a view to
delivering the quality of service
provision and business growth
required to achieve our
strategic objectives. Directors’
own engagement with advisers
and the results of formal
engagement activities helped
to provide the Board with
assurance that the support
model would meet the
needs of our advisers and
Partner businesses, whilst
also underpinning our
medium- and long-term
strategic objectives.
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Board topic
Stakeholder
interests Engagement Outcomes/influence
Culture – Having articulated clearly our vision,
purpose and values during 2021, there was focus
in 2022 on specific culture objectives which
spanned employees, suppliers, advisers,
shareholders and society. The Board received
updates on these objectives which included
embedding and monitoring the culture vision
among all our employees, engaging with key
suppliers to set our expectations, and developing
a cultural contract with our advisers. The Board
has been able to monitor the current culture
at SJP against the vision set out in our values
of doing the right thing, being the best version
of ourselves and investing in long-term
relationships.
Shareholders,
advisers,
employees,
clients and
society
The Board receives regular
updates on the ongoing
‘culture programme’ which
we established to support the
embedding of the culture vision
within the business and to
determine the means for
monitoring the evidence of our
culture in action. Our workforce
engagement activity has also
provided important employee
and cultural indicators, with
Lesley-Ann Nash’s role as the
nominated Non-executive
Director for Workforce
Engagement providing the
Board with a direct means of
engagement. We have also
continued to engage and set
expectations with key suppliers
and plan to introduce a new
supplier code of conduct.
Ongoing insight from
management, coupled with
‘deep dive’ reviews, has helped
the Board to hone in on what
matters to our key stakeholders
from a culture perspective.
Although we appreciate the
need to be sensitive to the
cultures of individual Partner
businesses, engaging with
our advisers in relation to SJP’s
own culture is helping us
to not only establish what
should be expected from
us, but also to understand
whether their experiences
align with our culture.
Partner business financing – Supporting the
development of Partner businesses and
facilitating the sale and purchase of businesses
to other advisers within the Partnership through
the provision of finance has always been a core
part of the Group’s business model. This ensures
continuity of advice provision, which is directly
in the interests of clients and the long-term
sustainability of the Group. The Partnership is
made up of over 2,500 Partner businesses that
vary in terms of scale and focus. As we have
grown, so have many of these businesses and
inevitably those Partners who have been with us
the longest will contemplate their own retirement
at some point. During 2022, the Board saw not
only excellent identification and management
of capacity to support Partner lending, but also
improvements in the processes and disciplines in
place to manage transactions. This has benefited
both Partners and SJP.
Shareholders,
advisers and
clients
The importance of Partner
lending is appreciated by our
long-standing shareholders,
but we continue to engage with
all shareholders to help them
understand how fundamental it
is to our business model.
Continuous engagement with
the Partnership also allows us
to assess demand and trends
in Partner businesses that may
impact the future demand for
lending. Our approach to
Partner lending supports
regular lending and also
continues to develop to meet
the longer-term requirements
for Partners in larger or more
complex businesses. Alongside
the provision of finance,
feedback from clients helps
shape how we support Partners
to deliver continuity for clients
and employees of Partner
practices when ownership of
businesses transfers.
Engagement with advisers
together with clear messaging
on the importance of
succession planning has
assisted in the development of
an approach to Partner lending
and financing that is longer
term in nature and supports
the ongoing advice to and
servicing of clients. It has
also provided the Board with
assurance that the existing
Partner lending plan is robust
and aligned to our strategic
objectives. Further engagement
during 2022 has helped us to
also shape our thinking around
succession planning, which has
in turn allowed us to explore
how the provision of financing
could expand to encompass
different methods to suit
specific needs.
What the Board did in the year continued
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2
3
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Governance
Consumer Duty case study
The FCA’s Consumer Duty (the Duty) comes into force on a phased
basis on 31 July 2023, and has been a key focus for both the Board
and the wider SJP community during 2022, as the Duty has
implications not only for our clients but for all of our stakeholders.
The Board considers SJP’s culture to be already aligned with the aims of the Duty, but is clear
that there are areas for improvement that would support the Board’s ongoing assessment of
how the Duty is being met. Both the Group Risk Committee and the Board have received regular
updates throughout the year on progress in assessing the implications of the Duty for SJP and
establishing an implementation plan that will enable the Board and its subsidiaries to meet
their ongoing reporting obligations. In consultation with the boards of its impacted subsidiaries,
the Board concluded that it was appropriate to approach implementation of the new rules
from a Group perspective and in October 2022 the Board approved an implementation plan.
The Board has also appointed a designated Consumer Duty Non-executive Director Champion,
John Hitchins, who is responsible for ensuring that the Duty is being discussed regularly and
raised in all relevant discussions at meetings of the Board and its committees, as well as
challenging management on how the Duty is being embedded and how SJP is focusing
on customer outcomes.
The Board recognised at an early stage that the Duty would be a significant development
and has been keen to ensure that Directors and subsidiary directors are kept appraised of
developments and provided with context and insight that will help provide assurance that SJP
remains on the right track. Board development sessions have helped to increase the Directors’
understanding and knowledge of the subject, focusing in depth on the rules and associated
guidance of the Duty, the expectations of the FCA and how these translate to the Board’s
oversight responsibilities. The Board has also received guidance from external consultants
on the wider implications of the rules and emerging practices from across the industry.
At SJP, we believe we are starting from a solid base to deliver the requirements of the Duty, as
one of our key priorities, and a central pillar of our culture, has always been to put clients first
and to deliver good client outcomes, which is echoed in our Company values to do the right
thing and invest in long-term relationships. The Duty sets a clear and high standard for firms
in dealing with retail customers and we welcome this desire to increase the reputation of, and
trust in, the financial services industry. We are committed to ensuring compliance with the Duty.
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Role of the Board and its responsibilities
The role of the Board
and its responsibilities
Powers of Directors
The powers of the Directors are set
out in the Company’s Articles of
Association (the Articles), prescribed
by Special Resolutions of the Company
and codified in UK company law. The
Articles contain, for example, specific
provisions and restrictions concerning
the Company’s power to borrow
money. They also provide Directors
with authority to allot unissued shares,
up to pre-determined levels set and
approved by shareholders in general
meetings. The Articles can be
amended by a special resolution of
the members of the Company, and a
copy can be found on the Company’s
website. Our shareholders have
granted the Directors authority to
make charitable donations, and
further details on the donations
made can be found on page 177.
At the 2022 Annual General Meeting
(AGM), shareholders granted authority
to the Directors for the purchase by
the Company of its own shares, with
such authority expiring at the end
of the 2023 AGM, or 30 June 2023,
whichever is the earlier. The Company
did not purchase any of its own
shares during 2022 but the Directors
will propose the renewal of this
authority at the 2023 AGM.
Further to the powers granted above,
the Board maintains a full schedule
of matters reserved to it together with
a Group Management Responsibilities
Map which sets out the senior
manager functions, prescribed
responsibilities and control functions
within each subsidiary of the Group
(as applicable). The Group
Management Responsibilities Map
includes, inter alia, terms of reference
for the various Board Committees, a
schedule of the Company’s policies
and detailed job descriptions for each
of the Directors.
Division of responsibility
The job descriptions of each Director, including the Chair and Chief
Executive, and the division of responsibilities between them are clearly
defined and agreed by the Board. The responsibilities of each of the
Directors and the role of Secretary are summarised below.
Leadership
Chair
Responsible for the leadership
of the Board and its continuing
effectiveness; and for ensuring
that the Board is satisfied that
the Group’s purpose, values
and strategy align with its culture
and that communication between
the Executive and Non-executive
Directors, as well as with
shareholders generally, is effective.
Chief Executive
Responsible for the development
and communication of the Group’s
strategy; for developing and
achieving the business objectives;
for leading and motivating an
effective senior management
team; and for ensuring an
appropriate culture is adopted
in the day-to-day management
of the Group.
Chief Financial Officer
Responsible for providing
leadership and direction for,
and oversight of, the financial,
accounting, tax, capital, liquidity
and unit pricing activities of the
Group; and for maintaining
effective investor relations.
Independent oversight
Senior Independent
Non-executive Director
Responsible for providing a sounding
board for the Chair; for serving as an
intermediary for the other Directors,
when necessary; for leading the
appraisal of the performance of
the Chair; and for being available to
shareholders as a point of contact
if they have concerns which contact
through normal channels has failed
to resolve or for which such contact
is inappropriate.
Independent Non-executive
Directors
Responsible for contributing to the
entrepreneurial leadership of the
Group, within a framework of prudent
and effective controls. Non-executive
Directors provide independence,
impartiality, experience, specialist
knowledge and other diverse personal
skills and capabilities. In some cases
Non-executive Directors take on
additional oversight responsibilities
as is the case in relation to workforce
engagement and championing the
Consumer Duty.
The Board
Company Secretary
Responsible for guiding the Board in
meeting the requirements of relevant
legislation and regulation and for
ensuring that Board procedures are
both followed and regularly reviewed.
Directors have access to the advice
of the Company Secretary at all times,
as well as independent professional
advice where needed, in order to
assist them in carrying out their duties.
The Chief Executive has appointed an
executive committee (the Executive
Board) to support him in fulfilling his
responsibilities for developing strategy
for the Board’s approval, communicating
and implementing the Group’s business
plan objectives, ensuring that the
necessary resources are in place in
order to achieve the strategy and those
objectives, and managing the day-to-
day operational activities of the Group.
The Executive Board comprises the
Executive Directors of the Board and
other members of senior management.
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Scheduled
Board
meetings
Scheduled Board meetings follow an agreed format with the final agenda being set by the Chair,
Chief Executive and Company Secretary by reference to the forward agenda and having considered
key developments since the previous meeting. This approach ensures that coverage of the Board’s
key responsibilities is balanced against the need to focus on strategic priorities and address
topical matters.
The papers for each meeting, which include an Executive Report covering key developments
in the business and performance indicators, are sent to the Board a week ahead of the meeting.
This ensures that the information is timely and that the Directors are able to prepare for the meetings.
Ad-hoc Board
meetings
From time to time, the Board is required to hold meetings outside of its planned schedule, to consider
topics that require immediate attention or to approve Board appointments or transactions.
Non-
executive
Director
performance
updates
Meetings are held on an ad-hoc basis, when topics arise that warrant an informal discussion or
where the Chief Executive wants to provide an update on performance where the gaps between
formal Board meetings are longer.
Board
working
dinners
The Board regularly has working dinners, usually on the nights before Board meetings, to allow the
Directors greater time to consider topics that warrant a more discursive approach. From time to time
and where relevant, additional internal and external participants are invited to the dinners to present
on these topics.
Strategy
meetings
Focused strategy meetings are held each year to enable the Board and management to reflect on,
debate, refine and agree the Group’s strategy.
Non-
executive
Director
meetings
The independent Non-executive Directors meet privately with the Chair during the year, to consider
matters arising from Board meetings. They also meet without the Chair to consider his performance.
Development
sessions
Directors are provided with development sessions on specific topics during the year. Further details
can be found on page 117.
Other
meetings
The Board also appoints ad-hoc committees from time to time to manage procedural matters
relating to decisions it has made.
Planning and preparing
The Chair is responsible for setting the Board agenda together with the Chief Executive and the Company Secretary.
The Group’s strategy and business plan provide the basis for the forward Board agenda for the year and this is refined
as key topics and strategic priorities emerge. The Board’s forward agenda is coordinated with those of its Committees
to ensure that topics are given sufficient coverage in the most appropriate forums.
The Chairs of the various Committees and material subsidiaries report on their activity at each Board meeting and liaise
with the Chair to ensure items escalated from the Committees get sufficient time and focus on Board meeting agendas.
The Board and other key Director forums are explained in more detail below.
The work undertaken by the Board Committees is covered in more detail in the individual Committee reports.
See pages 122 to 174
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Board composition, succession and evaluation
Board composition,
succession and evaluation
The Board and its committees have a combination of skills, experience
and knowledge. Our succession plans aim to promote gender, social,
ethnic and cognitive diversity.
Composition
As explained on page 142, embracing diversity is one of
our core cultural values and in 2022 the Board updated
its Board Diversity Policy which aims to consider diversity
in the widest sense rather than focusing only on specific
aspects of diversity, to ensure that the Board composition
features a range of perspectives, insights and the cognitive
diversity needed for good decision-making. The Board
recognises that it is on a journey towards improving
diversity but made progress during 2022. The Board met
the target set by the Parker Review throughout 2022 and
as at the date of this report. Following the resignation of Ian
Gascoigne in March 2022, the Board was also meeting the
target set by the Hampton-Alexander Review although the
appointment of Dominic Burke in November 2022 means
that the proportion of women on our Board will be below
the 33% target for a short period. However, when appointing
Dominic, the Board was fully aware that the proportion of
women would rise to 37.5% when both Simon Jeffreys and
Roger Yates step down after the AGM in May 2023.
The Board is clear that it has a key role in overseeing
and supporting the drive for diversity at all levels of the
organisation. The benefit of diversity of thought is not
achieved simply by meeting targets, however, and the
Board and Group Nomination and Governance Committee
are cognisant that the underlying committees and
subsidiary boards will broadly be reflective of the overall
diversity across the Group. Each of those committees and
boards will have smaller memberships (where individual
changes could have material impacts on diversity ratios)
and could require specific skills or experience which are
vested in a smaller subset of existing Directors and
managers. We are also aware that diversity based on
demographic factors can be easier to demonstrate than
the diversity of backgrounds and cognitive diversity which
help to shape the multi-dimensional conversations and the
debates we experience in Board meetings. The broad range
of backgrounds and experiences, gained both within and
outside the financial services sector, on our Board, supports
wide-ranging conversations that reflect and recognise the
interests of all of our stakeholders. Further information on
inclusion and diversity can be found in the Nomination and
Governance Committee Report on page 142.
Independence
The Board determined that the Chair was independent
on appointment and believes that all of the Non-executive
Directors continue to demonstrate their independence.
When determining independence, the Board considers
each individual against the criteria set out in the Code
and also considers how they conduct themselves in Board
meetings, including how they exercise judgement and
independent thinking. Notwithstanding the Board’s
determination that all of the Non-executive Directors
are independent, it notes that Simon Jeffreys and Roger
Yates had notified it of their intentions to retire from the
Board following the 2023 AGM, by which time they will
have served nine years on the Board.
The Board notes that Paul Manduca and Simon Jeffreys
are both currently directors of Templeton Emerging Markets
Investment Trust plc but it is satisfied that the common
directorship does not impair either Directors’
independence.
Further information can be found in the Nomination
and Governance Committee Report on page 139 and 142
Tenure
0–3 years 4
4–7 years 3
8+ years 3
Gender
Female 3
Male 7
Ethnicity
White 9
Minority Ethnic 1
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Governance
Board and Committee structure and attendance
Our Non-executive Board
Committees
There are four wholly Non-executive
Committees of the Board. The Chair of
the Board is a member of, and chairs,
the Group Nomination and
Governance Committee. All of the
other members of these Committees
are independent Non-executive
Directors. Further information on these
Committees can be found in their
separate reports on pages 122 to 174.
Attendance in 2022
Director Board (total 6) Audit (total 6) Risk (total 6)
Nomination and
Governance (total 4)
Remuneration
(total 5)
Dominic Burke
(appointed
1 November 2022) – –
Andrew Croft (CEO)
– – – –
Ian Gascoigne
(stepped down
31 March 2022)
– – – –
Craig Gentle
– – – –
Emma Griffin
– –
Rosemary Hilary
(Chair)
John Hitchins
– –
Paul Manduca (Chair)
– – (Chair) –
Simon Jeffreys
(Chair)
Lesley-Ann Nash – –
Roger Yates (SID) (Chair)
Attendance Non-attendance
This table provides details of scheduled meetings held in the 2022 financial year and the attendance at each meeting of the members of each
Board/Committee.
Rosemary Hilary joined the Group Remuneration Committee on 1 August 2022. Dominic Burke joined the Group Audit and Risk Committees on
1 November 2022.
Other forums reporting to the Board
In addition to the wholly Non-executive Committees, the Board has also delegated specific responsibilities to three further
Committees. The terms of reference of these forums are regularly reviewed and are included in the Group Management
Responsibilities Map.
Forum Purpose
Group Defence
Committee
Comprises the Chair, Senior Independent Director, Chief Executive and Chief Financial Officer
and its purpose is to monitor dealing in the Company’s shares with a view to being prepared
in the event of a formal bid for ownership of the Company and to oversee engagement
with activist investors.
Group Disclosure
Committee
Comprises the Chief Executive and Chief Financial Officer and is responsible for identifying
matters to be disclosed to the market.
Group Share Scheme
Committee
Comprises the Executive Directors and its purpose is to assist the Board in fulfilling its
responsibilities for operating and administering executive, employee, adviser and restricted
share plans.
Group Nomination
and Governance
Committee
Chair:
Paul Manduca
Report on
page 139
Group Audit
Committee
Chair:
Simon Jeffreys
Report on
page 122
Group Risk
Committee
Chair:
Rosemary Hilary
Report on
page 132
Group
Remuneration
Committee
Chair:
Roger Yates
Report on
page 143
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Board composition, succession and evaluation
Directors’ appointments
The Board has a responsibility to ensure that appropriate succession plans are in place for the Board and senior
management. Details of progress made in the year can be found in the Report of the Group Nomination and Governance
Committee. A summary of key aspects of Directors’ appointments are set out below:
Appointment,
replacement
and re-election
of Directors
The Articles permit Directors to appoint additional Directors and to fill casual vacancies. Any Directors appointed
must stand for election at the first AGM following their appointment. All other Directors will stand for re-election
at each AGM. Directors can be removed from office by an ordinary resolution of shareholders or in certain other
circumstances as set out in the Articles.
Before a Director is proposed for re-election by shareholders, the Chair considers whether his or her performance
continues to be effective and whether he or she demonstrates commitment to the role. After careful consideration,
the Chair is pleased to support the re-election of all Directors at the forthcoming AGM. Each Director brings
significant skills to the Board as a result of their varied careers and we believe that this diversity is essential to
the mix of skills and experience needed by the Board and its Committees in order to protect the interests of the
Company’s shareholders. As in previous years, the Board is recommending to shareholders that all the Directors
retiring at the forthcoming AGM be re-elected, and further information can be found in the Notice of Meeting for
the forthcoming AGM.
Duration of
appointments
Non-executive Directors, other than the Chair, are appointed for a specified term and the Executive Directors have
service contracts. Copies of the terms and conditions of appointment of all Directors are available for inspection
at the registered office address and will be available for inspection at the Company’s AGM.
Terms of
appointment
The Executive Directors have service contracts with the Company that provide for termination on 12 months’ notice
from either the Company or the Director (except in certain exceptional recruitment situations where a shorter or
longer notice period from the Company may be set, provided it reduces to a maximum of 12 months within a
specified time limit). Service contracts do not contain a fixed end date. The Company does not have agreements
with any Director or employee that would provide compensation for loss of office or employment resulting from
a takeover, except that provisions in the Company’s share schemes may, in certain circumstances, cause share
awards granted to employees under such schemes to vest on a takeover.
Time
commitments
Non-executive Directors are expected to commit sufficient time to enable them to undertake their responsibilities
and, as explained in the Report of the Group Nomination and Governance Committee, their capacity to fulfil their
responsibilities is reviewed on an ongoing basis so that the Board can be satisfied that each Non-executive
Director commits sufficient time to the business of the Company.
Paul Manduca was appointed as Chair in May 2021 and devotes a significant proportion of his time to the role.
In conjunction with the Senior Independent Director, he regularly assesses his commitments and continues to
manage his portfolio of other activities to ensure that he has sufficient time to meet the requirements of the
position. He currently also chairs Templeton Emerging Markets Investment Trust plc, Majid Al Futtaim Trust and W.A.G
Payment Solutions Plc. He had a full attendance record at the Company’s Board meetings in 2022 and also attended
all Board Committee meetings in addition to spending a substantial amount of time engaging with the business
outside formal Board and Committee meetings. Whilst Paul is the chair of three quoted company boards, the time
that he is required to commit to his role on the investment company Templeton Emerging Markets Investment Trust
plc is significantly lower than would be the case for a trading company. The Board is satisfied that he commits
sufficient time to the business of the Company and will be able to do so throughout the remainder of his tenure.
Conflicts
of interest
The Board has in place procedures for the management of conflicts of interest. In the event a Director becomes
aware of an actual or potential conflict of interest, they must disclose this to the Board immediately. The Board
then considers the potential conflict of interest based on its particular facts, and decides whether to authorise
the existence of the potential conflict and/or impose conditions on such authorisation if it believes this to be in
the best interests of the Company. Internal controls also exist to conduct regular checks to ensure that the
Directors have disclosed material interests appropriately.
No Director has, or has had during the year under review, any material interest in any contract or arrangement
with the Company or any of its subsidiaries.
Directors’
and officers’
indemnity
and insurance
The Company has taken out insurance covering Directors and officers against liabilities they may incur in their
capacity as Directors or officers of the Company and its subsidiaries. The Company has granted indemnities to
all of its Directors in their capacities as Directors of the Company and, where applicable, subsidiary companies
on terms consistent with the applicable statutory provisions. Qualifying third-party indemnity provisions for the
purposes of section 234 of the Companies Act 2006 were accordingly in force during the course of the financial
year ended 31 December 2022, and remain in force at the date of this report.
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Governance
Directors’ development
Inductions for new Directors
An appropriate induction programme is designed to enable all new Directors to meet senior management, understand
the business and future strategy, visit various office locations and speak directly to advisers and staff around the country,
as well as being introduced to other key stakeholders. Induction plans are tailored to meet the specific requirements of
incoming Directors.
Continuing professional development
The Chair and Company Secretary ensure continuing professional development for all Directors, based on their individual
requirements, and this is achieved through a wide range of approaches:
Approach Examples in 2022
Specific development
sessions and training
Specific development sessions and events have been provided for the Directors during the
year and these have included further training on climate risks, the FCA’s Consumer Duty,
SJP’s data strategy, SM&CR and future technology trends. The sessions are led by a mixture
of internal and external subject matter experts, as was the case with the September
session on Consumer Duty co-presented with an external subject matter expert (which
was one of two Director development sessions on Consumer Duty that took place in the
year). The development sessions provide Directors with opportunities to engage with
employees from departments across the business to augment their knowledge of the
business, the marketplace and the regulatory environment. The Group Audit Committee
also holds development sessions to support the Committee’s understanding of topics
relevant to it, including developments in audit and corporate governance reform and
how these would impact St. James’s Place, which are outlined in the Report of the Group
Audit Committee on page 123.
Visits to head office,
other locations and
service providers to
meet with employees
and members of the
Partnership
During 2022 the business was able to return to a more typical schedule of in-person visits
and events that had not been possible during the two previous years due to the pandemic.
The Directors were also able to attend an increased number of Partner conferences and
other events that were hosted in regional offices, including employee engagement events.
Attendance at
subsidiary board
meetings, executive
committees and
management forums
During the year, Non-executive Directors periodically attended meetings of the boards
of subsidiary companies to gain further insight. They were also invited to attend Directors’
lunches hosted by senior management as part of the workforce engagement programme.
Attendance at seminars
or other events which
assist Directors in
carrying out their duties
Directors receive invitations from time to time to attend seminars and conferences that
provide opportunities to network and enhance their knowledge and experience. In 2022,
many of these events returned to taking place in person rather than virtually, providing
Directors with greater opportunity to make connections.
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Board composition, succession and evaluation
Directors’ induction
Induction programmes typically run for around three to six months for new Directors and are tailored to meet their
individual needs based on their existing knowledge and experience and specific aspects relevant to the roles they
will be taking up. The programmes are centred on three key elements which are summarised below:
Element What the element provides
Information
and materials
Directors are provided with a comprehensive library of key documents covering the Group’s history,
constitution, governance framework, corporate reporting, policies, key business areas and much more.
This helps Directors to build their knowledge of St. James’s Place, highlights areas of further interest
and provides a reference library to consult as and when appropriate.
Individual
meetings
Meetings are arranged with specific employees to explore in more detail significant aspects of the
business and to provide the opportunity to build relationships that will support the Directors going
forward. Where a Director will be carrying out a role on a specific board or committee, additional
meetings and development sessions will be set up to support the Director’s understanding of
significant matters relevant to that role.
Meeting
attendance
Directors are invited to attend meetings of committees of the Board that they do not sit on, the boards
of material subsidiaries and, where appropriate other corporate events and forums that will support
their understanding of the Group. Attendance at these meetings provides an opportunity for Directors
to observe the Group’s governance in action and familiarise themselves with some of the key and
emerging themes across the Group.
Where possible, meetings are scheduled to take place in person at an SJP office location; however, in some instances the
flexibility to convene meetings virtually has been beneficial. The transition from hard-copy papers to a secure Board portal
in recent years has also enabled us to build a comprehensive reference library for new Directors which not only supports
their induction but can prove useful throughout their tenure.
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Governance
2022 Board effectiveness review
Reflecting on the 2021 review
During 2021, the Board carried out an externally facilitated review, and following a formal selection process appointed
Independent Audit to carry out the review. The review identified several areas of focus which are summarised below,
together with updates on the progress made in 2022.
Area of focus Update on progress
Focus on people
Updates on our people forms part of the Chief Executive’s report at each Board meeting
and the Board has received quarterly updates on the work of the Workforce Engagement
Panel. The nominated Non-executive Director for Workforce Engagement also now has
the opportunity to update the Board at every Board meeting. During 2022 our new People
Director was appointed and she will bring fresh insight and a renewed focus on many of
our people policies and practices so that we continue to offer a great place for people to
build their careers. Wellbeing remains an important topic and has been covered regularly,
in particular as part of the responsible business and culture deep dives presented to the
Board. The Group Risk Committee considers people risks regularly and this includes
remuneration and wellbeing as specific areas of focus. As part of its ongoing monitoring
of emerging risks it frequently gets updates on aspects that impact people, including
recruitment and retention.
Macro trends
The Board’s recognition of the changing needs and expectations of clients, Partners and
employees is reflected in a number of its key strategic initiatives and reporting thereon.
Examples include:
The Board’s Strategy Day in June 2022 provided an opportunity to consider
the implications of macro trends on wealth management and wider society,
with external speakers invited.
Regular updates on the technology/digital journey are reported to the Board with
the Chief Operations and Technology Officer attending every other Board meeting
to update on technology and digital strategy.
NED development sessions have focused on data and innovation in technology
and updates from the Technology Advisory Group are brought to the Board regularly.
The Group Risk Committee has also considered a deep dive on responsible business risks
(including ESG) and has continued to monitor ESG as part of its monitoring of emerging risk.
The Board received an update on the responsible business strategy and plans which set
out how ESG will be embedded in our strategy.
IT security/cyber risk
Following the 2021 review the Directors received an overview of the current cyber
landscape and, supported by advisers, undertook a detailed review of cyber simulations
carried out by management and the key learnings and actions arising therefrom.
The Group Risk Committee has had specific deep dives on general cyber risks, cyber-
related administration and third party risks, and also receives a regular scorecard
covering security and resilience, whilst continuing to monitor emerging risks in this area.
Further information on the Board’s focus on technology, cyber and data can be found
in the case study on page 120.
Focus and impact
The Board and Committee forward agendas and development plans for 2022 provided
formal engagement points with the business and have focused the Board on key matters.
Regular informal engagement and location visits have helped to increase engagement
levels. Lesley-Ann Nash’s work with the Workforce Engagement Panel in her role as
nominated Non-executive Director for workforce engagement has also strengthened
the line of sight and extent of engagement with the workforce.
Culture
Following the conclusion of the 2021 review, the Board received a full update on the progress
made on embedding our culture vision during 2021, including the culture KPIs and dashboard,
and the 2022 culture objectives. Updates on aspects of culture are included in executive
reporting and where relevant in deep dives presented to the Board. Culture progress is also
reflected in reporting to the Group Risk Committee. A formal culture update was presented
to the Board in November 2022, where goals and narrative were endorsed by it.
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Technology, cyber and data case study
Technology, cyber and data are areas of significance
for all businesses, and we are no different.
As a Board we are careful to maintain the generalist capabilities, skills and
experience that underpin the effectiveness of the unitary board, and provide
the most effective base from which Non-executive Directors can provide
meaningful challenge.
Striking the right balance is a challenge in its own right, however, the Board,
supported by the Nomination and Governance Committee, continues to
evaluate the best means of capturing insight and expertise in areas such as
technology, cyber and data to inform discussion and debate. We established
a Technology Advisory Group (TAG) in 2021 to help advise and educate the
Board, and in 2022 we took the opportunity to review its effectiveness in
meeting its purpose.
The TAG is chaired by the Chief Operations and Technology Officer and is
attended by a Non-executive Director, members of the senior leadership
team and independent advisers with cyber and technology expertise.
The review acknowledged that, whilst the TAG had provided a valuable
forum to explore technology, cyber and data landscapes in more detail,
there was scope for enhancing the means of keeping the Board appraised
of developments and key themes. We agreed that the Board would continue
to have representation and receive updates from the TAG at each Board
meeting, but that additional focus and deep dives should form a part of the
Board’s focus in this area, alongside regular reporting and management
information. The executive report to the Board now includes an enhanced
technology dashboard at each meeting, with the Chief Technology and
Operations Officer attending to present focused updates regularly each year.
The dashboard informs the Board on strategic technology projects and the
operational excellence programme, as well as a status update on technology
operations to give the Board assurance on service availability, security and
key technology risks.
Specific development sessions for Directors were also identified as an
important means of keeping them abreast of the external environment and
internal developments. The Board received development sessions on data
and the future of technology in 2022. The data session, held with the Chief
Data Officer, focused on the internal data strategy and key successes of the
team during the year, as well as providing an opportunity for the Directors to
ask questions and discuss wider data topics such as artificial intelligence and
data and behavioural science. The future of technology session was delivered
by external subject matter experts and centred on key trends in technology
that were likely to have a meaningful impact on the financial services sector
in the coming years.
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The 2022 review
Although the Board was not required to carry out an externally facilitated review in 2022, the Board chose to appoint
Independent Audit to provide support in carrying out its review. The aim of the 2022 review was to narrow the focus
around some key areas, in particular the effectiveness of the committee structure and oversight and assurance in
relation to Group subsidiaries.
Themes emerging
The 2022 review identified several themes that highlighted areas of strength (see below) and also areas for the Board
to focus on going forward. Overall, the Board concluded that there were no significant areas for concern and the
Board and its Committees were operating effectively, albeit there will always be opportunities for further improvement.
The Board’s
contribution
The Board is well chaired and clear on the importance of its stakeholders. As new Directors
have settled in, the Board has been able to increase its influence, particularly with regard
to strategy development.
Risk management
The Board recognises that the Risk Management and Control framework in place is
deeply embedded in the organisation’s culture and operations. This provides Directors
with assurance but also ensures that the dialogue between the Board and management
is open and invites constructive challenge.
Committees
and subsidiaries
The Board’s committee structure is working well, with a clear understanding of what
it aims to deliver. Committees are well organised and have appropriate compositions.
The wider governance framework was also well understood and provided the Board
with adequate oversight of the operation of subsidiaries, as well as a mechanism for
two-way engagement.
Areas for focus
The areas identified for the Board to focus on in 2023 and beyond are summarised below, together with an overview
of the action already taken.
Area of focus Summary
People
As with many businesses, the working environment has evolved rapidly in the last few years and
employees and the business have had to adapt to the changes. Following the pandemic, 2022 has
seen even more pressure placed on society with fuel prices and inflation contributing to a cost-of-
living crisis that has had far-reaching impacts. Whilst the Board has been encouraged by how
management has responded to our employees, it also recognises that our people are a critical
part of our strategy and therefore this is an area that must remain prominent in our thinking.
Overseeing
culture
The Board has recognised the progress made with regard to our culture in recent years (see page
119) and acknowledges its own role in setting the tone and monitoring culture. Deep dive reviews
continue to provide valuable insight, but the Board would also like to sharpen its focus on the
indicators that highlight our impact on stakeholders.
Big trends
This is an area that is prominent on the radar of most organisations as they seek to anticipate how
macro changes will impact their business models in the future. We are no different and the Board
is clear that it needs to keep one eye on the horizon if our proposition is to remain relevant and
capable of responding to the changing needs and expectations of our stakeholders, in particular
our clients and Partners.
Investment
performance
and client
outcomes
2022 has been a volatile year for global markets and we have continued to see significant progress
made in the ongoing development of SJP’s own investment management approach. The ongoing
evolution of our Value Assessment Statement has driven an improvement in our reporting of
investment performance, and this is an area the Board wants to continue to prioritise in line
with regulatory expectations and our desire to deliver good outcomes to clients.
By order of the Board:
Paul Manduca, Chair
27 February 2023
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Audit, risk and internal control
Report of the Group
Audit Committee
Dear Shareholder,
I am pleased to present the
Committee’s report for the year ended
31 December 2022. The report provides
insight into our work over the year, and
details how we have discharged the
responsibilities delegated to us by
the Board.
The Committee fulfils a vital role in
the Group’s governance framework,
providing valuable independent
challenge and oversight across the
Group’s financial reporting, audit and
internal control procedures.
The Committee is conscious of the
environment we are reporting in
and is comfortable that appropriate
procedures are in place to ensure
this has been taken into account
as part of the year-end process,
which included consideration of
the accounting judgements and
actuarial assumptions.
In carrying out its remit, the
Committee paid particular attention
to the Government response to
the BEIS consultation on Audit
and Corporate Governance Reform
(BEIS consultation). At the beginning
of the year, management initiated a
project to review the results of the BEIS
consultation and plan our response.
Management kept the Committee
regularly updated throughout the
year on the various pieces of work
being undertaken. During these
updates, the Committee gave focus
to the evidencing of the effectiveness
of key internal controls, which were
not just limited to financial controls,
and the mapping of the current
assurance landscape on all aspects
of key corporate reporting across the
business. The Committee is pleased
with management’s progress
and will closely monitor the
implementation of the reforms
and associated consultations.
Management has also kept the
Committee appraised of the FRC
publications and thematic reviews
released throughout the year,
which included topics regarding
discount rates, EPS, deferred tax
asset disclosures, judgements
and estimates; this provided
the Committee with reassurance
that management was giving
due consideration to each.
Group Audit Committee
membership
Member and date joined Committee
Simon Jeffreys (Chair)
1 January 2014
Dominic Burke
1 November 2022
Rosemary Hilary
17 October 2019
John Hitchins
1 January 2022
Roger Yates
1 July 2014
The terms of reference of the
Committee set out the Committee’s
role and authority as Committee for
the Company and certain subsidiaries.
They can be found on the corporate
website at www.sjp.co.uk/about-us/
corporate-governance.
Key objective of
the Committee
The Committee’s primary purpose
is to oversee financial reporting,
the internal and external audits
and the Group’s systems of internal
control, and to provide guidance
and advice on these areas to
the Board and, where applicable,
other boards and committees
in the Group.
Regular attendees
at meetings
Chair of the Board; Chair of the
SJPUK Board; Chief Financial Officer;
Chief Risk Officer; Internal Audit
Director; Chief Actuary; Director,
Financial Reporting; and Senior
Statutory Auditor.
Simon Jeffreys
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Looking ahead to next year, the
Committee will continue to focus
on the implementation of the IFRS 17
Insurance Contracts Standard
and preparation and activities in
response to the BEIS consultation,
paying close attention to the
developing requirements.
Finally, following changes to the
composition of the Committee,
I would like to welcome Dominic Burke.
As announced during October 2022,
I will be retiring from the SJP Board at
the conclusion of the 2023 AGM having
served as a Director for nine years.
In accordance with succession plans,
it is the Board’s intention, subject to
regulatory approval, to appoint John
Hitchins as my successor. I would like
to take this opportunity to thank the
Committee members, management
and external auditors for their support
during my tenure.
Simon Jeffreys
On behalf of the Group
Audit Committee
27 February 2023
Operation and performance
of the Audit Committee
The Chair of the Committee discussed
agendas and significant matters
separately with the external auditor
and the Internal Audit Director in
advance of each meeting, with each
of the six scheduled meetings
focusing on the key topics set out in its
forward work programme. Attendance
by Committee members at these
meetings is shown on page 115. The
Committee also welcomed
attendance from the other Non-
executive Directors, who attended
Committee meetings as part of their
ongoing development. Private
sessions were held regularly with the
Internal Audit Director and the external
auditor, providing an opportunity for
matters to be discussed in the
absence of management.
Development sessions are held
regularly to further enhance the
Committee’s understanding of key
and emerging topics, and to provide a
platform for the Committee to discuss
and consider any impact on the Group.
Committee members also attended
external briefings and technical
updates, for example those given
by the major accounting firms. The
development session topics from 2022
are summarised in the table below.
The Committee evaluated its own
performance and effectiveness over
the course of the year and carried
out an annual review of its terms
of reference. The Committee’s
effectiveness was also reviewed
by the Board as part of its overall
assessment of its own effectiveness
(see pages 119 to 121). The Board and
the Committee remain satisfied that
the Committee operated effectively
and has the experience and
qualifications necessary to perform
its role successfully, noting in
particular that the Chair of the
Committee is a qualified accountant
and former Senior Audit Partner, and
that other members also have recent
and relevant experience and expertise
in the financial services sector.
The Committee was responsible for
carrying out the function required
under the FCA’s Disclosure and
Transparency Rule DTR7.1.3R (Audit
Committees) and complied with
the Statutory Audit Services for
Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 throughout
the year ended 31 December 2022.
Topic Outcome gained
Unit Trust Audits and
Funds Audit Industry
An understanding of PwC’s audits of the St. James’s Place unit trusts in the UK
and the broader perspectives of the financial reporting environment for UK funds.
TCFD and Investment
Scenarios
An understanding of the TCFD scenario testing in the context of the Group’s
overall approach and commitment to reach net zero by 2050.
Investment Division
Met with the key members of the investment division to gain a clearer insight
into the division’s operations.
IFRS 17 Insurance
Contracts Standard
An understanding of the impact of IFRS 17 on the Group.
BEIS Audit and Corporate
Governance Reform
An understanding of the key reforms and work being undertaken by
management to ensure the Group is prepared for implementation.
Digital Transformation
of Finance Function
An overview of the advances being made in enhancing the existing
operating model, including the increased use of automation within
the SJP finance function.
Controls Framework
An update on progress to enhance SJP’s internal controls financial reporting
framework.
Actuarial System
Transformation
An understanding of the new actuarial system that will be fully rolled out
in early 2023.
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Audit, risk and internal control
Report of the Group Audit Committee continued
The Committee’s activities are centred on a rolling cycle of key areas
of focus and events as summarised in this timeline:
July
Management present the
Half-Year Report and
Accounts
External auditors present their
half-year review report
Internal audit present their
interim Internal Controls
Evaluation
February
Management present the final
draft Annual Report and Accounts,
TCFD Report and Solvency II
reporting, along with the year-
end control and compliance
reporting, for the Committee
to consider recommending
to the Board for approval
Group Risk present their
year-end assessment of
risk and controls
Internal audit present their
Internal Controls Evaluation
External auditors present their
findings from the audit and
their Auditor’s Report, providing
confirmation of independence,
and the Committee considers
recommending to the Board the
reappointment of the external
auditors at the Company’s
next AGM
May
Management present their
review of the year-end process
The Committee reviews the
result of the annual evaluation of
the external auditors, and
considers whether the external
auditors continue to be
appropriately independent and
objective, and effective in the
role of external auditor
External auditors present their
internal control findings from the
year-end audit
The MLRO presents their annual
MLRO report and annual review
of systems and controls over
bribery and fraud
Internal Audit present their
annual review and quality
assessment of their
performance as an operational
function, including the
effectiveness of their delivery
of the audit plan
The Whistleblowers’ Champion
presents their annual report,
providing an overview of the
operation and effectiveness of
the systems and controls in
relation to whistleblowing
The Committee reviews their
terms of reference and evaluate
their performance
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October
Internal audit present their
internal audit plan for the
following year
External auditors present their
year-end plan
November
Management present their plan
for the year-end process,
including any technical
considerations as well as key
judgements
External auditors provide a
year-end progress update on
the audit
Group Risk present their findings
from the year-end internal
controls process
The MLRO presents their financial
crime report, covering the
operation and effectiveness of
the Group’s systems and
controls regarding anti-money
laundering, counter-terrorist
financing, financial sanctions
compliance, facilitation of tax
evasion, fraud prevention and
anti-bribery and corruption.
Management present the tax
strategy for approval
January
Management provide a year-
end progress update, including
key accounting issues and
judgements, presenting drafts of
narrative sections of the Annual
Report and Accounts, TCFD
Report and Solvency II reporting
Management present an
overview of the unit trust audits
External auditors provide a
year-end progress update on
the audit
Internal audit present their draft
Internal Controls Evaluation
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Governance
In addition to the items set out in the diagram below, the Committee also received regular updates on the following:
External auditor
independence
Progress against
the Internal
Audit Plan
Internal control
Capital
management
and financial
control breaches
Developments
in corporate
reporting
Fraud and
whistleblowing
activity and
reports from
the Money
Laundering
Reporting Officer
Key policies
Matters considered during the year
The Committee focused on a number of matters which can be grouped under four broad headings: corporate reporting,
external audit, internal audit, and internal controls. The following sections illustrate the Committee’s activities during the year.
Corporate reporting
Formal Committee meetings, covering the activities set out on pages 124 and 125, are supplemented during the year with
informal learning sessions to review, with management, key messages for both the Annual Report and Accounts and
Half-Year Results, and to explore in more depth any complicated issues emerging. This forum provides Committee
members with an opportunity to gain further clarity and understanding.
Some highlights of the Committee’s work during the year, including the significant issues it considered relating to the
Financial Statements, are included in the table below.
Key corporate reporting topics
Theme What did the Audit Committee do? What was the conclusion and impact?
Accounting
judgements
and actuarial
assumptions
Management provided a summary of the transaction
to dispose of a portfolio of Partner loans to a third
party. It noted that it had exercised judgement in
arriving at the conclusions that (i) the Group did
not control the entity that acquired the loans;
and (ii) the loans sold to the third party should
be deconsolidated for Group reporting purposes.
The Committee challenged management to ensure
that this judgement was recorded as a significant
accounting judgement in the Annual Report
and Accounts.
Management set out proposals for an update of the
persistency assumptions for the unit trust and ISA
business. The Committee discussed the proposals,
receiving confirmation from the external auditor
that they had no concerns with the change
of methodology.
As part of the year-end exercise management
provided a paper to the Committee setting out
the key accounting judgements and actuarial
assumptions.
As part of their ongoing oversight of investments the
Committee monitored the valuation process for level
3 assets, particularly private equity and private credit
assets held in the Diversified Assets Fund.
Following discussion, and noting
management’s engagement with the
external auditors on this subject, the
Committee concurred with the
accounting treatment of the transaction.
The Committee noted that high
persistency rates had been experienced
for a number of years, and also that the
proposed rates still reflected the range
of possible outcomes beyond
experience. As a result, they agreed
with management and approved the
changes for Group reporting purposes
and for recommendation to the
board of St. James’s Place Unit
Trust Group Limited.
The Committee was satisfied with the
judgements made, noting in particular
that it was content with the impairment
exercise in relation to the significant
operational readiness prepayment.
The Committee was reassured that
despite the complexity and the
uncertain economic environment
the valuation process was robust.
Accounting
regulation
and audit
There were no new accounting standards or
significant new disclosure requirements for 2022.
The Committee considered the proposed approach
to meeting the reporting requirements of IFRS 17 for
the 2022 year-end.
The Committee was satisfied that the
impacts of IFRS 17 were not material to
the Group, and also with the proposed
disclosures for 2022 year-end.
Final results
and Annual
Report
The Committee reviewed and provided input into the
periodic financial reporting, including the Half-Year
Report and Full-Year Accounts for 2022, including the
final results announcement, and the Group Annual
Report and Accounts for 2022, including the Viability
and Going Concern statements.
Following detailed deliberations,
challenge and discussion on key
aspects of the reports, the Committee
was satisfied with the periodic financial
reports and recommended their
approval to the Board.
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Report of the Group Audit Committee continued
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Theme What did the Audit Committee do? What was the conclusion and impact?
Regulatory
reporting
In addition to statutory reporting, the Committee
also reviewed the following regulatory reporting
requirements:
– Solvency II – Group Solvency and Financial
Condition Report (SFCR) and Group Regular
Supervisory Reporting (RSR)
– CASS – reasonable assurance reports on
St. James’s Place Investment Administration
Limited, St. James’s Place Unit Trust Group Limited
and Rowan Dartington & Co. Limited, and a
limited assurance report on St. James’s Place
Wealth Management plc
– TCFD Report – which encompassed
St. James’s Place UK plc & St. James’s Place Unit
Trust Group Limited
Management confirmed the specifics
of the rules for Solvency II reporting and
the Committee was able to approve the
publication of the 2022 year-end SFCR
and the submission of the 2022 RSR to
the regulator.
The Committee reviewed and was
satisfied with the CASS external
audit reports.
Following a request by the Committee
that management carry out a validation
exercise on the content of the report, the
Committee was satisfied with the TCFD
Report and recommended its approval
to the respective boards.
‘Fair, balanced and understandable’
opinion
The Board is required to provide its
opinion on whether the Company’s
Annual Report and Accounts taken
as a whole are fair, balanced
and understandable, and provide
the information necessary for
shareholders to assess the Company’s
position and performance, business
model and strategy.
To support the Board in providing its
opinion, the Committee carried out
a formal review, taking account of
investor feedback, commentary from
the Financial Reporting Council’s (FRC)
annual review of corporate reporting,
and management’s own assessment.
The Committee assessed the quality
of financial reporting through
discussion with the external auditor,
receiving presentations, and
discussing key matters with
senior financial management.
This process included considering
each of the elements (fair, balanced,
and understandable) on an individual
basis to ensure our reporting was
comprehensive in a clear and
consistent way, and in compliance
with accounting standards and
regulatory and legal requirements.
The external auditor also considered
and confirmed agreement with the
‘fair, balanced and understandable’
statement as part of the audit process.
Following its review, the Committee
advised the Board that the
Company’s Annual Report and
Accounts for the year ended
31 December 2022 were fair,
balanced and understandable.
External audit
Auditor activity and effectiveness
PwC were first appointed in 2009
and were reappointed as the Group’s
external auditor following a tender
process in 2016. The Group will be
required to change its audit firm
no later than the 2027 audit. As noted
in last year’s Committee report,
the Committee has continued with
discussions regarding the next tender
process, taking into account the need
to expand market diversity whilst
maintaining audit independence
standards. Planning for this has
begun with a view to completing a
competitive tender process by 2026,
well ahead of the FY27 audit cycle
beginning to ensure a smooth
transition between audit firms in
order to mitigate risk for stakeholders.
Andrew Moore held the position of the
Group’s Senior Statutory Auditor from
July 2019, stepping down in May 2022
at the end of the financial year-end
2021 reporting cycle due to a change
of his role at PwC. Gary Shaw was
appointed as his successor following
a selection process which the
Committee fully participated in.
New senior members of the PwC audit
team were also introduced during the
year-end process following a number
of key audit team members reaching
their seven-year tenure limits at the
end of the audit. The process provided
the Committee with reassurance of
knowledge transfer and continuity,
and that the audit team servicing
SJP remained of high quality.
As in previous years, PwC attended
all Committee meetings and met
privately with the Committee after
each meeting. The Chair of the
Committee also regularly met
with Gary Shaw, the Group’s Senior
Statutory Auditor, to receive updates
on progress and discuss any private
matters, including audit fees and the
profitability of the audit, progress of
the audit and the performance of
the SJP finance function.
To launch PwC’s programme of work,
the Committee received and agreed
their plan for the audit of the 2022
year-end. PwC then provided regular
updates on their work, culminating in
their overall final report and findings
from the year-end audit and the
review of the half-year results. The
reports were discussed with PwC,
and the Committee concurred with
management’s response to the
recommendations identified.
The Committee asked PwC to pay
particular attention to the recognition
of an additional operational readiness
asset in relation to the new contract
between St. James’s Place
International plc and SS&C, the IFRS 17
disclosures, the derecognition of the
portfolio of Partner loans sold to a
third party, and Diversified Assets Fund
(DAF) hedging and exposure to the
Group and was satisfied with the
results of PwC’s work and findings.
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Matters considered during
the year continued
During the year, an internal evaluation
was carried out to assess the
independence, objectivity and
effectiveness of PwC and the
effectiveness of the 31 December 2021
audit process, following the publication
of the FRC’s Guidance on Audit
Committees. PwC’s effectiveness was
assessed in various ways, including:
feedback from management involved
in the audit; feedback from the
Committee; assessing audit quality
and delivery against the audit plan;
and interrogating client administration
systems to ensure senior PwC audit
team members did not hold any
St. James’s Place products.
Audit quality
The Committee noted the
developing conversation in the
industry about the use of Audit
Quality Indicators (AQIs) to help
track the performance of an
audit and inform the annual
assessment of auditor
effectiveness. We will consider
how we might use AQIs during
the next cycle of reporting.
The Committee also noted the results
of the FRC’s review of PwC for the
2021/22 inspection cycle, and were
pleased to observe that, when
compared to the previous year, there
was an uplift in the percentage of
audits graded as ‘good or limited
improvements required’ from 80% to
83%. Many instances of good practice
were noted by the FRC and the
Committee therefore considered that
PwC currently provides a robust audit.
The Committee found that PwC
demonstrated robust challenge and
professional scepticism during the
2022 year-end process and that Gary
Shaw had been highly visible and
effective as the engagement partner
for the Group. PwC continued to provide
high-quality output to the Committee,
setting out clearly their approach,
findings and recommendations.
The Committee discussed with PwC
the results of their work and challenge
of management, especially in relation
to those matters on which the
Committee asked them to focus,
for example the recognition of an
additional operational readiness
asset, IFRS 17 outcome, derecognition
of the portfolio of Partner loans, and
DAF hedging.
The Committee agreed with
management’s view that PwC were
effective in their role as external
auditor. Following this evaluation, the
Committee recommended that the
Board seek the reappointment of PwC
as external auditor at the next Annual
General Meeting (AGM).
The Committee also reviewed the
evaluation of Grant Thornton’s
performance, in relation to their role
as auditors of St. James’s Place
International plc and contributing to
the Group audit by PwC, and were
satisfied with their performance.
Finally, the Committee was authorised
by shareholders at the last AGM to
determine the remuneration of the
external auditor. As such, the
Committee considered and approved
the 2022 audit fees. More information
on the audit fees can be found in
Note 5 to the Financial Statements.
Auditor independence and
non-audit services
During the year the Committee
considered proposals for all non-audit
services as they arose and received
updates at each meeting on fees
incurred with PwC for all services. The
Committee discussed and approved
the non-audit work carried out by
PwC, which was limited to audit
services relating to the corporate
reporting, such as the review of the
half-year results and validating
capital contribution payments to
St. James’s Place Wealth Management
plc. Full details of PwC’s remuneration
for 2022 are set out in Note 5 to the
Financial Statements.
The Committee carried out its
annual review of the Policy on
Auditor Independence with the review
resulting in minor changes. During
2023 the Committee will monitor for
any potential developments in relation
to the Ethical Standard arising from
the BEIS consultation.
In their audit report to the Committee,
PwC confirmed that they remain
independent of the Group and, having
carried out its own assessment, the
Committee concluded that PwC
remained independent and objective.
Internal audit
The 2022 Internal Audit Plan (the Plan)
was approved by the Committee in
October 2021. The planning process
is based on two approaches to
analysing risk. The first is a bottom-up
risk assessment of the Group’s audit
universe, which methodically assesses
the risks faced by each component
of the business. The second is a
top-down assessment of the key
risks to the Group. The resulting Plan
reflects both of these assessments,
providing a blend of bottom-up core
assurance activity with specific
risk-targeted audits.
This Plan, together with a risk-ranked
watchlist, was reviewed and monitored
throughout the year and all updates
and changes to the Plan were
specifically considered and
approved by the Committee.
Internal Audit Planning Process
Risk-based Internal Audit Plan
Core Assurance Activity
Bottom-up Risk Assessment
of Audit Universe
Specific Risk-Targeted Audits
Top-down Assessment of
Key Risks to the Group
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The Plan addressed three key themes, shown below with examples of audits undertaken:
Theme Description Example audits undertaken
Clients and the
Partnership
The Group’s processes for ensuring
appropriate client outcomes,
overseeing the continued growth
and expansion of the Partnership
compliance with the Group’s
advice standards, and the
effectiveness of the field
management team in maintaining
the required controls.
ESG and Responsible Investing
Fund Liquidity Management
Value Assessment Statements Costs and Charges
Investment Committee Decision-Making
Value for Money of Advice Framework
FCA Consumer Duty
Partner Growth and Development Function
Unit Pricing Controls
Operational
excellence
The robustness and effectiveness
of the Group’s core operational
processes, the impact of continued
growth and increased complexity,
and the major change initiatives.
HR Processes
Oversight of SS&C
Strategic Data Storage
IT General Controls in respect of various key systems
Onshore Bond and Pension Servicing Processes
Robotic Process Automation
Investment Data Hub
Systems Architecture
Regulation
and reputation
The regulatory landscape,
including significant recent and
expected future changes, the
importance of compliance across
the Group’s increasingly complex
operations, and the key function
of second-line monitoring.
Hong Kong and Singapore Risk Management Frameworks
Outsourcing and Third-Party Risk Management
Inclusion and Diversity
Gender Pay Gap Reporting
Identity and Verification Matching
Provision and Implementation of Regulatory Guidance
CASS Oversight
Fraud Risk Management
ICARA Process
The delivery of the Plan is the
responsibility of the Internal Audit
Director, who is accountable to the
Committee and who has regular
one-to-one meetings with the Chair
of the Committee and the Chair of
the Board. In addition, the Committee
Chair and chair designate attended
the internal audit strategy day held
during the year.
Each internal audit report is sent
promptly to Committee members
and progress reports are discussed
at each meeting to update the
Committee on progress against
the Plan and any remedial actions
allocated to management. During
the year, the Committee followed up
to ensure that management actions
from internal audit reports were
being completed, and that alternative
controls were in place until those
actions were completed.
Internal audit reports regularly to
the Committee on internal controls
and has confirmed that the Group’s
internal controls are generally
effective at keeping the Group within
the Board’s stated risk appetite.
Noting that certain controls require
improvement, management has plans
in place for further enhancements to
the control framework in specific
areas, with progress being monitored
by internal audit and the Committee.
For example, work is underway to
ensure first-line management is
consistent in its evaluation of risks and
controls and to continue to enhance
the controls around the Group’s
technology estate, given the ongoing
programme of change. In October
2022, the Committee considered and
approved the proposed 2023 Internal
Audit Plan.
Following a competitive tender
process completed in late 2021,
Deloitte LLP continue to provide
co-sourcing services for specialist
expertise and market insight.
Examples of services provided under
this contract include subject matter
experts such as IT and regulatory
specialists, and additional resources
to maintain and enhance the level of
assurance provided to the Committee.
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Governance
Matters considered during
the year continued
The effectiveness of the internal audit
function was externally assessed in
late 2019 by EY against the global
standards set by the International
Institute of Internal Auditors, the 2017
Code for Effective Internal Audit in
Financial Services, and current best
practice in our industry. The report
concluded that the internal audit
function remains effective and
‘generally conformed’ to the global
standards across all aspects of
performance. It highlighted the
function’s significant progress
and suggested opportunities for
enhancements, work on which is
now substantially concluded. Work
continued to progress during 2022
on the one recommendation that
remains open: to enhance the use
of data analytics within audits.
Data analytics have been employed
in a growing number of audits and
through developments in continuous
monitoring. This remains a key
priority for the team and is also
being supported through co-
source engagement.
An internal quality assessment
was carried out and presented
to the Committee in May 2022.
The Committee concluded that
internal audit is effective and
meets the needs of the Group.
The Committee also reviewed and
approved the Internal Audit Charter,
which can be found on our website at:
www.sjp.co.uk/about-us/corporate-
governance.
Whistleblowing
The Board ensures that appropriate
arrangements are in place to enable
individuals to raise any concerns
about illegal or improper behaviour
connected to St. James’s Place.
The Chair of the Committee is a key
contact in the Whistleblowing Policy
and is the Whistleblowers’ Champion
under the Senior Managers and
Certification Regime. On behalf of
the Board, the Committee reviewed
whistleblowing arrangements during
the year and received regular updates
on activity. Each case was considered
when first reported and tracked through
at each meeting until satisfactorily
concluded. The Committee established
that each of the matters had been
properly investigated and appropriate
actions taken, that no resulting
changes were required to the Group’s
procedures or systems of control,
and that none of the matters were
material to the financial position or
results of the Group. None of the items
indicated a systemic problem or
control weakness. Following review
and challenge by the Committee, the
Annual Whistleblowing Report and the
Whistleblowing Policy were considered
by the Board in May 2022. The Board
concluded that the whistleblowing
arrangements were appropriate
and consistently in force across
the entire Group.
Internal controls
Systems of internal control
The Board has overall responsibility for
ensuring that management maintains
comprehensive systems of internal
control for managing risk and for
assessing their effectiveness. On
behalf of the Board, the Committee
takes responsibility for assessing the
effectiveness of the Group’s risk
management and internal control
systems, covering all material controls
including financial, operational and
compliance controls for the Group and
the individual entities. It does this by:
overseeing the continuous review
of risk and control self-assessments
(RCSAs); and
monitoring the effectiveness of the
internal control model throughout
the year through the quarterly
updates provided by management
to the Committee.
Through our risk management
framework we identify and assess
risks. Our internal controls are
designed to manage the inherent risks
down to a level where the residual risk
is within our stated risk appetite, rather
than aiming to eliminate the risk
altogether. This provides appropriate
but not absolute assurance against
material misstatement or loss.
St. James’s Place plc is committed
to operating within strong systems of
internal control that enable business
to be executed and risk taken without
over-exposing the business to
reputational damage or potential
losses beyond risk appetite.
Specifically, in relation to the financial
reporting processes, the main
features of the internal control
systems include:
operation and assessment of
controls in key risk areas;
monthly review and approval
of all financial accounting data
including data generated by
our outsource providers;
formal review of financial
information by senior
management, for both individual
companies and the consolidated
Group; and
extensive documentation of
key processes, procedures and
applicable key controls associated
with financial reporting.
The Committee is provided with
updates on the operation of financial
reporting controls throughout the year
and each control is subject to an
annual cycle of review and reapproval
which culminates at the year-end.
In addition, the Committee receives,
discusses and evaluates quarterly
updates on the results from the Group
risk function on the effectiveness of
the internal control model. These
updates are underpinned by
management’s RCSAs which
are captured through the Group’s
risk and internal controls platform.
The Committee also receives and
discusses the assessments of internal
controls from internal audit to support
its review of the internal control
system. Actions identified through
internal audits, compliance monitoring
reviews, and through the RCSA
process via internal control updates
are monitored, to ensure suitable
improvements are made.
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During the period, the Committee
discussed the management activities
being undertaken in preparation for
future stages of the Department for
Business, Energy & Industrial Strategy’s
consultation paper on Audit and
Corporate Governance. The
Committee took steps to review its
audit and assurance policy and
expand assurance in certain areas,
particularly regulatory reporting and
ESG. The Committee also considered
the requirements for enhanced
control environment attestations and
the potential impact on the external
audit tender process.
Over the course of 2022, management
continued embedding Salesforce
as the primary CRM system for the
Partnership. This is part of a strategic
initiative to be ‘easy to do business
with’ via the upgrade of existing
technology supporting the Partnership
in advising clients. It also is significant
in improving the management of client
documentation and the Group’s ability
to maintain centralised oversight.
A further material development to the
control environment over the year was
a programme of activities focused on
improving the robustness of third party
oversight, including fund unit pricing.
During the year there have been
control-related failings on fund unit
pricing on several occasions resulting
from operational incidents involving
a third party service provider. Whilst
none of these resulted in client
detriment, a comprehensive root
cause investigation of the incidents
was commissioned and jointly
overseen by the Group Audit and Risk
Committees. Following the
investigation, the provider has
implemented further mitigative
control activities to prevent future
incidents, and these are assessed
as part of the regular monitoring
programme. Furthermore, internal
audit were engaged to provide
assurance over the risks of further
errors and the Committee will receive
reports and monitor the
implementation of planned actions
arising from this work.
Overall the Committee is satisfied that
the Group’s internal control and risk
management framework comprises
adequate arrangements, actions and
mitigating controls. The Committee
recognises that to support the
continuing growth and increasing
complexity of the Group, there is
a need to invest in improving and
strengthening the Group’s risk culture
and the risk management and
internal control systems.
These sources of assurance assist the
Committee in completing its annual
review and enable it to attest on
behalf of the Board that it has been
able to properly review the
effectiveness of St. James’s Place’s
system of internal control in
accordance with the 2014 FRC
Guidance on risk management,
internal control and related financial
and business reporting.
The Committee did not identify
any significant control failings or
weaknesses that remain unmitigated
and it has ensured that corrective
action is being taken on matters
arising from the review. Internal audit
and RCSAs identified areas where
controls improvements should be
made. For example, enhancements
are being made to the process for
evidencing the realisation of benefits
from projects. The Committee
continues to track progress on
these items throughout the year
to ensure actions are completed.
Bribery and fraud review
The Committee monitors and receives regular reports from the Money
Laundering Reporting Officer on the Group’s policies, systems and controls
to prevent bribery and fraud. During 2022, fraud update reports have been
presented at each Committee meeting and a comprehensive annual
report covering fraud and bribery was presented to the Committee in May.
It was determined that, overall, St. James’s Place’s controls are effective,
appropriate policies and procedures are in place, and operational
effectiveness of controls is evidenced.
The majority of attempted frauds against St. James’s Place and its clients
arise as a result of client account takeover activities involving email
hacking and email interception. Fraud prevention controls to prevent the
takeover of client accounts and fraudulent withdrawal of client funds are
reliant on manual controls performed by Partners and Partner support
staff. Whilst most operate the required controls effectively, individual
lapses do lead to losses, of which we have seen a small number in 2022.
The Group has seen some cases of fraudulent misrepresentation or
scams, aimed at persuading clients to transfer their funds for investment.
The following actions have been undertaken to counteract these threats:
An updated fraud prevention training module was issued to all Partners,
Partner support staff and employees to improve awareness of these
risks and how to counteract them;
Monitoring of St. James’s Place social media activity to detect
attempted takeovers or suspicious activity, and detection and removal
of cloned St. James’s Place websites; and
Communications to Partners, Partner support staff and clients via SJP
documents and social media to increase awareness of how to protect
themselves from a range of investment scams.
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Governance
Report of the Group
Risk Committee
Dear Shareholder,
I am pleased to present this report to
you as Chair of the Committee and
would like to welcome Dominic Burke
to the Committee and thank all the
members for their contribution during
the year.
After nearly two years of living with
the COVID-19 pandemic, in early 2022
the UK government lifted the last of
the restrictions and the risk of major
business disruption in the UK from
COVID-19 restrictions has abated.
However, new risks have materialised,
most notably the rapidly increasing
rate of inflation, the conflict in Ukraine
and related impacts on financial
markets and energy supply and these
have contributed to a cost-of-living
crisis which has more recently been
exacerbated by rising rates of interest.
In light of these issues we have been
cognisant of the impacts that these
challenges are having on all of our
stakeholders, including our clients
whom we endeavour to support
through the provision of sound
financial advice, to assist them in their
financial confidence and resilience.
The heightened political and
economic uncertainty has also
increased the likelihood of clients
finding themselves in vulnerable
circumstances and therefore the
Committee has continued to focus
on the Group’s approach to identifying
and supporting our clients who are in
vulnerable circumstances. This has
included formulating a new
vulnerability policy, enhancing
our corporate website to support
clients who require assistance,
and launching new online training
modules for the Group and its wider
community in order to educate and
raise awareness of how to recognise
and support clients with
characteristics of vulnerability.
Group Risk Committee
membership
Member and date joined Committee
Rosemary Hilary (Chair)
17 October 2019 and became
Chair on 19 August 2020
Dominic Burke
1 November 2022
Emma Griffin
16 September 2020
John Hitchins
1 January 2022
Simon Jeffreys
1 January 2014
Lesley-Ann Nash
16 September 2020
Roger Yates
1 January 2014
The Committee’s terms of reference
set out the Committee’s role and
authority and can be found on the
corporate website at www.sjp.co.uk/
about-us/corporate-governance.
Key objective
of the Committee
The Committee’s primary role is
to provide guidance, advice and
constructive challenge to relevant
boards in relation to the Group’s risk
appetite and management of risk.
The relevant boards are those of
St. James’s Place PLC and its wholly
owned subsidiaries (together the
SJP Group), which include its
regulated companies.
Regular attendees
at meetings
Chair of the Board, Chief Executive,
Chief Financial Officer, Chief
Operations and Technology Officer,
Chief Risk Officer, Chief Actuary and
Internal Audit Director are regular
attendees. Subject matter experts
and other members of senior
management are also invited to
attend and present on specific
topics throughout the year.
Rosemary Hilary
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Governance
The Group has also continued to
focus on the wellbeing of its advisers
and employees, with cost-of-living
payments made to our lower paid
employees in September 2022 and
enhancements to the support we
provide in relation to adviser and
employee wellbeing as part of our
responsible business strategy.
Our commitment to being a leading
responsible business remains core to
our strategy and the Committee has
monitored and challenged the
business in a number of areas,
including the risks posed by climate
change. We followed developments
through 2021 when the UK hosted
the COP26 summit and then in 2022
COP27 and the resulting outcomes.
The Group continues to advance
towards achieving its ambition of
being a leading responsible business
and meeting its commitments
of being climate positive in our
operations by 2025, net zero in
our supply chain and across the
Partnership by 2035 and net zero in
our investments by 2050. During the
year, progress was made through
focusing on each of the strategic
priorities within our Responsible
Business Framework: financial
wellbeing, investing responsibly,
climate change and community
impact. Initial goals have been set for
each and more details can be found
on pages 40 to 56.
In 2022 the regulatory agenda
remained full and has required the
business to assess the implications
of new regulatory policies including
in relation to the appointed
representatives regime and, most
notably, the new Consumer Duty
regulation which comes into force
in July 2023.
To ensure compliance with the Duty
the Committee has closely monitored
and challenged the approach taken
by the Group and reviewed the
governance arrangements that have
been established to manage the
programme and workstreams and
oversee the alignment of all relevant
practices and procedures. The
Committee reviewed the Group’s
implementation plan in October
(which was subsequently
recommended to the Board for
approval) and has since then
monitored the progress in assessing
and delivering the requirements of
the Duty ahead of implementation.
Committee members attended a
number of development sessions
during the year, including in relation
to the Duty, which further enhanced
their understanding of the key
requirements and impacts on
the Group.
The Committee has continued to
oversee and scrutinise the Group’s
risk profile and operational resilience.
During the year it reviewed the policy
and framework approach adopted
by the Group to ensure its important
business services remained
operationally resilient and were
prepared for operational disruptions
in order to minimise client harm. The
Committee also considered the stress
and scenario testing carried out as
part of the Own Risk and Solvency
Assessment (ORSA) in order to assess
the risks to the Group’s capital and
liquidity. This analysis continued
to confirm that the Group remains
resilient to macroeconomic shocks
arising from post-pandemic supply
chain pressures, the conflict in Ukraine,
rising inflation and interest rates
and volatile financial markets.
It also assisted in informing the
Group’s dividend decisions. Focused
reports from senior executives have
also contributed to the Committee’s
evaluation of the Group’s principal risks.
During the year, the Committee has
continued its focus on strategic and
emerging risks. A series of ‘deep dives’
was held with senior executives
supported by analysis from the
business to develop enhanced
understanding of how risks to
the Group’s strategy were evolving
and where increased focus of risk
management activities should be
prioritised. Additionally, the Committee
monitored and received in-depth
assessments on new and emerging
risks including inflation, the conflict in
Ukraine, climate change, employee-
related risks and shareholder activism.
The Group’s risk and compliance
functions sit under the executive
leadership of Mark Sutton, the Group’s
Chief Risk Officer (CRO), and during
the year I have worked closely with
Mark to set the agenda of the
Committee meetings and discuss
key issues.
In 2023 the Committee will continue to
probe and test the Group’s risk profile
to assess whether it remains within
the Board’s risk appetite, and to
monitor emerging risks to ensure
the Group is ready for the challenges
which lie ahead.
Rosemary Hilary
On behalf of the Group
Risk Committee
27 February 2023
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Governance
Operation and performance
of the Committee
The Committee comprises seven
independent Non-executive Directors.
The Committee Chair regularly meets
the CRO, the Chief Executive, the Chief
Financial Officer and individual
members of the Executive Board to
discuss key risk topics. The Chair, in
conjunction with the other Committee
members and the CRO, establishes a
rolling forward agenda, ensuring that
the key responsibilities of the
Committee are fulfilled, and that
significant and emerging risks are
considered at appropriate times.
The Committee’s performance
was reviewed as part of a Board
effectiveness review (see pages 119 to
121) and the Board remains satisfied
with the Committee’s effectiveness
and that, taken together, the
Committee has the experience and
qualifications necessary to perform its
role. The Committee’s annual review
of its terms of reference concluded
that it continued to discharge its
responsibilities appropriately.
Oversight of risk
The Committee spends a significant
proportion of its time receiving
updates from the CRO and other key
executives, who have direct access to
the Chair should the need arise. The
Committee also regularly considers
progress on and approves the
Compliance Monitoring Plan. The
Committee continuously monitors the
operation, performance and
resourcing levels of the risk and
compliance functions.
Oversight of the Risk Management
Framework is key to the delivery of
the responsibilities of the Committee.
During 2022, the Group’s principal risks
and emerging risks evolved with the
changing macroeconomic and
geopolitical situation. However, the
continued progress and investment,
including in organisational design
changes in the risk and compliance
function during the previous two
years, have meant that both the
business and the Risk Management
Framework were able to adapt to
these challenges and continued to
demonstrate resilience. The increased
use of technology and data analytics
tools in areas such as risk reporting
and anti-money laundering has also
led to more effective operations.
Assessing the implementation of risk
mitigation in the business is another
area which the Committee reviews
and challenges. Where risks
crystallise, the Committee reviews
the circumstances and root causes,
and then assesses the response of
management. More details on the
principal risks, how risk is monitored
and managed across the business,
the Risk Management Framework
and the risk appetite can be found
on pages 90 to 99. The Committee
reviewed and commented on the
Group’s Risk Appetite Statement and,
in its final form, recommended
its approval to the Group Board.
Interactions with regulators
As most of the activity within the
Group is regulated, the Committee
considers all material interactions
with the Group’s principal regulators:
the Prudential Regulation Authority,
the Financial Conduct Authority, the
Information Commissioner’s Office,
the Central Bank of Ireland, the
Monetary Authority of Singapore,
the Hong Kong Securities and Futures
Commission and the Hong Kong
Insurance Authority. It monitors
progress against any actions.
Activities during the year
On an ongoing basis the Committee
receives regular reports on a number
of areas, including:
updates on material risks that have
been prominent in the period since
the previous meeting;
reporting on key risk indicators;
interactions with regulators and
any actions required;
an assessment of the impact and
implementation of new regulations;
business assurance reviews;
the Group’s Own Risk and Solvency
Assessment, as well as similar
assessments for certain of
St. James’s Place’s regulated
subsidiaries;
the latest view of emerging risks
and any significant changes in the
risk environment;
reporting on conduct risk,
operational resilience and
outsourcing and supplier
management;
reporting on cyber security risks;
updates on progress with
implementing the new Consumer
Duty; and
examples of client complaints and
reports on clients in vulnerable
circumstances.
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Key matters considered during the year
The table below highlights some examples of where the Committee has provided review and challenge, alongside
relevant conclusions. Examples are shown across the Group’s nine risk areas.
Risk area What did we do? What were the conclusions?
Client
proposition
Investment risk landscape – The Committee received
an update on the development of a centralised risk
management team which is focused on the control
environment for investment risk management
associated with funds and outsourced providers. Their
key objective is to ensure consistency in the monitoring
of investment risk-taking across SJP’s appointed fund
managers’ which in turn contributes to continued
positive client outcomes.
Consumer Duty – The Committee received regular
updates on the approach being taken by the Group to
ensure the principles set out in the Duty are embedded
in the business. The governance and structure of the
programme were reviewed and areas of particular
focus were highlighted including culture, value
assessment, testing of consumer understanding, and
distribution arrangements for third-party products.
The Committee challenged and discussed the
development of the investment risk management
team’s objectives to ensure they focused on client
outcomes and ensure the plan was sufficiently
resourced to manage the risks associated with
the different strategies employed by the funds.
The Committee welcomed the decision to appoint John
Hitchins as ‘Consumer Duty Champion’ and recognised
that the governance structure of the programme would
evolve as it became embedded into the business.
The Committee reviewed and was provided assurance
as to the approach being taken to ensure appropriate
evidence about the value of ongoing advice; and the
actions being taken to ensure the Consumer Duty
principles pervaded the Group’s culture.
Conduct
Clients in vulnerable circumstances – The Committee
reviewed a detailed presentation on the key measures
and oversight in place across the business to support
clients in vulnerable circumstances, noting the progress
made in increasing awareness of and identification
of vulnerable clients. Progress included the launching
of six new online learning courses to the whole SJP
community. The Committee explored new initiatives
which included adviser notifications when vulnerable
clients made a withdrawal and the use of voice
analytics and management information to assess why
such clients contacted the Company.
Complaints handling – The Committee received
reports on the Group’s complaints handling operations
and data, which outlined the impact of circumstances
arising throughout the year on complaint volumes
and complaint handling processes. Circumstances
included reactions to volatile market conditions,
the conflict in Ukraine and the cost-of-living crisis.
Supervision of Partner businesses – Elements of the
Group Risk Management Framework were piloted with
certain areas of the Partnership and involved risk and
control self-assessment workshops. These resulted in
a forward-looking, data-led approach to risk
management being taken in our large and medium-
sized Partner businesses. The Group’s field risk teams
improved conduct risk management for advisers
through an organisational restructure which was
intended to improve the quality of supervision,
especially for advisers in their early years with
the organisation.
The Committee also received reports on the
oversight and management of Partners’ outside
business interests and a field risk team update
on client servicing.
The Committee discussed the actions being taken
in the business to continuously develop its approach
to identifying and supporting clients in vulnerable
circumstances and it was encouraged by the initiatives
being undertaken and the increasing awareness of
this complex area. It was agreed that progress would
continue to be monitored carefully in the future.
The Committee received assurance that sufficient
resource was available to manage complaints volumes
adequately. Working practices had been reviewed and
changes implemented which had improved the team’s
effectiveness and complaint handling methods.
The Committee was satisfied with the progress
made by advisers in better delivering and better
demonstrating ongoing servicing and advice to
their clients, as well as the increased awareness and
preventative actions being taken in relation to cyber
security risks throughout the Partnership. The depth
and frequency of monitoring by the field risk team
provided assurance that risks posed to client outcomes
and SJP’s reputation continued to be well managed.
The Committee was encouraged by the data-led
approach to the Risk Management Framework being
taken and the positive feedback received from
advisers, which has resulted in a focus on strategic
and operational risks for advisers. The Committee
noted that the approach to conduct risk management
could be scaled up effectively as the size of the
Partnership increased.
The Committee acknowledged that as a result of the
emerging risk analysis there would need to be a focus
on the challenges involved with improving technology
and data to meet the Partnership’s needs. Additionally,
an equal focus was required on improving Partner
productivity and reviewing different approaches
available to grow the Partnership, attract new talent
and ensure the Partnership continued to engage
with and value the benefits of the SJP proposition.
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Risk area What did we do? What were the conclusions?
Financial
ORSA – The Committee reviewed and challenged the
Group’s Own Risk and Solvency Assessment (ORSA)
process throughout the year. This included stress
and scenario testing activity which supports the
assessment of financial resilience, liquidity and
solvency ratios for the Group and the UK and Irish
insurance entities, as well as analysis and challenge
of reverse stress testing.
Contingency Funding Plan and liquidity – The
Committee reviewed the Group’s Contingency
Funding Plan and liquidity risk management for
St. James’s Place UK plc (SJPUK). The Committee
noted that SJPUK remains highly liquid and any
liquidity risks were closely monitored.
The Committee actively challenged the
comprehensiveness and depth of stress and scenario
testing including those relating to current topical
stresses; and was comfortable that: risks within the
Group remained at an acceptable level; the Group
was adequately capitalised to deliver its strategy; and
the Group would remain solvent in stressed situations
The Committee supported the Group’s Contingency
Funding Plan and the liquidity risk management
for SJPUK.
Partner
proposition
Technology support – The Committee received regular
reports on the implementation of Salesforce and cyber
security solutions as they continued to be rolled out to
Partner businesses.
Partner finance – The Committee reviewed the Group’s
proposition for providing finance in a rapidly changing
environment where the size and structure of the
Partnership has been evolving and requires different
funding strategies to meet Partners’ needs and ensure
the Group’s gearing and risk exposure remain within
appetite.
The Committee supported the strategy of
implementing Salesforce to further support Partner
businesses and to facilitate enhanced centralised
evidence of client servicing, and was encouraged by
the increasing number of Partner practices adopting
the Group’s cyber security solutions.
The Committee was reassured by the actions being
taken to adapt to the different financial needs of the
Partnership through provision of a broad and evolving
range of financing capabilities, and was satisfied that
the approach taken was sustainable in uncertain
economic conditions.
People
The Committee received updates on our key employee-
related risks, which focused on managing remuneration
policies and practices in line with regulatory
requirements, maintaining appropriate levels of
employee engagement and monitoring emerging
risks in relation to talent acquisition and retention.
To enhance monitoring of employee sentiment and
engagement, the Group used an annual employee
survey and additional pulse surveys, which provided
valuable insight and highlighted that employee
engagement scores were improving. The surveys
also indicated areas which were having an impact
on employees’ such as how the changing nature of the
workplace was affecting employees’ ‘sense of belonging’
and the importance of promoting inclusive behaviours.
The Committee discussed the challenges being
experienced in the acquisition and retention of talent,
which included competition created by increasing
numbers of opportunities for hybrid and remote working
and the increasing demand for people with specialist
skills in areas such as data science.
As part of the overall review of people risk, the Committee
considered remuneration risks. The review of such risks
supports the Group Remuneration Committee’s
consideration of the alignment of the Group’s
remuneration policies for Directors and employees with
its strategy. It also provides assurance on compliance
with existing and forthcoming regulatory requirements.
The Committee was satisfied with the results of the
actions taken to embed measures to ensure the
continued compliance of our remuneration policies
and practices with regulatory requirements.
The Committee was encouraged by the actions taken
to enhance employee engagement and inclusion,
which included: providing employees with the tools
and support they require to fulfil their roles; recognising
high performance; continuing to embed a diverse and
inclusive culture.
In terms of acquisition and retention of talent,
the Committee derived assurance from the various
actions that were being taken. These included salary
benchmarking; a cost-of-living payment to employees
earning below a certain level; and working policies
and practices that allow flexibility for employees.
The CRO attended meetings of the Group
Remuneration Committee to provide a view of risk
behaviours and of the conduct and management
of operational incidents in order to ensure reward
and performance were reflected appropriately.
The Committee’s own activities supported the Group
Remuneration Committee in reaching its conclusion
that remuneration policies continue to mitigate
potential conflicts of interest and do not encourage
inappropriate risk-taking.
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Key matters considered during the year continued
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Risk area What did we do? What were the conclusions?
Regulatory
Regulatory change – The Committee reviewed
and discussed the impact of upcoming regulatory
change and management’s response, for example,
to the FCA’s new Consumer Duty and policy on
Appointed Representatives.
Client money and client assets – The Committee
reviewed and approved the CASS Annual Report for
2021, which provided assurance that core operational
controls remained robust.
Regulator engagement – The Committee received
reports on the more material topics of discussion
with the Group’s regulators, as well as progress reports
on the actions taken to address matters raised by the
regulators as part of ongoing supervision and wider
industry communications.
Business assurance – The Committee received an
update on the effectiveness of the controls in place
to provide assurance that advice provided by advisers
is of a high standard. Technology was being utilised to
reduce the risk of errors and support advisers to ensure
quality of advice and client outcomes.
The Committee probed and received updates on
each area and was satisfied with the progress made
against the areas of regulatory change outlined
by management.
The Committee was comfortable with the rigorous
approach taken in relation to CASS controls and
oversight, and the processes used to enhance future
outcomes where items were identified for
improvement.
The Committee discussed and agreed the actions
being taken to address both firm-specific and
industry-wide themes identified by regulators.
Following the invasion of Ukraine by Russia the
Committee reviewed the potential impact of new
sanctions, and the actions taken by the Group to ensure
they are complied with and the situation is monitored
for any changing requirements.
The Committee noted that the business assurance
function remained effective in ensuring that the advice
provided to clients by advisers was of a high standard
and had been validated for compliance with regulatory
requirements during the year. The approach taken for
higher risk products and more complex transactions
such as defined benefit pension transfers was
managed robustly and within the Group’s risk appetite.
The Committee asked to receive reporting on the aged
analyses of the resolution of case feedback from
business assurance.
Security and
resilience
Operational resilience – The Committee oversaw the
project to develop the Group’s approach to operational
resilience and compliance with the new FCA and PRA
requirements. As part of this, the Committee reviewed
the operational resilience self-assessment, policy and
framework which set out the processes used to ensure
the Group remains operationally resilient.
Cyber risks – The Committee was provided with
updates on cyber risks, including the approaches to:
reduce cyber risk in the Partnership; increase cyber
resilience throughout the extended business including
suppliers; and respond to cyber threats.
The Committee reviewed the Group’s objective to
implement a base level of cyber security through either
self-accreditation to the Cyber Essentials Plus (CE+)
scheme or accreditation through subscribing to the
Group’s own Device as a Service (DaaS) proposition.
The Committee was satisfied with and approved the
operational resilience self-assessment, policy and
framework and continued to receive updates on the
operation of the policy framework and compliance
with the regulations. The Committee receives a regular
report which provides assurance on the resilience of
our important business services and important support
services and confirms that appropriate preventative
action is being taken to address any vulnerabilities
identified.
The Committee was encouraged that significant
progress had been made with Partners either
becoming self-accredited to Cyber Essentials Plus
or accredited through the use of our Device as a
Service offer.
The Committee discussed the main cyber risks
and was reassured by the controls in place and the
enhancements which were continually being made
to improve them in light of evolving threats, especially
following the conflict in Ukraine.
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Risk area What did we do? What were the conclusions?
Strategy,
competition
and brand
Strategy impact – As part of an overall assessment of
the Group’s progress towards achieving its strategy, the
Committee was presented with reports highlighting the
different risks faced by the business in meeting its
stated goals. More details can be found on pages 26 to
27. The reports emphasised the strong progress made
in delivering new business, retention and cost control.
The risks, both emerging and current, which threaten
the delivery of the strategy were considered alongside
the options available to address them.
The Committee also received reports on the risks faced
by St. James’s Place International plc (SJPI) and the
Asia business.
Emerging risks – The Committee considered regular
updates on management’s views of emerging risks,
supported by a detailed horizon scanning exercise
carried out with each member of the Executive Board.
The Committee also provided its views of emerging
risks that should remain within its short- to medium-
term focus.
Responsible business – The Committee received an
update on the Group’s progress toward being a leading
responsible business and reviewed the framework that
underpins the plan to achieve this strategic priority.
The Committee challenged the flexibility of the approach
in dealing with short-term variations in the
macroeconomic environment.
The Committee was reassured by the actions and
developments evidenced to mitigate the identified
risks to delivering the strategy, which included
enhancements in the areas of Partner proposition,
finance and recruitment.
The Committee was comfortable that appropriate
emerging risks had been identified and that due focus
was being placed on managing them where possible.
The enhanced reporting and more granular
assessment of these risks provided the basis for deeper
debate on the potential implications for the Group.
The Committee maintained the discipline of continuing
to set aside appropriate time to consider emerging
risks. Deep dives enabled the Committee to challenge
each of these in a more detailed manner and assess
the impact on the Group.
The Committee was satisfied with the approach being
taken to managing our stakeholders’ expectations in
relation to the transition to and delivery of the
Responsible Business Framework.
Third parties
Administration performance – The Committee
received updates on the risks to the provision of
administration services to Partners and clients. It was
reported that the overall risk environment remained
stable and ongoing work would ensure that the risk
remained at an acceptable level. This stability had
helped improve service delivery, quality of
administration and error rates.
Outsourcing – The Committee reviewed supplier
performance generally, and specifically the progress
being made to ensure compliance with new
regulations regarding oversight of outsourcing,
including the provision of support and training to
relevant employees.
The Committee also reviewed the Group’s
arrangements for managing cyber security risk across
its material outsourcers and the third and fourth parties
whom they sub-contract. The Committee challenged
the key mechanisms used to monitor changes to
material outsourcer relationships and the response
protocols for any cyber-related incidents.
The Committee was satisfied that service level
agreements (SLAs) continued to be met in all material
respects by our third-party administrators and centres
in the UK, Ireland and Mumbai. The time to process
certain transactions under the SLAs had improved
considerably during the year.
The Committee endorsed the additional support
measures which had been put in place for clients
and cases which were more complex, including use
of additional relationship managers and mechanisms
for monitoring and mitigating third-party supplier risks.
The Committee was encouraged by the progress made
and approved a new policy to support a proportionate
and risk-based approach to the management and
oversight of third-party suppliers and outsourcers.
The Committee monitors adherence to the policy
on a regular basis.
The Committee recognises the importance of maintaining
appropriate controls over outsourced activities and
was encouraged by the improvements made in
managing cyber risk throughout the supply chain.
Outlook
The Committee will continue its focus on ensuring the Group’s key risks are appropriately managed so that St. James’s Place
remains resilient, with strong foundations for long-term success. Particular emphasis will be placed on considering how
the Consumer Duty principles are embedded into culture throughout the SJP community to ensure continued positive
client outcomes. Further areas of focus will include reviewing the adequacy of our response to emerging risks, the
actions taken to ensure ongoing operational resilience, and assessing how the new appointed representatives regime
is implemented and governed. The liquidity and solvency of the regulated entities within the Group will of course also
remain important topics of focus along with the principles supporting our approach to product oversight and governance,
which ensure our products continue to meet the needs of clients and the Partnership.
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Audit, risk and internal control
Key matters considered during the year continued
Report of the Group Risk Committee continued
138
St. James’s Place plc Annual Report and Accounts 2022
Governance
Report of the Group Nomination
and Governance Committee
Dear Shareholder,
A Board’s success relies on
membership that has a diverse
balance of tenures, skills, experience
and perspectives, and maintaining
robust succession plans is key to
achieving this. As has been previously
reported, big strides were made in
2020 and 2021 in making appointments
(my own included) as part of our
longer-term succession plans,
recognising that a number of Non-
executive Directors were nearing nine
years’ tenure. With quite a few new
Directors and after limited opportunity
for face-to-face interaction during the
pandemic, 2022 was an important
year for Directors to enhance
relationships and the Board
and its Committees to bed in.
With Simon Jeffreys and Roger Yates
both reaching nine years’ tenure in
2023 the Committee took the
opportunity in 2022 to consider not
only the strength of the overall Board,
but also potential successors to fill the
roles of Senior Independent Director
and chairs of the Group Remuneration
and Audit Committees. Recognising
that we would lose experience when
both Simon and Roger stepped down,
we agreed to carry out a thorough
search for candidates to further
strengthen the Board, which resulted
in the recommendation of the
appointment of Dominic Burke.
When the Board announced Dominic’s
appointment in October, it was also
able to confirm that, subject to
regulatory approval, Emma Griffin and
Dominic Burke would succeed Roger
as chair of the Group Remuneration
Committee and Senior Independent
Director respectively, and John Hitchins
would succeed Simon Jeffreys as chair
of the Group Audit Committee.
Group Nomination and
Governance Committee
membership
Member and date joined Committee
Paul Manduca (Chair)
1 January 2021
Rosemary Hilary
22 July 2020
Simon Jeffreys
1 January 2022
Roger Yates
8 October 2018
The Committee’s terms of reference
set out the Committee’s role and
authority and can be found on the
corporate website at www.sjp.co.uk/
about-us/corporate-governance.
Key objective of
the Committee
The Committee has overall
responsibility for planning Board
and senior executive succession,
leading the process for new
appointments and ensuring
that these appointments bring
the required skills, experience
and diversity to the Board. The
Committee is also responsible for
overseeing the Group’s governance
arrangements, taking into
consideration the structure, size
and composition of all its boards
and committees to ensure they are
made up of the right people with
the necessary skills and experience
to direct the Group in the
successful execution of its strategy.
Regular attendees
at meetings
The Chief Executive, Company
Secretary and representatives
of external consultants.
Paul Manduca
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Governance
We continue to keep a close eye on
executive succession planning and
the Chief Executive discussed with the
Committee details of the short-term/
emergency succession plans in place
for the Executive Board and other key
management roles, together with an
indication of potential longer-term
succession options for each role. These
plans were enacted in the second half
of the year when Tom Beal was
appointed as Director of Investments
following Robert Gardner’s decision
to step down from the role to set up
a new venture in the environmental
sector. We wish Robert the very best of
luck in his new business ventures, but
are confident that Tom, who has been
with SJP for in excess of 14 years – most
recently in the role of Chief Investment
Officer – is a worthy successor and the
best candidate for the role.
Our focus on inclusion and diversity
remains undimmed and during the
year we updated the Group’s Inclusion
and Diversity Policy and our own
Board Diversity Policy. We continued to
monitor progress against our inclusion
and diversity strategy and stated
public commitments and have also
spent considerable time discussing
the implications of changes to
diversity targets relating to gender
and ethnicity, and changes to the
Listing Rules which will come into
force from 2023. In line with many
organisations, we have found the
pace of change that is required
challenging, but although we
acknowledge that we still have some
way to go, we can see clear evidence
of inclusion and diversity being
embedded in our culture.
The Committee continues to monitor
the Group’s governance framework,
which aims to ensure the Group
operates in the most effective
manner, with its various boards able
to work in a joined-up manner to
support the Group’s aims. For our
subsidiary boards and their directors,
an increase in entity-specific
regulation and legislation has given
rise to a myriad of new requirements,
making consistency, effective
communication and engagement
across the Group ever more important.
We were not required to carry out an
externally facilitated Board evaluation
in 2022, having last had one in 2021,
but opted to carry out an internal
evaluation with the support of
Independent Audit. The effectiveness
review was carried out in the second
half of the year and further details
can be found in the corporate
governance report on pages 119 to 121.
I look forward to reporting on further
progress as we continue our work
in 2023.
Paul Manduca
On behalf of the Group Nomination
and Governance Committee
27 February 2023
Activities during the year
Topic Summary of activity Find out more
Board
composition
Taking account of the tenure of existing Board members, noting that two Board
members would reach nine years’ tenure and were anticipated to step down in
2023, the Committee remained focused on the longer-term succession planning
for Non-executive Directors. The Committee considered the skills, experience
and diversity required to ensure ongoing effectiveness, and following a thorough
search recommended to the Board that Dominic Burke be appointed a Non-
executive Director.
See overleaf
Committee
composition
The composition of the Board’s principal committees is kept under regular
review and changes were made during the year to ensure appropriate balance
of membership.
See overleaf
Management
succession
The Committee was kept well informed about the short- and medium-term
succession plans for members of the Executive Board and key personnel and
also considered longer-term succession plans. Towards the end of 2022, Robert
Gardner stepped down from his position on the Executive Board and as Director
of Investments and the Committee considered the appointment of his
successor, Tom Beal.
See overleaf
Inclusion and
diversity
The Committee continued to assess the progress made against the inclusion
and diversity strategy and SJP’s commitments. The Committee also considered
changes to specific targets and the FCA’s Listing Rules requiring the disclosure
of diversity data. The Board Diversity Policy and the Inclusion and Diversity Policy
have also been reviewed and updated.
See page 142
Group
governance
The Committee continued to monitor developments that impacted the Group’s
governance framework and the overall operation of Group governance.
See overleaf
Board
effectiveness
The Committee kept under review the progress made against the actions
identified in the 2021 Board effectiveness review.
See pages 142
and 119 to 121
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Audit, risk and internal control
Report of the Group Nomination and Governance Committee
continued
140
St. James’s Place plc Annual Report and Accounts 2022
Governance
Operation and performance
of the Committee
During 2022 the Committee
comprised the Chair of the Board
and three independent Non-executive
Directors, who between them are also
the chairs of the Group Nomination
and Governance, Audit, Risk and
Remuneration Committees and
the Senior Independent Director.
Membership of the Committee,
alongside the Board’s other
Committees, was reviewed and no
changes to its composition were
made in 2022. The Committee’s
effectiveness was considered as part
of the Board’s overall assessment of
its effectiveness (see pages 119 to 121)
and it remains satisfied that, as
a whole, the Committee has the
experience and qualifications
necessary to perform its role.
Board succession and
Committee composition
The Committee has reported over
the last few years on the considerable
work undertaken to manage the
succession of a number of Non-
executive Directors who were reaching
nine years’ tenure on the Board. Simon
Jeffreys and Roger Yates will reach
nine years’ tenure in 2023 and will step
down from their Board positions at the
conclusion of the AGM in 2023.
Recognising that the loss of Simon
and Roger’s experience would impact
the Board, the Committee agreed to
engage Russell Reynolds to support
in the search for a potential new
Non-executive Director. Russell
Reynolds is a sponsor of the 30% Club
and is accredited in the FTSE 350
category of the Enhanced Voluntary
Code of Conduct for Executive Search
Firms. In May they provided a diverse
long-list of high-calibre candidates
who could further strengthen the
Board. Having taken account of the
availability of candidates, a formal
interview process was undertaken
before other members of the Board
were invited to meet the
recommended candidate. On
28 October 2022 the Board
announced the appointment of
Dominic Burke.
As well as losing their experience
when Simon and Roger step down
from the Board, we will also lose our
incumbent Senior Independent
Director and the chairs of the Group
Remuneration and Audit Committees.
The Committee has considered the
most appropriate successors for
those roles and recommended to
the Board that, subject to regulatory
approval, Emma Griffin and Dominic
Burke should succeed Roger as chair
of the Group Remuneration Committee
and Senior Independent Director
respectively, and John Hitchins should
succeed Simon Jeffreys as chair of
the Group Audit Committee. When
making these recommendations the
Committee noted the responsibilities
attaching to each role, ensuring that
those being put forward had the
necessary experience.
The composition of our committees
is another area kept under constant
review, and in August 2022 the
Committee recommended Rosemary
Hilary be appointed as a member of
the Group Remuneration Committee.
Upon his appointment to the Board,
the Committee also recommended
that Dominic Burke be appointed as
a member of the Group Audit and
Risk Committees.
Succession planning is an ongoing
exercise and remains at the forefront
of the Committee’s consciousness
and activities as it seeks to ensure the
Board remains effective. We remain
comfortable that the size, structure
and composition of the Board is
appropriate but will continue to
monitor the make-up and workload
of the Board. Where we deem it
necessary, we will look to bring
in additional Directors to address
potential gaps or the loss of one
of our existing Board members.
Executive succession
Our people are one of our most
important assets and ensuring we
appoint and retain the right people is
critical to our success. In order for SJP,
or any organisation, to be sustainable
and successful over the long term
it needs to be able to identify talent
and manage succession. Succession
planning at the executive and senior
management levels is a key focus of
the Committee and during the year it
has kept under review the short-term
succession plans in place for the
Executive Board and key personnel
in the event that emergency cover
is required, as well as the medium-
to long-term view.
However, succession planning isn’t
just important for senior management
roles and when successors are
appointed from within the organisation
there will inevitably be implications for
wider constituencies. With this in mind
the Committee is not only focused on
ensuring successors are identified
and nurtured, but also that the
impact of enacting succession
plans is anticipated and addressed.
The importance of having robust
succession plans was demonstrated
this year when Robert Gardner
resigned from his role as Director of
Investments to set up a new venture
in the environmental sector. Tom
Beal had been identified as Robert’s
successor which enabled the Chief
Executive and the Board to act quickly
and ensure an unbroken delivery of our
investment management approach.
Group governance
The regulatory landscape in the
financial services sector has evolved
significantly in recent years. As we are
a holistic wealth management firm,
this means that a number of
subsidiaries within the Group are
impacted by the extensive legal
and regulatory frameworks operating
in the UK and overseas. The
requirements set by our regulators
are often aligned but in some cases
there are differences, which adds
complexity to how we operate. In
order to avoid potential duplication or
inefficiency that could result from this
complexity the Group’s aim has been
to have a clear and demonstrable
governance framework to support our
key people and governance bodies in
fulfilling their individual and collective
responsibilities. The Committee plays
an important role in overseeing the
evolution of our governance
framework and the implications of
new requirements. In 2022 one such
evolution has been the appointment
of an independent chair and the
establishment of a separate audit
committee for our UK life company
St. James’s Place UK plc.
In recent years, the UK Corporate
Governance Code and financial
services regulations and guidance
have introduced requirements for
individual Directors to take on specific
roles on the Board. One such role is
the Consumer Duty Non-executive
Director Champion, which was
prescribed in the FCA’s rules and
guidance relating to the Duty
published in 2022. The Duty will come
into force in July 2023 and aims to
ensure that firms act to deliver
good outcomes for retail customers.
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Governance
The Non-executive Director Champion,
together with the Chair and Chief
Executive, is responsible for ensuring
that the Consumer Duty is being
discussed regularly and raised in all
relevant discussions at meetings of
the Board of the Company and its
committees. The Board, on behalf of
the Group, appointed John Hitchins
as the Group’s Non-executive Director
Champion. The Committee took the
opportunity in 2022 to clearly define
the responsibilities associated with
this role and that of the Nominated
Non-executive Director for Workforce
Engagement, formalising them for
inclusion in the respective Directors’
job descriptions.
Inclusion and diversity
Inclusion and diversity is an important
aspect of our succession planning
and we recognise that if we are to
meet our long-term inclusion and
diversity aims, it must form a part
of our formal plans. During 2022 the
Committee approved updates to the
Group’s Inclusion and Diversity Policy
and has continued to monitor its
implementation, our performance
against our inclusion and diversity
strategy and the targets which have
been factored into executive team
bonus performance criteria and
Board KPIs. Addressing diversity has
been a challenge throughout the
financial services sector and is
taking longer than anyone would
like. However, we are seeing progress
against our stated targets and,
perhaps more importantly, we see
clear evidence that a commitment to
diversity is embedded in our culture,
as demonstrated by its prominence in
the language we use and the actions
we take. We know that we need to
keep our foot firmly on the accelerator
if we are to achieve the progress
we desire which is why inclusion and
diversity features in the objectives for
executives’ annual bonuses. During
2022, the number of senior female
hires increased by 100% and the total
proportion of women in senior roles
increased to 28.1%, meaning we are
on track to meet our commitment for
30% senior females by September 2023.
Also during 2022, 14% of external hires
identified as minority ethnic, which
has resulted in the total proportion of
minority ethnic employees increasing
to 6.3% against our target of 10%
minority ethnic representation by
2023. Our latest Gender Pay Gap
Report is available on our website
at www.sjp.co.uk, and for the first time
in 2023 we are voluntarily publishing
our Ethnicity Pay Gap Report which
will also be available on our website.
Further information on how the
Inclusion and Diversity Policy has been
implemented can be found in the our
responsible business section of our
Strategic Report on pages 59 to 61.
The Board Diversity Policy, which
was updated in 2022, sets out our
own commitment and provides
an important part of the Board’s
succession plans, and the process
for recruiting new Directors. The Board
continues to meet the Parker Review
target and whilst the appointment of
Dominic Burke in November 2022 has
resulted in the percentage of women
on the Board falling to 30% temporarily,
the Board made the appointment fully
aware that the proportion of women
would be 37.5% when both Simon
Jeffreys and Roger Yates step
down after the AGM in May 2023.
During 2022 the FTSE Women Leaders
targets were updated, with increased
diversity figures to be met by 2025,
and the FCA introduced updated
Listing requirements relating to the
disclosure of diversity data, which
will be mandatory from 2023. The size
of our Board means that individual
membership changes can have a
material impact on the gender ratio,
but the Board remains committed to
ensuring social, ethnic and cognitive
diversity is achieved through the
identification of and active support for
our talent pipeline. Whilst there are no
short-term plans to replace the Chair,
Chief Executive, CFO or SID, all of which
roles are currently occupied by men,
the chair of the Group Risk Committee,
chair-elect of the Group Remuneration
Committee and Nominated Non-
executive Director for Workforce
Engagement are all women.
Whilst this means we would not
comply with the incoming Listing Rule
requirement if it was currently in force,
the Board sees each of these as
prominent roles, in particular that of
the chair of the Risk Committee, which
holds much greater importance for
financial services companies than for
other sectors, as demonstrated by the
level of scrutiny and focus it receives
from the financial services regulators.
Board effectiveness
The Committee has reviewed detailed
analysis of the significant other
commitments of existing and newly
joined Non-executive Directors and
how much time was spent on the
Company’s business and affairs.
The Committee and the Board are
satisfied that the Non-executive
Directors are able to, and do, commit
sufficient time and attention to the
Company’s business. In addition, the
Committee reviewed and approved
an assessment of the independence
of each of the Non-executive
Directors, concluding that each
of the Non-executive Directors
demonstrated that they remained
independent in character and
judgement. Further information
on these conclusions can be found
in the Notice of Meeting for the
Company’s 2023 AGM.
In 2021, following consideration
of a number of potential board
evaluation providers, the Committee
recommended to the Board that
Independent Audit Limited be
appointed to provide support with
internal reviews in 2022 and 2023.
The Committee has monitored
progress against the actions
that arose from the 2021 Board
effectiveness review during 2022
and is satisfied that they have
been addressed. Further details
of the progress made and the 2022
review are set out on pages 119 to 121.
For details on the training and
development provided to Directors
(including induction programmes)
please see pages 117 and 118.
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Audit, risk and internal control
Report of the Group Nomination and Governance Committee
continued
142
St. James’s Place plc Annual Report and Accounts 2022
Governance
Report of the Group
Remuneration Committee
Group Remuneration
Committee membership
Member and date joined Committee
Roger Yates (Chair)
1 January 2014
Emma Griffin
22 July 2020
Simon Jeffreys
1 January 2014
Lesley-Ann Nash
1 January 2022
Rosemary Hilary
1 August 2022
The Committee’s terms of reference
set out the Committee’s role and
authority. They can be found on the
corporate website at www.sjp.co.uk/
about-us/corporate-governance.
Key objective of
the Committee
The Committee’s primary purpose
is to ensure that the Directors’
Remuneration Policy and related
arrangements support the
business’s strategy and culture as
well as the recruitment, motivation
and retention of Executive Directors
and senior executives, whilst also
having regard to workforce
remuneration and complying
with regulatory requirements.
Regular attendees
at meetings
Chair of the Board, Chief Executive,
Chief Financial Officer, Chief Risk
Officer and People Director.
Contents
Section 1
Committee
Chair’s annual
statement (unaudited)
Section 2
Remuneration at a
glance and annual
report on remuneration
Section 3
2023 Directors’
Remuneration Policy
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5
Remuneration
Roger Yates
Dear Shareholder,
On behalf of the Committee, I am
pleased to present the Directors’
Remuneration Report for 2022
(the Remuneration Report).
The Remuneration Report is in
three sections:
this introductory statement;
the Annual Report on Remuneration
for 2022, including an ‘at a glance’
summary; and,
the proposed Directors’
Remuneration Policy (the Policy) for
the 2023-25 period, which also
explains any differences from the
Policy that applied during 2020-22.
The sections are set out in
accordance with the UK Directors’
Remuneration Report Regulations
2013, as amended in 2018 and 2019.
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Governance
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Remuneration
Shareholder support
The Policy that applied for the 2020-22
period was approved by shareholders
at the AGM in May 2020 with 94.71% of
votes cast in favour. The Committee’s
implementation of that Policy also
received strong support at the AGMs
in 2021 and 2022, with 99.62% and
97.72% votes in favour, respectively.
We have monitored developments
in shareholder and voting agency
guidance on remuneration and
undertaken two significant
shareholder consultations
over the last two years.
In 2021, we consulted with major
shareholders on changes to the
performance metrics for the annual
bonus for 2022 and subsequent years.
These changes, which did not require
a change to the Policy, were designed
to provide a rounded view of financial
performance, with three key financial
criteria. These metrics are familiar
to shareholders and help to drive
current year profits and future growth.
The proposals were welcomed by
shareholders who responded to the
consultation and were implemented
by the Committee for the 2022
performance year.
During 2022, we conducted a
thorough review of the Policy, and
consulted with major shareholders
on some proposed amendments,
in preparation for the normal triennial
vote at the AGM in 2023. Shareholders
who responded were generally
supportive of the proposed changes
and made a number of helpful and
constructive suggestions for the
Committee to consider. This feedback
was taken into account as the
proposed Policy was finalised for
inclusion in this Remuneration Report.
Restraint in executive director
remuneration
During the 2020-2022 Policy period, the
Committee has applied a restrained
approach to remuneration for Executive
Directors. Zero annual bonuses were
awarded for 2020 and zero base salary
increases were awarded in 2021, despite
robust Company performance, and
strong personal performances from
the Executive Directors.
The Long-term Incentive Plan (LTIP)
award maximum of 250% of base
salary was approved by shareholders
at the Policy vote in 2020. However, the
Committee decided to defer
implementation of this maximum
grant level until 2022 – awards in 2020
and 2021 were held at the previous
maximum level of 200% of base salary.
Base salaries and total variable pay
maximums for our Executive Directors
have been below market benchmarks
for financial sector companies of our
size for many years. Nevertheless, the
Committee has kept base salary
increases no higher than the level
applicable to the wider SJP workforce
– including a zero award in 2021.
Annual performance and
bonus outcomes for 2022
The outcome for the annual bonus
reflects the strong financial results for
the year and the good progress made
by the Executive Directors in meeting
or exceeding the strategic goals
set by the Committee at the start
of the year which are fully explained
in the Report.
Before approving the performance
outcome, the Committee considered
whether there were any wider
performance or risk management
factors that might require a downward
discretionary adjustment. It concluded
that the outcome reflected the
overall performance achieved by
the Company over the one-year
period whilst maintaining effective
risk controls. Therefore, the
Committee decided that
no downward discretionary
adjustment was appropriate.
Based on this assessment of
performance, the Committee
determined that 77.1% of the maximum
annual bonus should be awarded to
Executive Directors for 2022.
The performance criteria and
outcomes are fully explained in the
Remuneration Report. The Committee
has continued to enhance the level
of detail and clarity of information
in the Remuneration Report about
the strategic and operational
performance criteria, and the
Committee’s assessment of this
non-financial part of the scorecard.
In accordance with the Policy, 50% of
the bonus is deferred into shares for
three years.
Long-term performance, and
Performance Share Plan (PSP)
outcomes for 2020-22
The three years ending 2022 have
been a period of strong absolute
and relative performance, and the
PSP outcomes reflect this. The relative
Total Shareholder Return (TSR) was
above median in the range set by the
Committee, and Earnings Per Share
(EPS) growth being towards the upper
end of the range set by the Committee.
Based on this, the total metric-driven
outcome for the 2020-22 PSP cycle
was 86.4% of maximum.
The resulting vested shares are
subject to a two-year post-vesting
holding period, in accordance with
the Policy.
Before approving the PSP outcomes,
the Committee considered whether
there were any wider performance or
risk management factors that might
require a downward discretionary
adjustment. It concluded that in line
with the outcome for the annual
bonus that the PSP outcomes were
a good reflection of the overall
performance achieved by the
Company and the value delivered
for shareholders, over the three-year
period, and that the results have been
achieved whilst maintaining effective
risk controls. Therefore, the Committee
decided that no downward
discretionary adjustment was
appropriate. The Committee also
considered whether any adjustment
should be made for ‘windfall gains’
(see opposite).
Section 1
Chair’s annual statement (unaudited)
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‘Windfall gains’
The Committee carefully considered
whether a downward adjustment
should be made to the PSP vesting
outcome in 2023 to take account of
the COVID pandemic-related stock
market ‘shock’ around the time of
grant in March 2020 – specifically
the impact of this on the number of
shares that were awarded. Due to
the general stock market fall, the SJP
share price at the time of grant was
£7.13, compared to £10.26 at the time
of the prior year’s grant in 2019. This
resulted in Executive Directors being
granted 44% more shares at the 2020
grant than they had received at the
prior year’s grant (excluding the
impact of year-on-year salary
changes on the grant value).
The Committee considered a number
of balancing factors in assessing
whether an adjustment should be
made at vesting for this ‘windfall gain’:
The fall in the share price around the
time of grant was not a consequence
of SJP’s performance or that of the
management team. It was a global
phenomenon resulting from the
COVID pandemic ‘shock’.
Our Executive Directors were not
insulated from the negative effects
on vesting values of the COVID-
related market ‘shock’. These
negative effects included the
impact on the value of 2017 PSP
awards vesting in 2020, and the
value of deferred bonuses earned
for the 2016 performance year that
vested in the spring of 2020.
Our Executive Directors were also
not insulated from the economic
effects of the pandemic on
performance outcomes for 2018
PSP awards vesting in the spring of
2021 (which vested at only 9% of
maximum, compared with 63% for
the 2017 PSP awards vesting for
performance to the end of 2019
before the pandemic).
Unlike many FTSE 350 companies,
we awarded zero bonus for 2020,
despite robust performance
relative to the non-financial criteria
that made up 50% of the annual
bonus. Executive Directors also
received zero base salary increases
in spring 2021 and voluntarily
waived 20% of base salary for three
months during 2020. The Chief
Executive’s and the Chief Financial
Officer’s total remuneration for
2020 was, respectively, 43% and
33% lower than for the prior year, in
the context of the COVID pandemic.
SJP did not draw upon government
support during the COVID
pandemic, nor make any COVID-
related redundancies, and we
reinstated the proportion of the
withheld 2019 final dividend in
March 2021.
If there had, instead, been a share
price ‘spike’ at the time of the
award, the Committee would not
have increased the size of award
in order to align it with the size of
the previous year’s award. The
Committee has not compensated
Executive Directors for any share
price ‘spike’ at the time of award in
previous year’s. For example, the
award price of the PSP in March
2014 spiked at a level 65% higher
than the previous years’ award,
resulting in 40% fewer shares being
awarded; however, no upward
adjustment was made to the
award size to mitigate this negative
impact on Executive Directors.
Having considered all the relevant
factors, the Committee concluded
that no adjustment will be made to
the PSP vesting outcome in respect of
the 2020 PSP awards due to vest in
March 2023 for the Executive Directors.
Changes to the Board
Ian Gascoigne retired as Managing
Director from the Board and the
Company on 31 March 2022. His
remuneration in this Report is for
the portion of the year that he served
until the date he left the Board. He
remained eligible for annual bonus
for the part of 2022 that he served
as a Executive Director. Full details
of the treatment of Mr Gascoigne’s
remuneration on retirement were
set out in last year’s Report.
On 1 November 2022 we welcomed
Dominic Burke as a Non-executive
Director onto the Board. Details of the
remuneration for all of the Directors
serving throughout the year
can be found later in the Report.
As announced during October 2022,
I will be retiring from the SJP Board
at the conclusion of the 2023 AGM
having served as a Director for nine
years. In accordance with succession
plans, it is the SJP Board’s intention,
subject to regulatory approval,
to appoint Emma Griffin as my
successor. I would like to take this
opportunity to thank the Committee
members, management and
shareholders for their support during
my time as Chair of the Committee.
Proposed Policy for 2023-25
The Committee has undertaken
a thorough review of the Policy in
preparation for the triennial AGM
vote, including consulting with major
shareholders as set out above, and
taking account of remuneration for
other SJP employees. The Committee
concluded that the overall
remuneration structure continues to
be suitable for SJP and is aligned to our
strategic goals. Where amendments
have been proposed to the Policy
and practice, these are intended
to: support the continued growth of
the business over the next three years;
assist retention and, when necessary,
recruitment of talent; and, ensure that
the Policy includes features of best
practice in UK executive remuneration.
The key proposed changes to the
Policy and practice are:
to increase the weighting on
financial metrics in the annual
bonus to 60% (from 50% currently),
with a corresponding reduction
in the strategic and operational
metrics weighting to 40% (from
50% currently);
to align the maximum annual
bonus more closely with market
norms for companies of SJP’s size.
The current maximum of 150% of
base salary (with half deferred into
shares) compares with medians of
230-275% of base salary for CEOs
and CFOs in listed financial sector
companies of our size. We propose
to increase the bonus maximum
in two stages, to 175% in 2023, and
to 200% for 2024 and beyond –
still below the median levels in
other financial sector companies.
Maximum award levels for the
PSP are unchanged at 250% of
base salary;
to reduce the weight of the
Embedded Value (EV)-based
Earnings Per Share (EPS)
performance metric in the PSP to
one third (from two thirds currently)
and introduce a Cash Result-based
EPS performance metric with a
weighting of one third. Relative
Total Shareholder Return (TSR)
will continue to be used as a
performance metric for the
remaining third. These
performance metrics provide
a good balance, reflecting
performance over the long-term
in growing the business and in
delivering value and cash flows
for shareholders;
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2
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Remuneration
Report of the Group Remuneration Committee continued
to measure EPS growth for future
PSP awards against absolute
targets rather than relative to
inflation. We are one of the very
few remaining companies using
inflation-linked targets in its PSP.
With the increasingly volatile and
unpredictable inflation levels in the
economy, continuing the inflation-
linked approach risks undermining
the incentive effect of the PSP;
we therefore also propose to
measure growth on a Compound
Annual Growth Rate (CAGR) basis,
which is more exacting than the
Average Annual Growth Rate
(AAGR) basis used previously. The
EPS targets for the 2023 award are
detailed in this Report on page 164;
to increase the post-cessation
shareholding requirement for
Executive Directors to match
the Investment Association
guideline; and
to reduce the existing Executive
Directors’ pension allowance from
1 January 2023 to 15% of base salary
(from 20% currently). The allowance
for new Executive Director
appointments is already aligned
with the level for other employees,
which is 10% of base salary on
joining, rising to 15% with service.
During the consultation with
shareholders, a number of
respondents highlighted the
importance of ESG-related metrics in
variable pay. This feedback has been
considered by the Committee. For the
last two years the strategic objectives
relating to the annual bonuses for the
Executive Directors have included a
category related to our culture and
being a responsible business. This
category includes a range of ESG
targets, with progress tracked each
year. It reflects our aim to become a
leading responsible business, and we
will continue to set relevant and
stretching targets for the Executive
Directors. Our commitment to
addressing climate change is also
reflected in our responsible
investment targets and our
membership of the Net-Zero Asset
Owner Alliance. Although we have not
introduced an ESG-related metric to
the PSP for 2023, the Committee will
consider this for future PSP awards.
Salary increases for 2023
Base salaries in 2022 for the Chief
Executive (£590,947) and Chief
Financial Officer (£427,300) were
substantially below the relevant
market benchmarks for a company
of SJP’s size, at 82% and 84% of the
financial services market medians.
There is a strong case for re-positioning
these salaries, to better align them
with the market level that the Company
would need to pay to recruit and
retain individuals of the necessary
calibre if the roles became vacant.
However, the Executive Directors and
the Committee each concluded that,
given the prevailing economic and
cost-of-living context, base salary
increases in 2023 for our Executive
Directors should not exceed the
average percentage increases
applying to the wider SJP workforce.
The actual increase for the Executive
Directors determined by the
Committee for 2023 is 5%, which is
below the average of 8% for the wider
SJP workforce.
The Committee will keep the salary
levels under review for future years.
There may be a need to re-position
base salaries at some point during
the 2023-25 Policy period.
Board Chair fee and Non-
executive Director fees for 2023
The Committee reviewed the Board
Chair fee and concluded that it
would remain unchanged in 2023.
The Committee intends to consider
the Board Chair’s fee again for 2024,
when the current Chair will have
served three years.
The Board (excluding Non-executive
Directors) reviewed the Non-executive
Director fee rates and concluded that,
overall, Non-executive Director fees
were not materially out of step with
the market, and having taken account
of the wider economic environment,
agreed that incremental increases
would only be made where gaps
existed. With effect from 1 January
2023, fees for the chairs of the
Group Audit, Group Risk and Group
Remuneration Committees will
increase by £1,000 per annum
(to £26,000 per annum) and fees
for members of these committees
will increase by £500 per annum
(to £10,500 per annum).
The objectives of the
remuneration policy are:
to support the retention of
individuals with the experience
and skills to drive the
performance of the Company;
to ensure remuneration is
transparent and reflects the
performance of the Group in
the relevant year and the
longer-term. Annual bonus
and long-term incentive
opportunities are therefore
linked to the achievement of
demanding performance
targets; and
to align pay with the strategic
objectives of the Company
and the interests of our
shareholders whilst giving
due regard to principles of
best practice and relevant
regulations.
The Policy can be found on
pages 166 to 174.
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Consultation with colleagues
One of our Committee members, Lesley-Ann Nash, is also the Non-executive Director with responsibility for workforce
engagement. Lesley-Ann conducts regular meetings with our Workforce Engagement Panel, which includes a cross-section of
SJP colleagues. This included a remuneration session during 2022 which I also attended as Chair of the Committee along with
the Committee’s independent adviser, to discuss the Policy and practice for Executive Directors and how the underlying
principles and structure align to the wider employee workforce. A further session was held in early 2023 to discuss the proposed
changes to the Policy and take account of the views of the Workforce Engagement Panel before finalising the proposals.
Corporate Governance Code and FCA regulations
The Committee regularly monitors how remuneration policy and practice meet the requirements of the Corporate
Governance Code, and the relevant FCA Remuneration Codes that apply to regulated subsidiaries within the Group.
In reviewing the Policy, the Committee was mindful of Provision 40 of the Corporate Governance Code and considers that
our remuneration Policy addresses the following factors:
Factors Approach to remuneration Policy
Clarity
Our Remuneration Policy and its operation and alignment with our strategic objectives are disclosed
in the Directors’ Remuneration Report, which provides stakeholders with clarity on the link between the
achievement of SJP’s strategy and how Executives Directors are rewarded. Clarity on remuneration is also
provided to employees via our Workforce Engagement Panel, which provides the opportunity for panel
members to engage on remuneration-related topics including the proposed changes to the Policy.
Simplicity
The structure of the package for Executive Directors is simple to understand and provides transparent
performance criteria and payment scales for variable pay plus appropriate scope for the use of
judgement and discretion by the Committee. In recent years we have adjusted the performance
measures for variable elements so that they are more clearly aligned with stakeholder expectations
and experience. This has involved selecting measures that are better understood by stakeholders
as well as ensuring we explain the alignment better in the Policy and the Report.
Risk
The Executive Directors’ package is sensitive to risk and is aligned with our strategic objectives and the
interests of our shareholders and other stakeholders. The Policy is assessed to ensure it aligns with the
Group’s risk appetite and regulatory requirements, and that it does not encourage undue risk-taking.
Assurance of this is sought from the Chief Risk Officer.
Predictability
Our Policy clearly discloses the maximum opportunity for each element of the Policy. The actual
outcomes will depend on the performance achieved against the specific performance metrics.
The assessment of the overall outcome for each of the strategic objectives attaching to the annual
bonus has this year been enhanced to make clear the extent to which each objective had been
completed. The weighting of the financial performance element of the annual bonus has also
increased this year and the strategic objective element has been reduced.
Proportionality
The proposed metrics and maximum award levels in the annual bonus and PSP help to ensure that
variable pay for Executive Directors is proportionate to the performance delivered for stakeholders
and there is alignment between the outcomes and the achievement of SJP’s strategy. Stretching
performance conditions and the discretion available to the Committee ensure that poor performance
is not rewarded.
Alignment to
culture
The Policy reflects SJP’s culture of rewarding performance, being a responsible business, and taking
account of the needs of all stakeholders. This is particularly relevant for the strategic objectives relating
to the annual bonus as it includes elements specifically aligning with cultural indicators.
Total Shareholder Return
The Company has sustained outstanding levels of return to shareholders. The sum of £100 invested in SJP a decade ago
was worth £366 at the end of 2022, which is three times the rate of return for the FTSE All-Share Index.
Conclusion
Remuneration outcomes for 2022 reflect the strong performance during the year. The proposed Policy amendments
build on what has proved to be a successful remuneration strategy over many years. The changes are also balanced
and proportionate. I thank shareholders who assisted the Committee in the consultation process, and very much welcome
their constructive feedback and support for the proposals.
I encourage you to vote both for the Directors’ Remuneration Report for 2022, and for the Directors’ Remuneration Policy
for the 2023-25 period.
Roger Yates
On behalf of the Group Remuneration Committee
27 February 2023
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Governance
Section 2
Remuneration at a glance and annual report on remuneration
Summary of Executive Directors’ remuneration for the year
How were our Executive Directors rewarded?
Single figure remuneration for the year
The following tables provide a summary of single total figure of remuneration for 2022 and 2021 for the
Executive Directors.
Andrew Croft, Chief Executive
£’000
2021
Fixed Variable
2022
731
2,361
3,115
2,410
3,141
754
2022 2021
Base salary 587,161 568,218
Benefits 49,705 49,145
Pension 117,432 113,644
Other 176 2,863
Annual bonus
(cash)
2
339,379 411,958
Annual bonus
(deferred)
2
339,379 411,958
Total 1,433,232 1,557,786
PSP vested
1
1,682,174 1,583,637
Craig Gentle, Chief Financial Officer
£’000
Fixed Variable
532
1,707
2,255
1,744
2,276
549
2021
2022
2022 2021
Base salary 424,561 410,865
Benefits 39,397 38,987
Pension 84,912 82,173
Other – 2,875
Annual bonus
(cash)
2
245,396 297,877
Annual bonus
(deferred)
2
245,396 297,877
Total 1,039,662 1,130,654
PSP vested
1
1,216,326 1,145,076
Ian Gascoigne
,
3
Managing Director
£’000
Fixed Variable
604
1,338
1,497
1,741
2,345
159
2021
2022
2022 2021
Base salary 104,086 410,865
Benefits 33,657 110,743
Pension 20,817 82,173
Other 2,244 177
Annual bonus
(cash)
2
60,162 297,877
Annual bonus
(deferred)
2
60,162 297,877
Total 281,128 1,199,712
PSP vested
1
1,216,326 1,145,076
1 The value of the PSP vested corresponds to the long-term incentives in the Total remuneration table on page 149.
2 The annual bonus awards are in respect of performance during the years ending 2021 and 2022 respectively.
3 Ian Gascoigne retired as Managing Director and from the Board on 31 March 2022 and received salary, benefits and pension allowance
to this date.
Linking remuneration to achievement of key business goals
Weighting
(maximum potential
percentage points
per item)
Outturn
(actual points
earned)
Percentage of
base salary
earned
1
Annual bonus for 2022
(max 150% of base salary)
Underlying cash result 10% 2.4 3.6%
Net Funds Under Management flows 20% 20.0 30.0%
Annual growth in controllable expenses 20% 20.0 30.0%
Strategic and operational KPIs 50% 34.7 52.0%
Total bonus opportunity 100% 77.1 115.6%
PSP (2020 award)
(max 200% of base salary
1
)
Relative TSR 33.3% 30.0 60.0%
Average annual adjusted EPS growth
in excess of RPI
2
66.6% 56.4 112.7%
Total PSP opportunity 100% 86.4 172.7%
1 Base salary for PSP is the base salary at the time of grant. The value of the PSP vesting is also dependent on the amount of share price
movement between grant and vesting.
2 The EPS performance condition is calculated by reference to the post-tax EEV operating profit (on a fully diluted per share basis).
This measure excludes the direct impact of the stock market fluctuations and changes in economic assumptions on the final
year’s performance.
1
2
3
4
5
Remuneration
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Annual report on remuneration
This Directors’ Remuneration Report, excluding the Directors’ Remuneration Policy, will be put to an advisory shareholder
vote at the 2023 AGM. This part of the Remuneration Report explains the work of the Remuneration Committee and sets
out how we implemented our Policy during 2022. The information on pages 148 to 165 has been audited where indicated.
This part also sets out how we intend to implement the proposed Directors’ Remuneration Policy in 2023. The Policy itself
will be put to a shareholder vote at the AGM on 18 May 2023 and is set out in full on pages 166 to 174.
2.1 How the Remuneration Policy was applied in 2022
2.1.1 Remuneration payable in respect of performance in 2022 (audited)
Summary of total remuneration
The remuneration received by Executive Directors in respect of the years ended 31 December 2022 and 2021 is set out below.
Executive
Director
Base salary Benefits
Annual
bonus
Long-term
incentives Pension Other Total
Total fixed
remuneration
Total variable
remuneration
£ £ £ £ £ £ £ £ £
Andrew Croft 2022 587,161 49,705 678,758 1,682,174 117,432 176 3,115,406 754,298 2,361,108
2021 568,218 49,145 823,916 1,583,637 113,644 2,863 3,141,423 731,007 2,410,416
Craig Gentle 2022 424,561 39,397 490,792 1,216,326 84,912 – 2,255,988 548,870 1,707,118
2021 410,865 38,987 595,754 1,145,076 82,173 2,875 2,275,730 532,025 1,743,705
Ian Gascoigne 2022 104,086 33,657 120,324 1,216,326 20,817 2,244 1,497,454 158,560 1,338,894
2021 410,865 110,743 595,754 1,145,076 82,173 177 2,344,788 603,781 1,741,007
The remuneration received by Non-executive Directors in respect of the years ended 31 December 2022 and 2021 is set
out below.
Non-executive
Director
Fees Benefits Total
£ £ £
Dominic Burke 2022 21,208 – 21,208
2021 – – –
Emma Griffin 2022 124,125 6,584 130,709
2021 104,650 1,942 106,592
Rosemary Hilary 2022 154,021 – 154,021
2021 127,725 287 128,012
John Hitchins 2022 122,042 – 122,042
2021 14,108 – 14,108
Simon Jeffreys 2022 181,537 1,699 183,236
2021 114,392 1,217 115,609
Paul Manduca 2022 375,000 4,784 379,784
2021 305,948 179 306,127
Lesley-Ann Nash 2022 111,000 85 111,085
2021 84,650 1,571 86,221
Roger Yates 2022 167,042 534 167,576
2021 113,937 311 114,248
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Remuneration
2.1.1 Remuneration payable in respect of performance in 2022 (audited) continued
Summary of total remuneration continued
Benefits
Benefits for the Executive Directors comprise a
company car or cash equivalent, fuel, private
healthcare, life and critical illness cover,
permanent health insurance, health screening
and travel costs. For Ian Gascoigne, they also
included a housing allowance to facilitate
working across multiple locations (2022:
£18,000). The amounts shown are generally
the taxable amounts.
Benefits for Non-executive Directors are for
the reimbursement of taxable travel expenses
grossed up for any tax payable thereon. Paul
Manduca received private healthcare benefit
of £3,551 during 2022. Simon Jeffreys and Roger
Yates received health screening of £534 each
during 2022. Non-executive Directors are not
paid a pension and do not participate in any
of the Company’s variable incentive schemes.
Pension allowance
Pension contributions, being 20% of base
salary, were capped by legislation and so a
non-pensionable allowance was paid to the
Executive Directors in full for Andrew Croft and
Ian Gascoigne (until he retired as an Executive
Director on 31 March 2022), and for the balance
for Craig Gentle, who had a £4,000 contribution
to the money purchase Group pension
scheme. Consistent with the pension
contributions provided to the wider workforce,
all Executive Directors appointed after the 2018
AGM receive a pension allowance of 10% of
salary on joining, increasing to 12.5% after five
years and 15% after ten years of service. The
pension contributions for Executive Directors
appointed prior to the 2018 AGM were reduced
to 15% of base salary on 1 January 2023. None
of the Executive Directors participate in
defined benefit pension schemes.
Annual bonus
As explained on page 169, half of the annual
bonus is paid in cash, and the other half in the
form of a conditional award of the Company’s
shares. Release of the shares is subject to the
participant’s continued employment
throughout the restricted period. Deferred
shares are subject to forfeiture for three years
under the terms of the Deferred Bonus
Scheme.
Long-term incentives
The value of the long-term incentives is the
value of shares for the award where the
performance period ends in the year, together
with the value of dividend equivalents that
have been added in the form of shares, during
the three-year performance period. The gross
value of those dividend equivalent shares is
based on the three-month average share
price to 31 December 2022 of £10.93 (being
£176,660 for Andrew Croft, £127,729 for Craig
Gentle and £127,729 for Ian Gascoigne). The
long-term incentive figures for 2022 have been
calculated using the average of the
Company’s share price in the three-month
period to 31 December 2022, being £10.93, as
the actual vesting date of the PSP award is on
25 March 2023. The figures for 2021 have been
updated from the three-month average
figures used in last year’s report (being
£1,702,967 for Andrew Croft, £1,231,359 for Craig
Gentle and £1,231,359 for Ian Gascoigne) to the
Company’s share price on the date of vesting
on 25 March 2022, being £14.47.
The LTIP figure for 2022 in the table on the
previous page includes the following: £524,019
for Andrew Croft; £378,904 for Craig Gentle and
£378,904 for Ian Gascoigne, which are
attributable to the movement in the share
price between the grant date and the end of
the performance period. This amounts to 31.15%
of the vesting amount shown in the table.
The LTIP figure for 2021 in the table on the
previous page includes the following:
£456,664 for Andrew Croft, £330,199 for Craig
Gentle and £330,199 for Ian Gascoigne, which
are attributable to the movement in the share
price between the grant date and the date
of vesting the end of the performance period.
This amounts to 28.84% of the vesting amount
shown in the table for Andrew Croft, Ian
Gascoigne and Craig Gentle. These awards
are subject to a two-year post-vesting
holding period.
Other
These amounts relate to income received from
the Share Incentive Plan and the Save As You
Earn scheme. For the Share Incentive Plan the
value relates to the Matching shares (one
Matching share is awarded for every ten
Partnership shares purchased) received. For
Andrew Croft, 12 Matching shares were
awarded on 25 March 2022 at £14.63.
Employees making contributions to the Save
As You Earn receive a 20% discount on shares
under option. Ian Gascoigne started a savings
contract in March 2022 with a discount of
£2.77 per share for 810 shares under option.
Subsidiary board fees
Rosemary Hilary received £36,458 for chairing
St. James’s Place UK plc until 6 June 2022 and
Emma Griffin received £28,125 for chairing
St. James’s Place Unit Trust Group Limited
in 2022. Simon Jeffreys received €31,250 for
chairing St. James’s Place International plc
in 2022. Dominic Burke, John Hitchins and
Roger Yates were appointed as Non-executive
Directors of St. James’s Place UK plc during
2022 and received the following fees for the
part of the year that they served: £5,208 for
Dominic Burke; £26,042 for John Hitchins and
£26,042 for Roger Yates.
Payments to past Directors
As detailed in last years’ Report, Ian
Gascoigne, who retired from the Board on
31 March 2022, retained his 2020 PSP Award
in full as he continued as an employee after
leaving the Board. The award of 115,249 shares
will vest on 25 March 2023.
Payments for loss of office
No payments were made to past Directors
for loss of office during the year ended
31 December 2022.
Report of the Group Remuneration Committee continued
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2.1.2 Summary of total annual bonus for 2022 performance (audited)
Financial objectives
The performance conditions and weightings which applied to the annual bonus and the resulting payout were as follows:
Measure
Weighting
(percentage of
salary)
Weighting
(percentage of
maximum)
Threshold (20%
payable)
Maximum
value (100%
payable) Actual
Payout
(percentage of
salary)
Payout
(percentage of
maximum total
bonus)
Underlying cash result 15% 10% £405m £505m £410.1m 3.6% 2.4%
Net funds under
management flows 30% 20% £7.42bn £9.24bn £9.8bn 30.0% 20.0%
Annual growth in
controllable expenses 30% 20% £349.9m £344.0m £343.0 30.0% 20.0%
Strategic 75% 50% Assessment by the Committee of the
performance of the Executive Directors
52.0% 34.7%
Total payout 115.6% 77.1%
Annual bonus strategic targets performance assessment
As described in other parts of the Annual Report and Accounts, the Company delivered strong performance in 2022 for
each of our key stakeholders: clients, advisers, employees, shareholders and society. The Committee considered these
groups when setting the strategic targets for 2022, together with other objectives set out in the 2022 business plan.
In serving our clients well, developing our employees and advisers for the future and striving to improve the effectiveness
of our organisation, the Company will be well placed to meet our long-term business objectives, and create additional
value for our shareholders. The Company also focuses on the importance of safe and sustainable growth through
prudent management of risk and the highest standards of regulatory compliance, maintaining constructive relationships
with regulators.
The Committee set the Executive Directors a range of business priorities which align to the six business priorities
underpinning our annual business plan. Each category is equally weighted and is made up of a number of objectives.
Underlying performance against each of the priorities was monitored against quantitative and qualitative measures to
help support the Committee’s determination of the overall success against objectives and we have included details of the
measures and outcomes for the objectives below. When assessing the overall outcome for each priority, the Committee
has this year included a score to show to what extent each priority had been completed. In order to determine an overall
outcome the Committee has aggregated the scores for each of the six priorities and has also taken into account any
other relevant achievements attained during the year.
The Committee recognised that a high proportion of the business priorities had been achieved and that good progress
had been made in meeting or exceeding the major business plan objectives. The category entitled ‘Our culture and being
a leading responsible business’ is made up entirely of ESG targets. In addition, other factors throughout the objectives also
recognise our aim to be a leading responsible business.
Business priority (scorecard
weighting – total 75%) Measure/target Outcome Score
Building community (12.5%) Slightly behind
Net manpower growth
Growth of adviser base in line with plan 3% growth achieved
Employee learning
and development
Achieve strong rates of employees
adopting online tools for their learning
and development
New online learning and development tool
implemented with the Academy. Marginal
delay with the implementation to the
Partnership and employees
Partner sentiment
Achieve strong overall scores based
on a basket of criteria in Partner
engagement surveys
Enhanced engagement and tracking
of sentiment achieved. Partner
development events were well
received. Further strengthening
of Partner relationship ongoing
Employee engagement
Achieve strong employee engagement
scores based on employee survey results
Engagement score of 83% achieved,
close to stretch goal
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Business priority (scorecard
weighting – total 75%) Measure/target Outcome Score
Being easier to do business with (12.5%)
On track
Administration
performance
% of KPIs used to track the performance of our
administrators showing a positive outcome
Target exceeded. Achieved 90% over the
whole year
Salesforce adoption
Embed use of Salesforce into Group functions Embedded into Group functions. Work
on realising full benefits to be completed
Digital client proposition
Launch a new digital client application Achieved
Client adoption of
digital literature
Increase the use of digital communications
by clients
Exceeded target
Operational efficiency
Delivery of efficiency gains through
automation in line with plan
Outperformed target as at December 2022.
Delivering value to advisers and clients through our investment proposition (12.5%)
Slightly behind
Value Assessment Ratings
Aggregate relative performance of funds
in Value Assessment Statement
Some progress achieved
Delivery of fund changes
Successful delivery of planned fund changes Achieved in line with plan
Operational excellence
Delivery of programme in line with plan Programme delivered broadly in line
with plan
Responsible Investment
Reduce carbon footprint of investment
proposition in line with plan
Exceeded target
Building and protecting our brand and reputation (12.5%)
On track
Client sentiment
Maintain client sentiment toward SJP Positive client sentiment. Overall
satisfaction level of 87%
Brand
Implement new brand in line with plan New brand was launched in 2022 and
positively received. Strong media
sentiment score: 97% average
Digital marketing
Launch of Salesforce digital marketing solution Launch achieved
Value of advice
Develop clear value of advice
communications and engagement tools
Achieved in line with plan
Cyber security
Increase % of Partner practice which use
DaaS or who are CE+ accredited
Strong progress achieved
Client complaints
Achieve low levels of complaints, relative to
volume of clients
Low ratio of complaints relative
to volume of clients
Internal audit,
risk and regulation
Based on broadening/deepening regulatory
relationships, no regulatory sanctions and
internal audit/compliance reports
There were no significant control failings
or weaknesses identified in the year that
remain unmitigated, and no regulatory
sanctions. See Report of the Group
Audit Committee on pages 130-131
for more information.
Our culture and being a leading responsible business (ESG) (12.5%)
Ahead
Responsible
business strategy
Embed our culture vision effectively across
larger bases of Partners and employees
Achieved in line with plan
Net zero commitments
Executive approval of Responsible
Business KPIs
Achieved in line with plan and endorsed by
the Board
Community impact
Support St. James’s Place Charitable
Foundation to raise £9 million
Goal exceeded. £10.48m raised during 2022
Inclusion and diversity
Increase representation of female (goal 28%)
and minority ethnic employees (goal 8%) in
senior roles
Achieved 28% for females in senior roles.
Further work ongoing on representation
of minority ethnic employees
Continued financial strength (12.5%)
On track
Partner lending
Optimise external lending facilities for Partner
business loans
Achieved. New loan securitisation
completed
Capital usage
Group capital managed within risk appetite Achieved
Regulator relationship
Maintain constructive relationship with PRA
and FCA
Constructive relationship maintained.
Work on the implementation of
Consumer Duty is ongoing
Report of the Group Remuneration Committee continued
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2.1.3 Long-term incentive awards (audited)
Vesting of Performance Share Plan (PSP) awards
On 31 December 2022, the awards made on 25 March 2020 under the PSP reached the end of their three-year performance
period. These will vest on 25 March 2023, being the third anniversary of the date of grant. The vested shares for Executive
Directors are subject to a two-year post-vesting holding period (other than to sell shares to settle tax on vesting or
exercise). The performance conditions which applied to the 2020 PSP awards, and the actual performance achieved
against these conditions, are set out in the tables below:
Performance hurdle
TSR relative to the FTSE 51 to 150
1
Average annual adjusted EPS
growth in excess of RPI
2
Performance required
Percentage of
one third of
award vesting
Performance
required
Percentage of
two thirds of
award vesting
Below threshold Below median 0% Below 5% 0%
Threshold Median 25% At least 5% 25%
Stretch or above Upper quartile or above 100% 16% or above 100%
Actual achieved 24 out of 83 companies 90.1% 13.7% 84.5%
1 FTSE 51-150 index excluding investment trusts and companies in the FTSE oil, gas and mining sectors.
2 The EPS performance condition is calculated by reference to the post-tax EEV operating profit (on a fully diluted per-share basis). This measure
excludes the direct impact of stock market fluctuations and changes in economic assumptions on the final year’s performance.
3 Straight-line vesting occurs between threshold and maximum vesting.
4 Awards are subject to a three-year performance period. Vested shares cannot normally be sold for a further two years other than to the extent
necessary to settle tax on vesting or exercise.
5 Malus and clawback provisions apply.
6 No discretion was exercised by the Committee to override the outcome referred to above.
Therefore, the total percentage of the 2020 PSP awards vesting was 86.37%, which resulted in the following awards to the
Executive Directors:
Director
Total number
of shares
granted
Percentage of
awards vesting
Number of
shares vesting
including
dividend
equivalent
shares
1
Value of
shares vesting
(£)
2
Andrew Croft 159,387 86.37% 153,810 1,682,174
Craig Gentle 115,249 86.37% 111,215 1,216,326
Ian Gascoigne 115,249 86.37% 111,215 1,216,326
1 Andrew Croft accrued 16,153 dividend equivalent shares and Craig Gentle and Ian Gascoigne accrued 11,679 dividend equivalent shares.
2 As these awards will not actually vest until 25 March 2023, a deemed share price is used to calculate the value of shares vesting for the purposes of
this Report. This is taken as the three-month average to 31 December 2022, being £10.93.
Granting of PSP awards in 2022
Details of PSP awards (nil-cost options) granted to the Executive Directors in 2022 are set out in the table below:
Director Type of award Basis of award granted
Average share
price at date of
grant
Number of SJP
shares over
which award
was granted
1
Face value
of award
(£’000)
Percentage of
face value that
would vest at
threshold
performance
Andrew Croft Nil-cost option 250% of salary of £590,947 £14.64 100,947 1,478 25%
Craig Gentle Nil-cost option 250% of salary of £427,300 £14.64 72,992 1,069 25%
1 The number of shares awarded was calculated based on the average share price over a period of three days prior to the date of grant on 25 March
2022, being £14.64 per share. The face value of the award figure is calculated by multiplying the number of shares awarded by the average share
price figure of £14.64.
2 PSP awards are structured as nil-cost options and therefore no exercise price is payable on exercise. Dividend equivalents accrue to the Executive
Directors between the date of grant and exercise of the award (up to a maximum of six years from date of grant) but are released only to the extent
that awards vest. Awards in 2022 were based on the achievement of two metrics: (a) TSR performance relative to a composite benchmark of the
FTSE 51 to 150, excluding investment trusts and companies in the oil, gas and mining sectors for one third of the award. For the TSR performance
metric element, 25% vests at median, with straight-line relationship to 100% vesting for upper quartile performance; and (b) average annual
adjusted earnings (EPS) per share growth target, based on EEV, in excess of CPI, with the scale starting at CPI+5% and extending to CPI+12%
calculated by reference to the post-tax EEV operating profit (on a fully diluted per share basis) for two thirds of the award. For the EPS performance
metric element a threshold and stretch level of performance is set. At threshold, 25% of the relevant element vests, rising on a straight-line basis to
100% for attainment of levels of performance between threshold and maximum targets. These awards also have a post-vesting holding period of
two years from the vesting date.
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2.1.4 Share awards (audited)
The tables below set out details of share awards that have been granted to individuals who were Executive Directors
during 2022 and which had yet to vest or be exercised at some point during the year. The performance periods for all share
awards run for a period of three years, ending on 31 December of the year immediately preceding the vesting date.
Performance Share Plan awards outstanding
Director Date of grant
Market price at
grant
Shares
originally
awarded Face value (£)
1
Shares vested Vesting date
Remaining
unexercised at
31 December
2022
Andrew Croft 25 March 2019 £9.92 107,537 1,066,767 100,454 25 March 2022 100,454
25 March 2020 £7.13 159,387 1,136,429 – 25 March 2023 159,387
25 March 2021
25 March 2022
£12.67
£14.64
89,695
100,947
1,136,436
1,477,359
–
–
25 March 2024
25 March 2025
89,695
100,947
Craig Gentle 25 March 2019 £9.92 77,757 771,349 72,635 25 March 2022 72,635
25 March 2020 £7.13 115,249 821,725 – 25 March 2023 115,249
25 March 2021 £12.67 64,856 821,726 – 25 March 2024 64,856
25 March 2022 £14.64 72,992 1,068,238 – 25 March 2025 72,992
Ian Gascoigne 27 March 2017 £10.57 71,405 754,751 44,912 27 March 2020 44,912
25 March 2019 £9.92 77,757 771,349 72,635 25 March 2022 72,635
25 March 2020 £7.13 115,249 821,725 – 25 March 2023 115,249
25 March 2021 £12.67 64,856 821,726 – 25 March 2024 64,856
1 The face value of the award is calculated by multiplying the number of shares awarded by the market price at grant (the average share price figure
over a period of three days prior to the date of grant).
Deferred Bonus Scheme – shares held during 2022
The table below sets out details of the awards held by the Executive Directors under the deferred element of the annual
bonus scheme during 2022:
Director
Balance at
1 January
2022
Released in
year
1
Awarded in
year
2
Balance at
31 December
2022
3
Vesting date
Andrew Croft 24,806 24,806 – – 25 March 2022
15,346 – – 15,346 25 March 2023
– – 31,934 31,934 25 March 2025
Craig Gentle 17,936 17,936 – – 25 March 2022
11,096 – – 11,096 25 March 2023
– – 23,091 23,091 25 March 2025
Ian Gascoigne 17,936 17,936 – – 25 March 2022
11,096 – – 11,096 25 March 2023
– – 23,091 23,091 25 March 2025
1 These deferred share awards were awarded on 25 March 2019 and were equal in value to 50% of the Directors’ 2018 total annual bonus.
2 Bonuses were not paid to any employees for 2020 and therefore no deferred share awards were awarded.
3 Outstanding awards at the year-end relate to deferred shares awarded in 2020 and 2022 which were earned in 2019 and 2021 respectively.
The share price used to calculate the 2020 award was £10.11 and for the 2022 award was £12.90.
Further details of the deferred element of the annual bonus scheme are set out on page 169. Dividends accrue to the
Executive Directors during the three-year period while the shares are subject to forfeiture, and details of these dividends
are set out on page 169.
Report of the Group Remuneration Committee continued
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Governance
Save As You Earn (SAYE) share option scheme – shares held during 2022
Details of the options held by the Directors in 2022 under the SAYE scheme and any movements during the year are as follows:
Director
Options held at
1 January
2022
Granted
in year
Lapsed
in year
Exercised
in year
Options held at
31 December
2022
Exercise
price Dates from which exercisable
Andrew Croft 1,148 – – – 1,148 £9.40 01 May 2024 to
31 October 2024
Craig Gentle 843 – – – 843 £12.81 01 November 2024 to
30 April 2025
Ian Gascoigne 1,167 – – 1,167 – £7.71 01 May 2022 to
31 October 2022
221 – – – 221 £8.13 01 May 2023 to
31 October 2023
– 810 – – 810 £11.11 01 May 2025 to
31 October 2025
At 31 December 2022 the mid-market price for the Company’s shares was £10.95. The range of prices between 1 January
2022 and 31 December 2022 was between £9.20 and £17.32.
Share Incentive Plan – shares held during 2022
The table below sets out details of the awards held by the Directors under the Share Incentive Plan during 2022:
Director
Balance at
1 January
2022
Partnership
shares
allocated in
year
1
Matching
shares
allocated in
year
2
Dividend
shares
allocated in
year
3
Balance at
31 December
2022 Holding period (matching shares)
Andrew Croft 188 – – – 188 24 March 2017 to 24 March 2020
181 – – – 181 29 March 2018 to 29 March 2021
192 – – – 192 25 March 2019 to 25 March 2022
277 – – – 277 25 March 2020 to 25 March 2023
156 – – – 156 25 March 2021 to 25 March 2024
– 122 12 – 134 25 March 2022 to 25 March 2025
Craig Gentle 188 – – – 188 24 March 2017 to 24 March 2020
192 – – – 192 25 March 2019 to 25 March 2022
156 – – – 156 25 March 2021 to 25 March 2024
Ian Gascoigne 502 – – – 502 28 March 2011 to 28 March 2014
210 – – – 210 26 March 2014 to 26 March 2017
167 – – – 167 26 March 2015 to 26 March 2018
174 – – – 174 24 March 2016 to 24 March 2019
188 – – – 188 24 March 2017 to 24 March 2020
181 – – – 181 29 March 2018 to 29 March 2021
192 – – – 192 25 March 2019 to 25 March 2022
277 – – – 277 25 March 2020 to 25 March 2023
156 – – – 156 25 March 2021 to 25 March 2024
1 Partnership shares are shares awarded in return for an investment of between £10 and £1,800. Partnership shares were purchased on behalf
of Andrew Croft on 25 March 2022 at a price of £14.63 per share, in return for £1,800 being deducted from pre-tax salary.
2 For every ten Partnership shares acquired, the Company awards one matching share. Matching shares were also awarded on 25 March 2022
in relation to the Partnership shares mentioned above.
3 The Partnership, dividend and matching shares will be held by an employee benefit trust on behalf of the Director. The matching and dividend
shares must be held for a minimum period of three years from the date of the award.
Between 1 January 2023 and 27 February 2023 there were no exercises or other dealings in the Company’s share awards
by the Directors.
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2.1.5 Shareholding requirements and Directors’ share interests (audited)
Shareholding requirements
As from 2018, the Executive Directors were required to build up a shareholding equivalent to 200% of salary in Company
shares. As from 2020, the Chief Executive was required to build up a shareholding equivalent to 300% of salary in the
Company shares. All of the Executive Directors have already exceeded the shareholding requirements (as shown in the
table below). Whilst our Policy aims to broadly align with market expectations, in practice the longest-serving Executive
Directors continue to maintain shareholdings that exceed the stated policy. This demonstrates their commitment to the
long-term success of the Company and to upholding the values that underpin our culture (see page 8 for further details
on our values).
Director
Shares held at
1 January
2022
Shares held at
31 December
2022
Percentage of
base salary
held in SJP
shares as at
31 December
2022
1
Andrew Croft 725,133 732,395 1316%
Craig Gentle 81,998 96,631 206%
Dominic Burke – –
Emma Griffin 2,070 2,164
Rosemary Hilary – –
John Hitchins – –
Simon Jeffreys 18,364 18,364
Paul Manduca 10,000 17,000
Lesley-Ann Nash – –
Roger Yates 50,000
50,000
1 Calculated using the mid-market price at 31 December 2022 of £10.95 and the base salary as at 31 December 2022. The overall percentage of base
salary excludes the shares that would need to be sold to meet the notional tax and employee National Insurance contributions on bonus share
awards that remained in their periods of deferral.
2 The interests of the Executive Directors set out above include Deferred Bonus Scheme (DBS) awards held in trust for the Directors which are subject
to a three-year continuous service requirement, details of which are set out on page 169. The interests of the Executive Directors also include
awards under the Share Incentive Plan, details of which are set out on page 168.
3 The Company’s register of Directors’ interests contains full details of Directors’ shareholdings and any share awards under the Company’s various
share schemes.
4 Disclosure of the Directors’ interests in share awards is given on pages 154 and 155 and also in Note 25 – Related Party Transactions.
5 Ian Gascoigne retired (see page 115) from the Board on 31 March 2022 and held 490,856 shares as at that date (31 December 2021: 452,360). He is
subject to a post-cessation shareholding requirement which requires him to hold all of these shares up to the first anniversary of his departure date
and then 50% of them up until the second anniversary of his departure date.
Between 1 January 2023 and 27 February 2023 there were no transactions in the Company’s shares by the Directors.
Report of the Group Remuneration Committee continued
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Governance
Executive Directors’ shareholdings and outstanding share awards
Executive Director
Beneficially
owned at
31 December
2022
1
Outstanding PSP
awards
(performance
conditions)
2
SAYE options
(no performance
conditions)
3
Outstanding DBS
awards
(no performance
conditions)
4
SIP shares
(no performance
conditions)
5
Andrew Croft 732,395 450,483 1,148 47,280 1,128
Craig Gentle 96,631 325,732 843 34,187 536
Ian Gascoigne
6
452,360 297,652 1,031 34,187 2,047
1 Beneficially owned shares include those DBS awards and SIP shares set out in columns 5 and 6 above.
2 Details of the PSP awards (including options that are unvested and those that are vested but have not been exercised) are set out on page 154.
3 Details of the SAYE options (including options that are vested but have not been exercised) are set out on page 155.
4 Details of DBS awards are set out on page 154.
5 Details of the SIP shares are set out on page 155.
6 Ian Gascoigne’s shareholdings and outstanding share awards are as at the date he retired as a Director (31 March 2022).
2.1.6 Dilution (unaudited)
Dilution limits agreed by shareholders at the time of shareholder approval of the various long-term incentive schemes
allow for up to 10% of share capital in ten years to be used for grants to employees and members of the St. James’s Place
Partnership under all share schemes (i.e. both the employee and Partner share schemes), and up to 5% of share capital in
ten years to be used for grants to employees under discretionary schemes. These limits comply with the Investment
Association dilution guidelines on the issue of new shares.
The table below sets out, as at 31 December 2022, the number of new ordinary shares in the Company which have been
issued, or are capable of being issued (subject to the satisfaction of any applicable performance conditions), as a result
of options or awards granted under the various long-term incentive schemes operated by the Company in the ten years
prior to 31 December 2022.
Share scheme
Number of new
ordinary
shares of
15 pence each
Percentage of
total issued
share capital
as at
31 December
2022
SAYE schemes 3,582,204 0.66%
Executive share schemes 13,622,645 2.5%
Partners’ share schemes 11,511,762 2.12%
Total 28,716,611 5.28%
In addition, as at 31 December 2022, the Group’s Employee Share Trust held 1,740,251 shares in the Company which were
acquired to meet awards made under the PSP, Deferred Bonus Scheme and Restricted Share Plan. The number of shares
in the Company held in the Share Incentive Plan Trust as at 31 December 2022 was 470,005.
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2.1.7 Total shareholder return performance and CEO pay over the same period (unaudited)
The graph below shows a comparison of the Company’s TSR performance against the FTSE All-Share Index over the last
ten financial years. The Company considers this to be the most appropriate comparative index, given the broad nature of
the index and the companies within it.
This graph shows the value, by 31 December 2022, of £100 invested in St. James’s Place on 31 December 2012, compared
with the value of £100 invested in the FTSE All-Share Index on the same date. The other points plotted are the values at
intervening financial year-ends.
31/12/12 31/12/2231/12/2131/12/2031/12/1931/12/1831/12/1731/12/1631/12/1531/12/14
800
700
600
500
400
300
200
100
0
31/12/13
Value (£) (rebased)
St. James’s Place
FTSE All Share
The table below shows the total remuneration figure for the Chief Executive over the last ten financial years. The total
remuneration figure includes the annual bonus and long-term incentive awards which vested based on performance
in those years (and ending in that year for PSP scheme awards).
Year ending 31 December Year ending 31 December
David Bellamy Andrew Croft
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total
remuneration (£) 3,362,651 3,646,514 3,115,230 2,631,667 2,458,020 1,886,774 1,421,729 812,678 3,141,423 3,115,406
Annual bonus
(% of maximum) 98% 95% 93.3% 96.67% 96.67% 62% 37.5% 0% 96.7% 77.1%
LTIP vesting
(% of maximum) 95% 96% 100% 100% 87.94% 85.3% 62.9% 9% 93.4% 86.4%
The deemed value of the PSP award in the table above for 2022 is £1,682,174. This value reflects an increase of £3.80 or 53.4% in the St. James’s Place
share price over the vesting period (the share price of the PSP award on the date of grant was £7.13 and the deemed share price on the date of vesting
was £10.93, calculated as set out in the following note).
As the actual vesting date for the PSP (performance period ending 31 December 2022) is not until 25 March 2023, a deemed value has been used.
This is the average of the Company’s share price in the three-month period to 31 December 2022, being £10.93. The 2021 figure for total remuneration
has been updated by substituting the three-month average figure used to calculate the value of long-term incentive awards in last year’s Report by
a revised figure based on the Company’s share price on the date of vesting on 25 March 2022, being £14.47.
Report of the Group Remuneration Committee continued
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2.1.8 Percentage change in remuneration of all Directors and employees (unaudited)
As the Company has no employees, the table below shows the percentage change in the salary/fee,
benefits and annual bonus for each Director against all UK employees of the Group over the last three years.
Remuneration element
Average
employee
(% change)
Executive Directors (% change)
A Croft C Gentle
Salary/fee
1
2022 7.4 3.3 3.3
2021 – 5.8 5.8
2020 5.0 (2.2) (2.2)
Benefits
2
2022 3.3 1.1 1.1
2021 5.6 1.7 1.6
2020 3.1 – (6.1)
Bonus 2022 9.5 (17.6) (17.6)
2021 – – –
2020 (100) (100) (100)
Remuneration element
Average
employee
(% change)
Non-executive Directors (% change)
3
D Burke
5
E Griffin
5
R Hilary
6
J Hitchins
5&7
S Jeffreys
5
P Manduca L-A Nash
5
R Yates
5
Salary/fee
1 & 4
2022 7.4 – 18.6 20.6 765.1 58.7 22.6 31.1 46.6
2021 – – 18.1 34.3 – 11.8 – 71.4 5.3
2020 5.0 – –
4
686.2 – 14.5 – – 13.5
Benefits
2
2022 3.3 – 239.0 (100) – 39.6 2,572.6 (94.6) 71.7
2021 5.6 – 62.9 (58.5) – (5.7) – – –
2020 3.1 – – – – (34.2) – – –
Bonus 2022 9.5 – – – – – – – –
2021 – – – – – – – – –
2020 (100) – – – – – – – –
1 The change in the salary for average employees is higher than the average salary increase of the workforce referred to in the Chair’s annual
statements in prior years due to salary increases in respect of promotions and role changes being taken into account.
2 See the Benefits note on page 150 for further details on the benefits for Directors.
3 The fees for Non-executive Directors for 2022 were split into a base fee and a separate committee membership fee. The total for these two elements
resulted in an increase of 1.6% for 2022.
4 The Directors in office at the time each agreed to a 20% reduction of base salaries/fees for May, June and July 2020. The reduction is reflected in the
changes for both 2020 and 2021.
5 Emma Griffin and Lesley-Ann Nash were appointed during 2020. Paul Manduca and John Hitchins were appointed in 2021 and Dominic Burke was
appointed in 2022. Additionally, John Hitchins, Simon Jeffreys and Roger Yates were appointed to the board of St. James’s Place UK plc during 2022.
6 The significant increase in Rosemary Hilary’s fee in 2020 was due to her having not served a full year in 2019. Rosemary Hilary was also appointed
as chair of the Group Risk Committee on 19 August 2020.
7 The significant increase in John Hitchins’ fee in 2022 was due to him having not served a full year in 2021.
2.1.9 Relative importance of spend on pay (unaudited)
The following table sets out the percentage change in profit, dividends and overall spend on pay in the year ending
31 December 2022, compared to the year ending 31 December 2021.
2022 2021
Percentage
change
£’Million £’Million
Executive Directors’ remuneration
1
5.4 5.4 -1%
IFRS profit after tax
2
405.4 287.6 +41%
EEV operating profit before tax
2
1,589.7 1,545.4 +3%
Dividends 287.1 281.3 +2%
Employee remuneration costs 254.2 262.9 -3%
1 Calculated on the same basis as the Single total figure of remuneration on page 148 for Executive Directors in office as at 31 December 2022.
2 IFRS profit after tax has been presented to enable comparison between different companies, as it is a measure defined by International Financial
Reporting Standards. EEV operating profit before tax is an alternative performance measure (for further details see the glossary of alternative
performance measures on page 273), which has been presented as it is the financial performance measure upon which bonuses are based.
Further information about these measures is set out in the financial review on pages 70 to 89.
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2.1.10 CEO pay ratio (unaudited)
Year Method
25th percentile
pay ratio
Median pay
ratio
75th percentile
pay ratio
2022 Option C 75:1 54:1 30:1
2021 Option C 93:1 60:1 33:1
2021 Option A 87:1 56:1 31:1
2020 Option A 25:1 16:1 10:1
2019 Option A 45:1 28:1 17:1
2018 Option C 62:1 42:1 21:1
CEO pay
25th percentile
pay
50th percentile
pay
75th percentile
pay
£ £ £ £
Salary 587,161 29,414 40,445 61,426
Total pay 3,117,452 41,622 57,324 102,845
For 2022, we have calculated the CEO pay ratio using Option C, as it allows us to use our existing gender pay gap
information supplemented with other pay data from our Group companies. We have changed from using Option A, as
Option C is less complex and better aligned with the way we hold our employee data for our Group companies. Through
testing we have found that Option C provides reliable results, similar to those that Option A would produce. We have also
recalculated the 2021 figures on the Option C basis to provide a like-for-like comparison with 2022.
To calculate the ratio in accordance with the regulations we ranked all our UK employees by their annualised full-time
equivalent salary as at 30 April 2022. From this we identified three employees at the 25th, 50th and 75th percentiles. We
then calculated the total remuneration figure for each of the three employees throughout 2022, in line with the same
reporting regulations that apply to our Executive Directors, which is then used to calculate the ratio to the Chief Executive’s
remuneration. We believe the three identified employees are representative of the 25th, 50th and 75th percentiles.
For 2022, the financial objective element of the annual bonus changed from an objective based on EEV operating profit, to
a scorecard of three financial metrics: Underlying Cash Result, Net Funds Under Management flows and Annual growth in
controllable expenses. The Net Funds Under Management flows and Annual growth in controllable expenses metrics were
met in full and the Underlying Cash Result was met in part. This is reflected in the lower CEO pay ratio than the previous
year when the financial objective element of the annual bonus was met in full.
The median ratio is consistent with our pay, reward and progression policies for employees which relate pay levels to
performance and market benchmarks. In 2022, 75.8% of the Chief Executive’s total remuneration was delivered through
variable pay schemes. These are directly linked to the Company’s performance as well as share price movements over the
longer-term. Whilst none of the three employees identified at the 25th, 50th and 75th percentiles are eligible to receive PSP
Awards, all three received an annual bonus within the year and are invited to participate in the SIP and SAYE scheme on the
same terms as the Chief Executive.
Report of the Group Remuneration Committee continued
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Governance
2.2. Remuneration Committee (unaudited)
2.2.1 Role, activities and performance of the Committee
The Committee’s primary purpose is to ensure that there is a clear link between reward and performance and that the
Policy structure and levels of remuneration for both Executive Directors and Material Risk Takers (identified in accordance
with relevant PRA and FCA requirements) are appropriate. In particular, the Committee reviews the list of those employees
who are considered to be Material Risk Takers and monitors compliance with the Group’s remuneration policies, as they
apply to that population. When determining the appropriateness of remuneration the Committee pays particular attention
to the remuneration paid to the wider workforce (in particular Director pay ratios and relative importance of spend) and
the overall competitiveness of packages when compared to peers. The key responsibilities of the Committee are set out
in its terms of reference, which can be found on the Company’s website www.sjp.co.uk.
The Committee’s key areas of activity during the year included:
Topic Summary of activity Find out more
Annual bonus
objectives and
new awards
The Committee considered and set the strategic objectives for 2022 and agreed
the bonus awards made for 2021.
See pages
151 to 152
PSP awards
and vestings
The Committee determined the grants and performance conditions for PSP
awards to be made to Directors, senior management and Material Risk Takers.
The Committee also considered whether there were any circumstances which
warranted the application of malus or clawback provisions, or the exercise of
discretion permitted under scheme rules.
See page 153
Assessing risk
The Committee assessed the alignment of the Group’s remuneration policies
with risk appetite and regulatory requirements, and sought assurance from the
Chief Risk Officer, and relevant management from across the business, that the
remuneration outcomes were in line with the policies, were appropriate, and did
not warrant discretionary changes.
Financial
services
regulation
The Group’s remuneration policies and practices are required to meet
regulatory requirements that apply to certain Group subsidiaries. In addition,
industry best practice drives the expectations of a range of stakeholders,
including our regulators. During the year, the Committee considered adherence
to existing requirements and the implications of the new Investment Firms
Prudential Regulations (IFPRs). The Committee has also considered the
approach to remuneration for individuals in control functions and is responsible
for setting the methodology for determining Material Risk Takers and for
agreeing the list of Material Risk Takers.
Remuneration
advisers
The Committee carried out an annual review of the Committee’s advisers,
Alvarez and Marsal (A&M), and confirmed that the Committee continued
to be satisfied with the support and advice provided and that there were
no circumstances existing which would compromise A&M’s independence.
See opposite
Regulatory
developments
and feedback
from investors
Regular updates were received from the Company Secretary and the
Committee’s remuneration advisers on regulatory developments, investor
guidelines and feedback from investor meetings. These were taken into
account by the Committee when determining remuneration outcomes
and the application of the Policy for 2023.
Remuneration
policy
The Committee sets the remuneration for the Company’s Chair, Executive
Directors, Executive Board members and Material Risk Takers and has reviewed
the Directors’ Remuneration Policy and consulted with stakeholders, including
investors and employees. The Committee also reviewed the Employee
Remuneration Policy.
Governance
and other
matters
The Committee reviewed the gender pay gap reporting, its own terms
of reference and the Chair’s fee, and carried out an annual review of
the remuneration adviser as detailed above.
The Committee’s effectiveness was reviewed by the Board as part of its overall assessment of its effectiveness (see pages
119 to 121) and the Board remains satisfied that, as a whole, the Committee has the experience and qualifications necessary
to successfully perform its role.
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2.2.2 Committee membership and attendance in 2022
This is set out on page 115. No Director was present when their own remuneration was considered or agreed.
2.2.3 Advisers to the Committee
As reported last year, the Committee carried out a formal tender process in 2021 and appointed A&M as advisers to the
Committee. A&M are signatories to the Remuneration Consultants’ Code of Conduct, which requires their advice to be
impartial, and they have confirmed their compliance with the Code to the Committee. A&M provided advice in relation
to general remuneration matters and on proposed changes to the Policy. A&M did not provide any other services to the
Company. Following an annual review, the Committee is satisfied that A&M have no connection with the Company or
individual Directors which may compromise their independence or objectivity.
The total fees paid to A&M for the advice provided to the Committee during the year was £141,006. Fees are charged on a
‘time spent’ basis.
2.2.4 Voting at Annual General Meetings
The votes cast at the 2021 and 2022 Annual General Meetings in respect of the resolution on the Directors’ Remuneration
Report and at the 2020 Annual General Meeting in respect of the resolution on the Directors’ Remuneration Policy are
summarised below.
2022 Directors’
Remuneration
Report vote
Percentage of
votes cast
2021 Directors’
Remuneration
Report vote
Percentage of
votes cast
2020 Directors’
Remuneration
Policy vote
Percentage of
votes cast
Votes for 443,328,337 97.72% 454,434,677 99.62% 421,389,944 94.71
Votes against 10,363,154 2.28% 1,744,941 0.38% 23,526,651 5.29
Total votes cast 453,691,491 456,179,618 444,916,595
Total votes withheld 597,929 36,400 63,572
2.3. Implementation of the Remuneration Policy in 2023 (unaudited)
2.3.1 2023 salary
The base salaries of the Executive Directors are being increased in 2023. The current salaries as at 1 March 2022 and from
1 March 2023 are as follows. These percentage increases are below the average increase levels for other employees of
the Company:
Executive Director
Salary from
March 2022
Salary from
March 2023
Percentage
increase £ £
Andrew Croft 590,947 620,494 5%
Craig Gentle 427,300 448,665 5%
2.3.2 Annual bonus for 2023
The Executive Directors’ maximum bonus opportunity for 2023 will, subject to the approval of the new Policy at the 2023
AGM, increase to 175% of salary. 60% of the annual bonus will be determined by a scorecard of financial performance
metrics, and 40% by key strategic targets. Malus and clawback provisions apply to both the cash and deferred elements
of the bonus.
Report of the Group Remuneration Committee continued
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Governance
Financial objectives
The scorecard of financial performance metrics is intended to:
provide a rounded and balanced view of financial performance;
include targets that management can directly influence;
include a target relating to future growth; and
recognise current year profitability.
Metrics
Weighting
(% of base
salary
– total 105%) Alignment with strategy
Underlying cash
result
21% Recognises annual cash profitability, which is an important driver of dividends and future
investment in the business.
Net funds under
management
flows
42% Reflects both new business and client retention, and is a driver of sustained profit growth.
Annual growth in
controllable
expenses
42% Keeping cost growth below the rate of growth in revenues is a key determinant of profit growth.
Annual bonus performance targets for the metrics set out here for 2023 will be disclosed in the Directors’ Remuneration
Report for 2023, as disclosing them in the Report for 2022 may have commercial disadvantages for the Company.
Strategic objectives
For 2023, the Committee has again set the Executive Directors a range of business priorities which align to the six business
priorities underpinning our annual business plan. Each priority is equally weighted and is made up of a number of objectives
with a mix of quantitative and qualitative measures, which will be scored against a set of defined KPI metrics to determine
the outcome of each priority. Set out below are details of the measures for the objectives. As was the case in 2022, the
priority titled ‘Our culture and being a leading responsible business’ is made up entirely of ESG targets. However, other
factors throughout the objectives may also to some extent recognise our aim to be a leading responsible business.
Business priority (scorecard weighting – % of base salary – total 70%)
Building community
Net manpower growth
Attainment of competent adviser status
Partner sentiment
Partner feedback from engagement events
Employee engagement
Being easier to do business with
Administration performance
Administration error rate
Salesforce integration and satisfaction levels
Enhancement of digital client proposition
Client adoption of digital tools
Data governance and quality
Delivering value to advisers and clients through
our investment proposition
Client sentiment
Value Assessment Ratings
Delivery of Fund and portfolio changes
Carbon footprint of investment proposition
Building and protecting our brand and reputation
Client sentiment
Maintain reputation
Client servicing
Cyber security
Media sentiment
Client complaints
Regulator relationship
Internal Audit, risk and regulation
Our culture and being a leading responsible business
Embed culture vision
Carbon-positive commitments
Financial resilience and education
Community impact
Inclusion and diversity
Continued financial strength
Partner Lending
Risk appetite of capital
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2.3.3 Performance Share Plan awards for 2023
The Executive Directors will each receive a PSP award in 2023 of 250% of salary (2022: 250%). The existing and proposed
new Policy both set the maximum award capacity at 250% of base salary. These awards will be subject to a relative TSR
performance condition for one third of the award; EPS CAGR using Cash Result profits for one third and EPS CAGR using
EEV adjusted profits for the final third as follows:
Performance level hurdle
TSR relative to FTSE 51 to 150
1
EPS CAGR % using Cash Result
profits
2
EPS CAGR % using EEV adjusted
profit
3
Performance
required
Percentage of
one third of
award vesting
Performance
required
Percentage of
one third of
award vesting
Performance
required
Percentage of
one third of
award vesting
Below threshold Below median 0% Below 5% 0% Below 5% 0%
Threshold Median 25% At least 5% 25% At least 5% 25%
Stretch or above Upper quartile or above 100% 12% or above 100% 12% or above 100%
1 FTSE 51 to 150, excluding investment trusts and companies in the FTSE oil, gas and mining sectors.
2 One-third of the award is based on EPS CAGR % using Cash Result profits.
3 One-third of the award is based on EPS CAGR % using EEV adjusted profit. This is by reference to the post-tax EEV operating profit (on a fully diluted
per-share basis). This metric excludes the direct impact of stock market fluctuations and changes in economic assumptions on the final year’s
performance.
4 Straight-line vesting occurs between threshold and maximum vesting.
5 Awards are subject to a three-year performance period. Vested shares cannot normally be sold for a further two years other than to the extent
necessary to settle tax on vesting or exercise.
6 Malus and clawback provisions apply.
2.3.4 Shareholding requirement
The Chief Executive is required to build and maintain a shareholding equivalent to 300% of salary in the Company’s shares.
For other Executive Directors, the shareholding requirement is 200% of salary.
2.3.5 Pensions
The Executive Directors’ pension level reduced to 15% of base salary on 1 January 2023. This brings it into line with the
pension allowance for long-serving employees in the wider workforce.
2.3.6 Duration of contracts
The Board of the Company is proposing that each of the Executive Directors be re-elected at the Company’s forthcoming
AGM. Although the Executive Directors’ services contracts do not have fixed end dates they may be terminated with
12 months’ notice from either the Company or the Executive Director.
Report of the Group Remuneration Committee continued
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2.3.7 Fees for the Board Chair and Non-executive Directors for 2023
The fees for the Board Chair and Non-executive Directors for 2022 and 2023 are as set out below. SJP aims to provide
competitive recognition and reward for all employees that reflects the nature of individual roles and enables us to attract
and retain the best talent. Similarly, providing adequate compensation to all Board members is essential if the Board is to
be able to recruit and retain high-calibre Directors and maintain effective succession plans for all Board roles. As reported
last year, the Board reviewed the fees paid to our Non-executive Directors in 2021 and set fees in line with individual
responsibilities. The Board believes that setting fees in line with responsibilities will ensure that the fees paid to individual
Directors better reflect their differing responsibilities and time commitments and will also recognise the impact on specific
Committees and roles of increased complexity, workload, regulatory responsibilities and the size of the Group.
The Board (excluding the Non-executive Directors) reviewed the base fees for the Non-executive Directors, Senior
Independent Director and Designated Non-executive Director for Workforce Engagement during the year and concluded
that no changes would be made in 2023. The Board did however note that the fees for committee membership were not
reflective of the increased responsibility and commitments for those roles and were also out of step with commensurate
roles elsewhere. Having taken account of the wider economic climate the Board agreed that modest incremental
increases should be made, commencing on 1 January 2023. The fees for Committee Chairs will increase to £26,000 (2022:
£25,000) and for Committee members (other than Committee Chairs) will increase to £10,500 (2022: £10,000). These fees
would not apply to the chair or members of the Nomination and Governance Committee which remain unchanged.
Alongside the Board’s review of Non-executive Director fees, the Committee also reviewed the fee for the Chair of the
Board and decided that it would not be increased in 2023. When setting the fees paid to our Non-executive Directors and
the Chair for 2023, the Board and Remuneration Committee sought to ensure that they were commensurate with those for
listed financial services companies of comparable size.
Fees from
1 January to
31 December
2022
Fees from
1 January to
31 December
2023
Percentage
increase from
2021
£ £
Board Chair
375,000 375,000 0%
Base fee 76,000 76,000 0%
Committee Chair (excluding Nomination and Governance Committee) 25,000 26,000 4%
Audit, Risk and Remuneration Committee member (per Committee membership) 10,000 10,500 5%
Nomination and Governance Committee member 5,000 5,000 0%
Senior Independent Director 15,000 15,000 0%
Designated Non-executive Director for Workforce Engagement 15,000 15,000 0%
This Remuneration Report was approved by the Board of Directors and signed on its behalf by:
Roger Yates, Chair of the Group Remuneration Committee
27 February 2023
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During the year, the Committee
carried out a review of the Directors’
Remuneration Policy (Policy) in
preparation for the normal triennial
vote at the AGM in 2023. The
Committee decided to propose some
amendments to the Policy to support
the continued success of the business
over the next three years and to
incorporate latest developments
in best practice. This section of the
Directors’ Remuneration Report sets
out the new Policy, which will be
submitted for a shareholder vote
at the 2023 AGM. The Policy will apply
to remuneration in respect of the
three-year period from 2023 to 2025.
Overview of the Policy
How the Committee
sets the Policy
The Committee, on behalf of the Board,
draws up and recommends the Policy
and determines the remuneration
packages of the Executive Directors
of the Company and the Chair of
the Board. In addition, the Committee
determines the remuneration of the
senior management team (including
the Chief Risk Officer) and any other
employees classified as Material
Risk Takers or Identified Staff under
relevant financial services regulations.
The Committee also oversees
remuneration policy and practice
for the wider employee population,
including the operation of any
share schemes.
Approach to, and objectives of,
the Policy
Our previous Policy was approved by
shareholders in the required triennial
vote at the 2020 AGM with 94.71%
votes in favour, and operated from
2020 to 2022. The overall approach
to remuneration adopted by
St. James’s Place has been in place
for many years, and the 2020 Policy
was little changed from that approved
by shareholders in 2017.
The Committee carried out a detailed
review of the current Policy during
2022, taking into account the business
strategy for the next three years, pay
and employment conditions of other
employees in the Group, shareholder
feedback received, latest best
practice guidance and the 2018
UK Corporate Governance Code.
Following the review, the Committee
decided to propose a number of
amendments to the Policy to ensure
the remuneration arrangements
for Executive Directors continue to
be in line with best practice and
shareholder expectations, and that
the Policy supports the business
strategy. The amended Policy will
apply to awards in respect of the
2023 performance year onwards for
all Executive Directors. A summary
of the proposed amendments to
the current Policy is also provided.
The proposed new Policy is designed
to meet the following objectives:
to support the retention of
individuals with the experience and
skills to drive the performance of
the Company;
to ensure remuneration is
transparent and reflects the
performance of the Group in
the relevant year and the longer
term. Annual bonus and long-
term incentive opportunities are
therefore linked to the achievement
of demanding performance
targets; and
to align pay with the strategic
objectives of the Company and
the interests of our shareholders,
whilst giving due regard to
principles of best practice
and relevant regulations.
Considerations when setting
the Policy
In setting the Policy for the Executive
Directors, the Committee also takes
into consideration a number of factors:
the Committee applies the
principles set out in the UK
Corporate Governance Code
and also takes into account best
practice guidance issued by the
major UK institutional investor
bodies, the PRA and FCA (including
the provisions of any applicable
Remuneration Codes) and other
relevant organisations;
the Committee has overall
responsibility for the remuneration
policies and structures for
employees of the Group as a
whole and it reviews remuneration
policy on a firm-wide basis.
When the Committee determines
and reviews the Policy, it considers
and compares it against the pay,
policy and employment conditions
of the Group to ensure that there
is appropriate alignment between
the two; and
the Committee considers the
external market in which the Group
operates and uses comparator
remuneration data from time to
time to inform its decisions.
However, the Committee recognises
that such data should be used as
a guide only (recognising that data
can be volatile and may not be
directly relevant) and that there is
often a need to phase in changes
over a period of time.
The Committee’s overall policy, having
had due regard to the factors above,
is that a substantial proportion of total
remuneration should be in the form of
variable pay. This is achieved by setting
base pay and benefits no higher than
mid-market levels, with annual bonus
and long-term incentive opportunities
linked to the achievement of
demanding performance targets.
The Policy ensures alignment of the
total remuneration paid to the
Executive Directors with the interests of
shareholders. Historically, the levels of
annual bonus awarded, and long-term
incentives awarded, to the Executives
have varied considerably, reflecting
the performance of the Group in the
relevant year.
Executive Directors are not involved in
the determination of their personal
remuneration. Committee members
are not permitted to vote on the
implementation of the Non-Executive
Director elements of the Policy that
apply to them, in line with the
procedures established by the Board
for the management of conflicts of
interest (see page 116).
Section 3
2023 Directors’ Remuneration Policy
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Engagement with shareholders
The Committee engages with, and
seeks the views of, its major investors
and investor representative bodies on
any significant changes to the Policy.
The Committee also engages from
time to time with shareholders when
considering important questions
about the implementation of
the Policy. Views expressed by
shareholders are considered by
the Committee as part of any review
of the Policy, or sooner if appropriate.
The Committee has consulted
with major shareholders and
voting agencies on the proposed
amendments to the Policy for 2023-25.
Summary of proposed amendments
to the current Policy:
increase the weight on financial
performance in the annual bonus
scorecard to 60% (from 50%
previously) and reduce the weight
on the strategic and operational
metrics to 40%;
increase the maximum annual
bonus to 200% of base salary (from
150% previously) in two stages – to
175% for 2023 and 200% from 2024;
extend the post-cessation
shareholding requirement of 300%
of salary for the CEO and 200% of
salary for the CFO, for all shares to
be retained for the entire two year
period post cessation (instead of
the previous Policy of full
requirement for the first year, and
half this for the second year); and
reduce pension allowances for
incumbent Executive Directors to
15% effective 1 January 2023,
aligned with the level provided to
long-serving employees in the
wider workforce. The allowance
level for new Executive Directors
appointees is already aligned with
the level for the wider workforce,
which is 10% of base salary on
joining rising to 15% with service.
For information, the Committee is also
reducing the weight on Embedded
Value (EV)-based EPS in the
Performance Share Plan (PSP) to one
third (from two thirds currently) and
introducing a Cash Result-based EPS
metric with a weighting of one third.
Relative TSR will continue to be used
for the remaining third. These metrics
provide a good balance, reflecting
performance over the long term
in growing the business, and in
delivering value and cash flows
for shareholders.
The Committee will measure EPS
growth for future grants in the PSP
against absolute targets rather than
relative to inflation. SJP has been one
of the very few remaining companies
using inflation-linked targets in its LTIP.
With the increasingly volatile and
unpredictable inflation levels in the
economy, continuing the inflation-
linked approach risks undermining the
incentive effect of the plan. Growth will
be measured on a Compound Annual
Growth Rate (CAGR) basis, which is
more exacting than the Average
Annual Growth Rate (AAGR) basis
used previously. The EPS targets for
the 2023 grant are detailed in the
2022 Annual Report on Remuneration.
Remuneration Policy for Executive Directors
The following table summarises each element of the Policy, explaining how each element operates and links
to corporate strategy.
Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
Base salary
To provide the core
reward for the role.
Sufficient level to
recruit and retain
individuals of the
necessary calibre,
taking into account
the required skills,
experience,
demands and
complexity of
the role.
Normally reviewed annually from 1 March, taking into account:
role, experience and performance of the individual; Company
performance; external economic conditions; average changes
in broader workforce salary; and periodic benchmarking for
each role against similar UK-listed companies.
Percentage increases will normally be at, or below, the level
of percentage increases for the Company’s wider employee
population. Increases may be higher in exceptional
circumstances, such as a change in role, a significant change in
responsibility or role size and/or where salary is substantially out
of line with market norms.
Where new appointees have been given a starting salary below
mid-market level, percentage increases above those granted
to the wider workforce may be awarded, subject to individual
performance and development in the role.
Whilst there are no
performance targets
attached to the payment
of base salary, performance
is considered as context
in the annual salary review.
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Report of the Group Remuneration Committee continued
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2
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Remuneration
Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
Pension
Helps recruit and
retain Executive
Directors.
Provides a discrete
element of the
package to
contribute to
retirement income.
Provides either defined contributions to a pension scheme or an
equivalent cash amount via non-pensionable allowance if the
Executive Director is affected by HMRC limits.
The maximum pension level for Executive Directors who joined
the Board before the 2018 AGM will be 15% from 1 January 2023.
This brings it into line with the pension allowance for long-serving
employees in the wider workforce.
For any Executive Directors joining the Board after the 2018 AGM,
the pension allowances are aligned to those of the wider
workforce, which is currently an employer contribution of 10% of
salary on joining, which increases with service up to a maximum
of 15%.
In response to changes in legislation or similar developments,
the Company may amend the form of an Executive Director’s
pension arrangements.
N/A
Other
benefits
Operate
competitive
benefits to help
recruit, retain and
support the
wellbeing of
employees.
Including but not limited to:
Company car (or salary supplement in lieu)
Private medical insurance
Life cover
Critical illness
Death-in-service cover
Relocation assistance, such as accommodation allowance,
where necessary
Use of a driver for business purposes.
Executive Directors are eligible to participate in any all-
employee share plan (e.g. SIP and SAYE) operated by the
Company, on the same terms as other eligible employees.
The maximum level of participation is subject to limits imposed
by HMRC (or a lower cap set by the Company).
Any reasonable business expenses (including tax thereon) may
be reimbursed.
N/A
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Governance
Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
Annual bonus
Rewards the
achievement of
annual financial
and strategic
business plan
targets and
delivery of key
non-financial
objectives.
Deferred element
aids retention,
encourages
long-term
shareholding,
discourages
excessive risk
taking and aligns
with shareholders’
interests.
Performance
metrics reflect the
key performance
drivers of the
annual business
plan, achievement
of which will
indicate
performance
in line with the
Group’s strategy.
Maximum opportunity for the Executive Directors is 175% of base
salary in 2023 and 200% from 2024 onwards.
Performance below threshold results in zero payment. Payments
are on a scale from 20% to 100% of the maximum opportunity,
for performance between threshold and maximum.
50% of any bonus payable is paid in cash and the remaining
50% deferred into SJP shares, the vesting of which is normally
subject to a three-year continuous service requirement but
not further performance conditions.
Dividends in the form of shares accrue on the deferred shares
and are paid to the Executive Directors during the three-year
deferral period.
All bonus payments are at the discretion of the Committee.
The Committee has the discretion to override formulaic bonus
outcomes, where necessary, under both financial and non-
financial performance metrics, to take account of overall
performance.
The Company Malus and Clawback Policy applies.
The Committee may apply malus or clawback in such
circumstances as:
misconduct;
failure to meet appropriate standards of fitness and propriety;
financial misstatement;
error or miscalculation in determining a performance
outcome or award; and
material failure of risk management.
Performance measures,
targets and weightings are
reviewed annually and set
in line with the annual
business plan.
Performance is measured
over one year. At least 60%
of the bonus is based on
financial measures,
reflecting the key priorities
of the business for the
relevant year. Up to 40% of
the annual bonus can be
based on the achievement
of key non-financial
objectives set at the start
of the year.
Actual measures and
weightings may change
from year to year to reflect
the business priorities at
that time.
Details of performance
criteria and targets set for
the year under review and
performance against them
are provided in the Annual
Report on Remuneration.
Performance
Share Plan
Supports long-
term retention.
Focuses the
Executive Director
on longer-term
corporate
performance
and objectives.
Aligns interests
to those of
shareholders.
Awards may be granted annually for up to 250% of salary as at
date of grant.
Vesting is usually on the third anniversary of the date of grant,
dependent on the achievement of stretching performance
conditions measured over a period of three financial years.
Executive Directors are required to retain vested PSP shares,
net of tax, for a further period of two years.
Dividend equivalents may accrue, in the form of shares,
on awards made between the date of grant and the end
of the two-year post-vesting holding period. These dividend
equivalents will be released only to the extent that awards vest.
The Committee has the discretion to override formulaic
vesting outcomes, where necessary, to take account of
overall performance.
The Committee has the discretion, in exceptional
circumstances, to grant and/or settle an award in cash.
The Company Malus and Clawback Policy applies. The
Committee may apply malus or clawback in such
circumstances as:
misconduct;
failure to meet appropriate standards of fitness and propriety;
financial misstatement;
error or miscalculation in determining a performance
outcome or award; and
material failure of risk management.
Awards vest to the extent
of achievement of the
following performance
metrics (equally weighted):
EPS growth based on
EEV adjusted profit;
EPS growth based
on Cash result; and
relative TSR
performance.
The Committee may
choose different measures,
and weightings between
them, if it deems it
appropriate, taking into
account the strategic
objectives of the Company.
For each performance
metric, a threshold
and stretch level of
performance is set.
At threshold, 25% of the
relevant element vests,
rising on a straight-line
basis to 100% for
performance between
threshold and maximum.
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Governance
Report of the Group Remuneration Committee continued
1
2
3
4
5
Remuneration
Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
Minimum
shareholding
requirements
To ensure
alignment of the
long-term interests
of Executive
Directors and
shareholders.
Executives are required to build and maintain a minimum
shareholding equivalent to 300% of base salary for the Chief
Executive and 200% of base salary for other Executives, to be
achieved normally within five years of appointment.
Until the threshold is reached, at least 50% of vested shares
from the PSP and other share awards (less tax liability) should
normally be retained.
N/A
Post-
cessation
shareholding
requirements
To ensure
continued
alignment of the
long-term interests
of Executive
Directors and
shareholders
post cessation.
Executives are required to maintain a shareholding equivalent
to the in-employment shareholding requirement immediately
prior to departure (or the actual share and award holding on
departure, if lower) for two years post cessation.
There are appropriate arrangements in place to ensure
enforceability.
N/A
Non-
executive
Directors’
fees
To attract
high-quality,
experienced
Non-executive
Directors.
The Chair of the Board is paid an all-inclusive annual fee
which is reviewed periodically by the Committee.
All Non-executive Directors receive a basic annual fee for
carrying out their duties, together with additional fees in
respect of Board Committee Chairship and, where appropriate,
membership, and other responsibilities, with fee levels reviewed
periodically by the Board. They may also be paid additional
fees in the event of exceptional levels of additional time being
required. PLC Board Directors who are also members of
subsidiary boards of the Company may receive fees in
respect of their duties on the subsidiary boards.
Any reasonable business expenses (including tax thereon if
applicable) may be reimbursed.
There is no prescribed maximum individual fee level or annual
increase. Reviews take into account market data for similar
non-executive roles in other companies of a similar size,
complexity and/or business to St. James’s Place as well as
the time commitment of Non-executive Directors. The policy
is to pay up to the mid-market level based on similar roles
and time commitments of chairs and non-executives in
comparable companies.
Neither the Chair nor the
Non-executive Directors
are eligible for any
performance-related
remuneration.
Notes to the Policy table
The performance measures and
targets that are set for the Executive
Directors’ annual bonus and
Performance Share Plan (PSP) awards
are carefully selected to align with the
Company’s strategic and key
performance indicators.
For the annual bonus, financial and
strategic measures are reviewed and
selected by the Committee annually.
The measures selected and weighting
between them may vary annually
depending on the key priorities of the
business for the year ahead. Robust
and demanding targets will be set
annually taking into account the
economic environment, market
expectations and the Company’s
budget and business plan for the year
ahead. Currently a set of financial
metrics, such as cash profit result, net
FUM flows and costs, are used to
assess financial performance as
these measures reflect a number of
key performance drivers including
new business, retention of funds under
management and cost control. The
remaining bonus is determined based
on strategic measures set annually on
a balanced scorecard basis.
The Company has used a relative TSR
measure and EPS growth targets for
the PSP for a number of years in line
with the Group’s strategy of delivering
profitable growth and superior returns
to its shareholders. The Committee will
continue to review the choice of
performance measures and the
appropriateness of targets prior to
each PSP award being made and will
set robust and stretching measures
for any alternative measures used. For
the EPS growth measure, stretching
targets will be set annually taking into
account the economic environment,
market expectations and the
Company’s budget and business
plan at that time. For the comparative
TSR measure the Committee’s policy
is to set threshold vesting for median
performance rising to full vesting for
upper quartile performance. The
Committee may from time to time
review the appropriateness of the
TSR comparator group.
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Governance
No performance targets are set for the
SAYE and SIP awards as these form
part of all employee arrangements
designed to encourage employees
across the Group to purchase shares
in the Company.
Committee discretion
The Committee will operate the
annual bonus plan, deferred bonus
plan, PSP and all-employee share
plans according to the rules of each
respective plan and consistent with
normal market practice and the Listing
Rules, where relevant. The Committee
will retain flexibility in a number of
areas regarding the operation and
administration of these plans, including
(but not limited to) the following:
who participates in the plans;
when to make awards and
payments;
how to determine the size of an
award, a payment, or when and
how much of an award should vest;
how to deal with a change of
control or restructuring of the Group;
in the case of stated good leaver
reasons or otherwise, whether
a Director is a good/bad leaver
for incentive plan purposes and
whether and what proportion of
awards vest at the time of leaving
or at the original vesting date(s)
as relevant;
how and whether an award may be
adjusted in certain circumstances
(e.g. for a rights issue, a corporate
restructuring or for special
dividends); and
whether any adjustment to the PSP
vesting outcome is required, taking
account of any windfall gain due
to share price variation at the time
of grant.
The Committee also has the discretion
within the Policy to adjust targets and/
or set different measures and alter
weightings for the annual bonus plan
and the PSP if events happen that
cause it to determine that the original
targets or conditions are no longer
appropriate and the amendment
is required so that the targets or
conditions achieve their original
purpose. The Committee has the
discretion to adjust the application
of the minimum shareholding
requirements, in role or post-
cessation, to take account of
exceptional circumstances.
Any use of exceptional discretion to
override formulaic outcomes would,
where relevant, be explained in the
Annual Report on Remuneration,
as appropriate.
Awards made prior to the
effective date
For the avoidance of doubt, in
approving the Policy, authority
was given to the Company to honour
any commitments entered into with
current or former Directors that have
been disclosed to shareholders in
previous remuneration reports.
This includes all historic awards that
were granted under any current or
previous share schemes operated by
the Company but remain outstanding
(detailed in the Annual Report on
Remuneration) and which will remain
eligible to vest based on their original
award terms. Awards made under the
Performance Share Plan in 2020, 2021
and 2022 will continue to be based
on the achievement of the metrics
previously set for those awards.
For each performance metric,
a threshold and stretch level of
performance is set. At threshold, 25%
of the relevant element vests, rising
on a straight-line basis to 100% for
performance between threshold
and maximum targets. Details of
payments to former Directors will be
set out in the Annual Remuneration
Report, where required by the relevant
regulations, as they arise.
Approach to remuneration for
recruitment and promotions
The Committee aims to set a new
Executive Director’s remuneration
package in line with the Policy in
place at the time of appointment.
The Committee will take into account,
in arriving at a total package and
in considering the quantum for each
element of the package, the skills
and experience of the candidate,
the market rate for a candidate of
that experience, and the importance
of securing the best candidate.
For new appointments, base salary
and total remuneration may be set
initially below normal market rates
on the basis that it may be increased
once satisfactory development
and performance in role has
been demonstrated.
Annual bonus and long-term incentive
maximum award sizes will comply
with the maximum opportunity set out
in the Policy table (not including any
arrangements to replace foregone
remuneration – see below).
Participation in the annual bonus plan
will normally be pro-rated for the year
of joining and different performance
measures may be set from those
applying to the other Directors, if it
is appropriate to do so to reflect the
individual’s responsibilities and the
point in the year at which they joined
the Board. A PSP award can be made
shortly following an appointment
(assuming the Company is not in
a close period). Where it is essential
for the purposes of recruitment, such
as where a new external recruit has
not had any bonus deferral in their
previous role, bonus deferral may be
phased in over a short period. The
standard approach will be for deferral
to apply as stated in the Policy table.
The Committee may make additional
cash and/or share-based awards
as it deems appropriate and, if the
circumstances so demand, to take
account of foregone remuneration
by an executive on leaving a previous
employer. Awards would, where
possible, reflect the nature of
awards forfeited in terms of delivery
mechanism (cash or shares), time
horizons, attributed expected value
and performance conditions. Other
payments may be made in relation
to relocation expenses and other
incidental expenses as appropriate.
In the case of an internal appointment,
any variable pay element awarded
in respect of the prior role would
be allowed to pay out according
to its terms and any other ongoing
remuneration obligations existing
prior to appointment would continue.
For an overseas appointment, the
Committee will have the discretion to
offer benefits and pension provisions
which reflect local market practice
and relevant legislation.
If appropriate and in exceptional
circumstances the Committee may
agree, on the recruitment of a new
Executive Director, a notice period of
in excess of 12 months but reducing
to 12 months over a specified period.
For the appointment of a new Chair
or Non-executive Director, the fee
arrangement would be set in
accordance with the approved
Policy at that time.
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Governance
Risk management
Risk is managed within the Policy
through the Committee:
taking into consideration the
recommendations contained in
any applicable Remuneration
Codes and associated guidance
which apply to the Group;
structuring the annual bonus plan
to contain a mix of financial and
strategic performance metrics,
where performance conditions
are tailored to the business outlook
and strategy, including the
management of risk within the
business. The Committee also
retains the discretion to reduce
the bonus and PSP outturns
where appropriate;
assessing the performance metrics
from a risk perspective, with input
from the Risk Committee and Chief
Risk Officer;
requiring deferral of 50% of annual
bonus payments into the Company’s
shares, which are then deferred for
three years;
requiring the Executive Directors to
retain shares acquired on vesting
of PSP awards granted from
1 January 2015 onward for a
post-vesting holding period of two
years on the shares vesting. During
this period the vested shares
cannot normally be sold other than
to the extent necessary to settle tax
on vesting or exercise;
ensuring that the majority of the
incentive pay comes in the form of
a long-term incentive plan subject
to stretching performance targets
measured over multi-year
performance periods, with the
performance period for
subsequent awards overlapping
the previous award, together with
an additional two-year holding
period. This ensures that there is no
incentive to maximise performance
over a particular period;
incorporating withholding (malus)
and recovery (clawback) provisions
into the Company’s bonus and
long-term incentive plans; and
requiring the Executive Directors to
build and maintain a substantial
shareholding in the Company,
and to retain a shareholding for
two years post cessation.
Remuneration policy
across the Group
The Policy is designed after having
regard to the remuneration policy
for employees across the Group as
a whole and the Committee aims,
where appropriate, for there to be
a consistent approach applied.
For instance, the suite of benefits in
kind is generally consistent (other
than in relation to quantum) and all
employees participate in annual
bonus plans. All employees, including
the Executive Directors, are offered
the opportunity to participate in
the Group’s SAYE Share Option Plan
and Share Incentive Plan. Senior
managers participate in the long-
term incentive plan.
The Policy is more weighted towards
variable pay than for other employees
to make a greater part of their pay
conditional on the successful delivery
of business strategy, and in line with
shareholder interests. In addition,
a higher proportion of senior level
remuneration is deferred than is the
case for the workforce as a whole.
The Workforce Engagement Panel is
periodically consulted on a range of
topics, which include, amongst other
matters, the Directors’ Remuneration
Policy and the Company’s approach
to remuneration.
Report of the Group Remuneration Committee continued
1
2
3
4
5
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Governance
Remuneration scenarios
for Executive Directors
The chart below shows how the
proportion of each Executive Director’s
remuneration package varies at
different levels of performance in
accordance with the Policy to be
implemented in 2023 and using the
assumptions set out below. A significant
proportion of remuneration is linked
to performance, especially at stretch
performance levels.
Assumptions
Threshold = fixed pay only (salary,
benefits and pension).
Target = fixed pay plus payout of the
annual bonus at midway between
threshold and max and 50% vesting
of PSP awards.
Maximum = fixed pay plus 100%
vesting of the annual bonus and
PSP awards.
CEO
100%
35%
22%
18%
30% 35%
32% 46%
26% 56%
£763,000
£2,190,000
£3,400,000
£4,176,000
Minimum
Target
Maximum
Maximum + 50%
share price growth
CFO
100%
35%
23%
18%
30% 35%
32% 46%
26% 56%
£555,000
£1,587,000
£2,462,000
£3,023,000
Minimum
Target
Maximum
Maximum + 50%
share price growth
Fixed pay
Annual bonus
LTIP
Maximum + 50% share price growth =
maximum pay + the impact of an
assumed 50% share price growth
on the PSP award.
Salaries used are those applying
on 1 March 2023 and taxable benefits
are those reported for the year ending
31 December 2022.
Pension is based on 2023 Policy
applied to 1 March 2023 salaries.
Amounts have been rounded to
the nearest £1,000. The assumptions
noted for ‘on-target’ PSP performance
in the graph above are provided for
illustration purposes only. Participation
in all employee plans, dividends
payable on PSP awards over the
vesting period or on deferred share
bonus awards are not included in
the above scenarios and the table
assumes no increase to the
share price.
Service contracts
and loss of office
The Company’s policy is that
service contracts may be terminated
with 12 months’ notice from either
the Company or from the Executive
Director (except in certain exceptional
recruitment situations where a longer
notice period from the Company
may be set provided it reduces
to a maximum of 12 months with a
specified time limit). Service contracts
do not contain a fixed end date.
Under their service contracts the
Executive Directors are entitled to
salary, pension contributions and
benefits for their notice period (except
on termination for events such as
gross misconduct where payment
will be for sums earned up to the date
of termination with no notice period
only). The Company would seek to
ensure that any payment is mitigated
by use of phased payments and
offset against earnings elsewhere in
the event that an Executive Director
finds alternative employment during
their notice period. There are no
contractual provisions in force other
than those set out above that impact
any termination payment.
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Governance
In summary the position on cessation of employment is as follows:
Provision Detailed Terms
Notice Period
12 months by either party
Termination payment
Base salary plus benefits (including pension). An express obligation on the Executive to mitigate
their loss. Payments can be made on a monthly basis, and reduced or ceased if an Executive
is able to secure alternative employment.
In addition any statutory amounts would be paid as necessary.
Remuneration
entitlements
on cessation
of appointment
A pro-rata bonus may also become payable for the period of active service along with
the vesting of outstanding share awards (in certain circumstances as described below).
Change of control
As on termination and with remuneration entitlements as described above.
Executive Directors are also subject
to the Company’s post-cessation
shareholding policy.
When considering the size of any
proposed termination payment, the
Committee would take into account
a number of factors including the
health, length of service and
performance of the relevant Executive,
including the duty to mitigate their
own loss, with a broad aim to avoid
rewarding poor performance while
dealing fairly with cases where the
departure is due to other reasons,
for example illness or redundancy.
Any unvested awards held under the
PSP schemes will lapse at cessation of
employment, unless the individual is
leaving for certain reasons (defined
under the plan such as death, injury,
ill-health, disability, redundancy,
retirement, their office or employment
being either a company which ceases
to be a Group member or relating to
a business or part of a business which
is transferred to a person who is not
a Group member, or any other reason
the Committee so decides). In these
circumstances, unvested awards will
normally vest at the normal vesting
date (unless the Committee decides
they should vest at cessation of
appointment) subject to performance
conditions being met and normally
subject to scaling back in respect of
actual service as a proportion of the
total performance period (unless the
Committee decides that scaling back
is inappropriate). The same approach
applies on a change of control.
Any unvested awards held under the
Deferred Bonus Scheme will lapse at
cessation of employment unless the
Committee exercises discretion to
allow them to be retained. In these
circumstances the Committee may
determine whether unvested awards
will vest at the normal vesting date
or at cessation of employment.
The Committee may agree to the
payment of disbursements such
as legal costs and outplacement
services if appropriate and
depending on the circumstances
of the leaving Executive.
The Committee may pay any legal
entitlements or settle or compromise
claims in connection with a termination
of employment, where considered in
the best interests of the Company.
Non-executive Directors’
letters of appointment
The Non-executive Directors
(including the Chair) do not have
service contracts or any benefits
in kind arrangements and do not
participate in any of the Group’s
pension or incentive arrangements.
The appointment of each Non-
executive Director can be terminated
by giving three months’ notice
(subject to annual re-appointment at
the AGM). Any period of service longer
than six years is subject to particularly
rigorous review by the Nomination
Committee of the Board. The Non-
executive Directors’ letters of
appointment do not provide for
any payment on termination except
for accrued fees and expenses to
the date of termination.
The terms and conditions of Executive
Directors’ service contracts and the
letters of appointment of the Non-
executive Directors are available
for inspection at the Company’s
registered office during normal
business hours and at the AGM,
the details of which can be found in
the Directors’ report in the Company’s
Annual Report and Accounts.
External appointments
Executive Directors are permitted to
be appointed to an external board or
committee so long as this is unlikely
to interfere with the business of the
Group. Any fees received in respect
of external appointments are retained
by the relevant Executive Director.
Report of the Group Remuneration Committee continued
1
2
3
4
5
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Governance
The Directors present their report together with the audited Consolidated Financial Statements of the Group for the year
ended 31 December 2022. This report has been prepared in accordance with requirements outlined within The Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and, together with the Strategic Report,
forms the management report as required under the UK Financial Conduct Authority’s (FCA) Disclosure and Transparency
Rule DTR4.1. Certain information that fulfils the requirements of the Directors’ report can be found elsewhere in this
document and is referred to below. This information is incorporated into this Directors’ report by reference.
Information disclosed in accordance with the requirements of the sections of the FCA’s Listing Rule LR9.8 (Annual Financial
Report) and Disclosure and Transparency Rule DTR7 (Corporate Governance) that is applicable can be located as follows:
Disclosure Location
Board diversity targets Corporate governance report
Details of long-term incentive schemes Directors’ Remuneration Report
Contracts of significance This Directors’ report
Shareholder waivers of dividends This Directors’ report
Shareholder waivers of future dividends This Directors’ report
Directors’ interests in the Company’s shares Directors’ Remuneration Report
Major shareholders’ interests This Directors’ report
Authority to purchase own shares Corporate governance report
Internal controls Report of the Group Audit Committee
Climate-related financial disclosures consistent with TCFD 2022 TCFD Report located on our corporate website at:
www.sjp.co.uk/about-us/responsible-business
As permitted by legislation, some of
the matters required to be included
in the Directors’ report have instead
been included elsewhere in this
Annual Report and Accounts:
future business developments
throughout the Strategic Report;
risk management on pages 90
to 99 of the Strategic Report;
details of branches operated by
the Company on page 248; and
the Group’s impact on the
environment, including those
disclosures required regarding
greenhouse gas emissions,
on pages 46 to 51 of the Strategic
Report.
Status of Company
The Company is registered as a public
limited company under the Companies
Act 2006. For details of the Company’s
subsidiaries and overseas branches,
please see Note 23 to the Financial
Statements.
Going concern
In conjunction with its assessment
of longer-term viability as set out
on pages 97 to 99, the Board
concluded that it remained
appropriate to adopt the going
concern basis of accounting in
preparing the Consolidated Financial
Statements as it believes the Group
will continue to be in business, with
neither the intention nor the necessity
of liquidation, ceasing trading or
seeking protection from creditors
pursuant to laws or regulations, for a
period of at least 12 months from the
date of approval of the Consolidated
Financial Statements.
Share capital
Structure of the
Company’s capital
As at 31 December 2022, the
Company’s issued and fully paid-
up share capital was 544,235,757
ordinary shares of 15 pence each.
All ordinary shares are quoted on the
London Stock Exchange and can be
held in uncertificated form via CREST.
All shares have equal rights to
dividends and to participate in a
distribution on winding up. Details
of the movement in the issued share
capital during the year are provided
in Note 20 to the Consolidated
Financial Statements.
Voting rights
At any General Meeting, on a show of
hands, each member who is present
in person has one vote and every proxy
present who has been duly appointed
by a member entitled to vote on a
resolution has one vote. On a poll, every
member who is present in person or
by proxy shall have one vote for every
share of which they are the holder.
Directors’ report
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Governance
Directors’ report continued
Shares held by the Company’s
Employee Share Trust and Share
Incentive Plan Trust rank pari passu
with the shares in issue and have no
special rights. Voting rights and rights
of acceptance of any offer relating to
the shares held in the Employee Share
Trust rests with the trustees, who may
take account of any recommendation
from the Company. The trustees of the
Share Incentive Plan Trust may vote in
respect of shares held in the Trust, but
only as instructed by participants in
the Share Incentive Plan in respect of
their Partnership, Dividend and/or
Matching Shares. The trustees will not
otherwise vote in respect of shares
held in the Share Incentive Plan Trust.
Restrictions on voting rights
If any shareholder has been sent a
notice by the Company under section
793 of the Companies Act 2006 and
has failed to supply the relevant
information within a period of 14 days,
then the shareholder may not (for so
long as the default continues) be
entitled to attend or vote either
personally or by proxy at a
shareholders’ meeting, or to exercise
any other right conferred by
membership in relation to
shareholders’ meetings.
If those default shares represent at
least 0.25% of their class, any dividend
payable in respect of the shares will
be withheld by the Company and
(subject to certain limited exceptions)
no transfer, other than an excepted
transfer, of any shares held by the
member in certificated form will
be registered.
Articles of Association
The full rights and obligations
attaching to the ordinary shares of the
Company are set out in the Articles.
Holders of ordinary shares are entitled
to: receive the Company’s Reports
and Accounts; attend, speak and
exercise voting rights; and appoint
proxies to attend General Meetings.
Restrictions on share transfers
There are restrictions on share
transfers, all of which are set out in the
Articles. Restrictions include transfers
made in favour of more than four joint
holders and transfers held in
certificated form. Directors may
decline to recognise a transfer unless
it is in respect of only one class of
share and lodged and duly stamped
by the HMRC. The Directors may also
refuse to register any transfer of
shares held in certificated form which
are not fully paid. Directors may also
choose to decline requests for share
transfers from a US Person (as defined
under Regulation S of the United
States Securities Act 1933) that would
cause the aggregate number of
beneficial owners of issued shares
who are US Persons to exceed 70.
The registration of transfers may be
suspended at such times and for such
periods (not exceeding 30 days in any
year) as the Directors may from time
to time determine in respect of any
class of shares.
The Company is not aware of any
agreements between shareholders
that restrict the transfer of shares or
voting rights attached to the shares.
The interests of the Directors, and any
persons closely associated with them,
in the issued share capital of the
Company are shown on page 156.
Substantial shareholders
Information provided to the Company by substantial shareholders pursuant to the FCA’s Disclosure Guidance and
Transparency Rules (DTR) is published via a Regulatory Information Service and are available on the Company’s website.
As at 31 December 2022 and the date of this report, the Company had been notified of the following interests disclosed to
the Company under Chapter 5 of the DTR:
% of voting rights
1
BlackRock, Inc. 6.36%
BLS Capital 5.23%
1 Percentages are shown as a percentage of the Company’s total voting rights as at the date the Company was notified of the change in holding.
Results and dividends
The financial review on pages 70 to 89 sets out the consolidated results for the year.
An interim dividend of 15.59 pence per share, which equates to £84.7 million, was paid on 23 September 2022 in respect of
the year ended 31 December 2022 (2021: 11.55 pence per share/£62.4 million). The Directors recommend that shareholders
approve a final dividend of 37.19 pence per share, which equates to £202.4 million (2021: 40.41 pence per share/
£218.9 million), in respect of the year ended 31 December 2022, to be paid on 31 May 2023 to shareholders
on the register at close of business on 5 May 2023.
Details of the Dividend Reinvestment Plan (DRIP) are set out on page 270.
176
St. James’s Place plc Annual Report and Accounts 2022
Governance
Our people
Details of the Company’s approach to
maintaining an appropriately skilled
and diverse workforce, including
recruitment practices, development
opportunities, employee engagement
and equal opportunities can be found
in the our responsible business
section on pages 57 to 61.
Details of how the Board engages with
employees can be found on page 106
of the Corporate Governance section.
This engagement, and the presence
of a designated Non-executive Director
on the Board, ensures that the Board
is able to take account of the interests
of employees in its discussions and
when making decisions. Engagement
during 2022 contributed to the Board’s
consideration of key strategic topics
and the determination of policies
affecting the workforce, and helped to
inform future decision-making around
flexible working and our strategy
regarding employee rewards.
Fostering business
relationships
Engagement with the Board’s key
stakeholders, including suppliers
and clients, is summarised in the
corporate governance report on
pages 105 to 107. In many cases the
Group’s primary point of engagement
with these stakeholders is through
the business, where regular dialogue
is maintained. Focus on strategic
topics and regular reporting from
management enables the Board
to establish a clear view of business
relationships with these stakeholders
and has provided important context in
its deliberations and decision-making.
Further details are set out in the
section 172(1) statement on pages
104 to 111.
Significant contracts
and change of control
The Company has a number of
contractual arrangements which it
considers essential to the business
of the Company. Specifically, these
are committed loan facilities from
a number of banks, arrangements
with fund managers and third-party
providers of administrative services.
A change of control of the Company
may cause some agreements to
which the Company is a party to
alter or terminate. These include
bank facility agreements,
securitisation arrangements
and employee share plans.
The Group had committed facilities
totalling £509 million as at 27 February
2023 which contain clauses which
require lender consent for any change
of control. In addition, the Group
guarantees the obligations of loans
made to Partners in connection with
facilities agreed with various lenders
totalling £414 million in aggregate.
Should consent not be given,
a change of control would trigger
mandatory repayment of the
said facilities.
The Group also had committed
securitisation facilities totalling £175
million which contain clauses which
require lender consent for any change
of control. Should such consent not
be given, a change of control would
trigger early amortisation of
the facilities.
All the Company’s employee share
plans contain provisions relating to
a change of control. Outstanding
awards and options may vest and
become exercisable on a change of
control, subject where appropriate to
the satisfaction of any performance
conditions at that time and pro-rating
of awards.
Financial instruments
An indication of the Group’s use of
financial instruments can be found in
Note 17 to the Financial Statements.
Directors and Directors’
indemnities
Details of the Directors of the
Company at the date of this
report and during the year ended
31 December 2022 can be found in
the corporate governance report
on pages 102 and 103. Details of the
indemnity provisions in place for the
Directors, including qualifying third-
party indemnity provisions, can be
found on page 116.
Political and
charitable donations
It is the Group’s policy not to make any
donations to political parties within
the definitions set out in the Political
Parties, Elections and Referendums
Act 2000 and sections 362 to 379 of
the Companies Act 2006. During the
year we have donated £5.4 million
to the St. James’s Place Charitable
Foundation, more details of which
can be found on pages 55 and 56.
Annual General Meeting
The Company plans to hold its Annual
General Meeting on Thursday 18 May
2023. Full details of the meeting,
including location, time and the
resolutions to be put to shareholders
at the meeting, are included in a
separate Notice of Annual General
Meeting, which will be available on
our website www.sjp.co.uk.
Important events since
the financial year-end
Details of important events affecting
the Group since 31 December 2022
can be found in the Chief Executive’s
report on pages 16 to 19.
Disclosure of information
to auditors
Each of the Directors, at the date of
approval of this report, confirms that:
so far as each Director is aware,
there is no relevant audit
information of which the auditors
are unaware; and
each Director has taken all steps
that he or she ought to have taken
as a Director to make himself or
herself aware of any relevant audit
information and to establish that
the Company’s auditors are aware
of such information.
This confirmation is given and should
be interpreted in accordance with
the provisions of section 418 of the
Companies Act 2006.
On behalf of the Board:
Andrew Croft, Chief Executive
Craig Gentle, Chief Financial Officer
27 February 2023
177
Strategic Report Financial Statements Other Information
www.sjp.co.uk
Governance
The Directors are responsible for
preparing the Annual Report and
Accounts 2022 and the financial
statements in accordance with
applicable law and regulation.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors have prepared the Group
financial statements in accordance
with UK-adopted international
accounting standards and the
Company financial statements in
accordance with United Kingdom
Generally Accepted Accounting
Practice (United Kingdom Accounting
Standards, comprising FRS 101
Reduced Disclosure Framework,
and applicable law).
Under company law, the Directors
must not approve the financial
statements unless they are satisfied
that they give a true and fair view of
the state of affairs of the Group and
Company and of the profit or loss of
the Group for that period. In preparing
the financial statements, the Directors
are required to:
select suitable accounting policies
and then apply them consistently;
state whether applicable UK-
adopted international accounting
standards have been followed for
the Group financial statements,
and United Kingdom Accounting
Standards, comprising FRS 101,
have been followed for the
Company financial statements,
subject to any material departures
disclosed and explained in the
financial statements;
make judgements and accounting
estimates that are reasonable and
prudent; and
prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and Company will
continue in business.
The Directors are responsible for
safeguarding the assets of the Group
and Company and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities.
The Directors are also responsible
for keeping adequate accounting
records that are sufficient to show
and explain the Group’s and
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Group and
Company and enable them to ensure
that the financial statements and the
Directors’ Remuneration Report
comply with the Companies Act 2006.
The Directors are responsible for the
maintenance and integrity of the
Company’s website. Legislation in
the United Kingdom governing the
preparation and dissemination of
financial statements may differ
from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the
Annual Report and Accounts 2022
and the financial statements, taken as
a whole, are fair, balanced and
understandable and provide the
information necessary for
shareholders to assess the Group’s
and Company’s position and
performance, business model
and strategy.
Each of the Directors, whose names
and functions are listed in the Board
of Directors section on pages 102
and 103 confirms that, to the best
of their knowledge:
the Group financial statements,
which have been prepared in
accordance with UK-adopted
international accounting
standards, give a true and fair view
of the assets, liabilities, financial
position and profit of the Group;
the Company financial statements,
which have been prepared in
accordance with United Kingdom
Accounting Standards, comprising
FRS 101, give a true and fair view of
the assets, liabilities and financial
position of the Company; and
the Strategic Report includes a
fair review of the development
and performance of the business
and the position of the Group
and Company, together with a
description of the principal risks
and uncertainties that it faces.
In the case of each Director in office
at the date the Directors’ report
is approved:
so far as the Director is aware, there
is no relevant audit information of
which the Group’s and Company’s
auditors are unaware; and
they have taken all the steps that
they ought to have taken as a
Director in order to make themselves
aware of any relevant audit
information and to establish that
the Group’s and Company’s auditors
are aware of that information.
By order of the Board:
Jonathan Dale, Company Secretary
27 February 2023
Statement of Directors’
responsibilities
178
St. James’s Place plc Annual Report and Accounts 2022
Governance
Financial
Statements
Independent Auditors’ Report to the
Members of St. James’s Place plc 180
Consolidated Statement
of Comprehensive Income 188
Consolidated Statement
of Changes in Equity 189
Consolidated Statement
of Financial Position 190
Consolidated Statement
of Cash Flows 191
Notes to the Consolidated
Financial Statements under
International Financial
Reporting Standards 192
179
Financial Statements
Other InformationGovernanceStrategic Report
Report on the audit of the
Financial Statements
Opinion
In our opinion:
St. James’s Place plc’s Consolidated Financial Statements
and Parent Company Financial Statements (the “Financial
Statements”) give a true and fair view of the state of
the Group’s and of the Parent Company’s affairs as
at 31 December 2022 and of the Group’s profit and
the Group’s cash flows for the year then ended;
the Consolidated Financial Statements have been
properly prepared in accordance with UK-adopted
international accounting standards as applied in
accordance with the provisions of the Companies
Act 2006;
the Parent Company Financial Statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, including FRS 101 “Reduced
Disclosure Framework”, and applicable law); and
the Financial Statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the Financial Statements, included
within the Annual Report and Accounts (the “Annual Report”),
which comprise: Consolidated and Parent Company
Statements of Financial Position as at 31 December 2022;
the Consolidated Statement of Comprehensive Income,
Consolidated Statement of Cash Flows, the Consolidated
and Parent Company Statements of Changes in Equity for
the year then ended; and the notes to the Financial
Statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Group
Audit Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in
the Auditors’ responsibilities for the audit of the Financial
Statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the Financial Statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in Note 5, we have provided no
non-audit services to the Parent Company in the period
under audit.
Our audit approach
Overview
Audit scope
The Consolidated Financial Statements comprise the
consolidation of approximately 70 individual components,
each of which represents an individual legal entity within
the Group or consolidation adjustments.
We assessed each component and considered
the contribution it made to the Group’s performance
in the year, whether it displayed any significant risk
characteristics and/or whether it contributed a significant
amount to any individual Financial Statement line item.
The above assessment resulted in us identifying
seven financially significant components that required
audit procedures for the purpose of the audit of the
Consolidated Financial Statements.
Six financially significant components are based in
the UK and were audited by the PwC UK audit team.
The other significant component is based in the Republic
of Ireland and was audited by Grant Thornton Ireland.
By performing audit procedures on these seven
components and by audit of specific balances in
four components with large individual balances,
we achieved coverage greater than 85% of each
material Financial Statement line item within the
Consolidated Financial Statements.
We performed a full scope audit of all material line
items in the Parent Company’s Financial Statements
Key audit matters
Valuation of level 3 investments, being investment
properties and equities and fixed income securities
in the Diversified Assets Fund (Group)
Valuation of the Operational Readiness prepayment
in respect of the development of an administration
platform at an outsourced provider (Group)
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St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Independent Auditors’ Report to the Members
of St. James’s Place plc
Materiality
Overall Group materiality: £20,700,000 (2021: £15,000,000)
based on 5% of average underlying cash generated in
the year (2021: 5% of average underlying cash result
generated in the past three years).
Specific group overall materiality: £720,000,000 (2021:
£758,000,000) based on 0.5% (2021: 0.5%) of Assets held to
cover linked liabilities applied to assets held to cover
linked liabilities, investment contract liabilities and
associated income statement line items.
Overall Parent Company materiality: £13,800,000
(2021: £14,200,000) based on 1% of total assets
(2021: 1% of total assets).
Performance materiality: £15,500,000 (2021: £11,250,000)
(Group) and £10,350,000 (2021: £10,600,000) (Parent
Company).
Specific performance materiality: £540,000,000
(2021: £568,000,000) applied to assets held to
cover linked liabilities, investment contract liabilities
and associated income statement line items.
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
Financial Statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the Financial Statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the Financial
Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation of investments with judgemental
valuation, being investment properties and
level 3 investments in the Diversified Assets
Fund (Group)
As disclosed in the Group Audit Committee
report (Page 122) and Note 17 (Page 226).
As at 31 December 2022, the Group held
£146.5 billion of investments (including
cash and cash equivalents). The majority of
these investments do not require significant
judgement in calculating their valuation
in the Financial Statements. However,
£3.3 billion of these investments are in
investment properties (£1.3 billion) and
level 3 equities (£1.6 billion) and fixed
income securities (£0.4 billion) in the
Diversified Assets Fund (“DAF”), which require
management to use significant estimates
and judgements in order to calculate the
valuation at the year-end. Due to the
magnitude of these balances and the level
of judgement involved in their valuation,
this was an area of focus for our audit. The
Group outsources the investment valuation
activities for each, with assets in the DAF
valued by Kohlberg Kravis Roberts & Co.
Inc (“KKR”), whilst the investment property
portfolio is managed by Orchard Street
with regular valuations performed by CBRE.
Investment properties:
We engaged our internal real estate valuation experts to review the
methodology and key assumptions used by CBRE in valuing the
property portfolio.
Our valuation experts:
Obtained and reviewed the valuation reports produced by CBRE
and confirmed that the methodology adopted was appropriate.
Benchmarked the key assumptions used by CBRE against industry
norms using our experience and knowledge of the market for all
properties in the portfolio.
Where they fell outside of the expected ranges, valuations showed
unexpected movements, or otherwise appeared unusual, further
testing was performed and, when necessary, further discussions
were held with Valuers to understand and validate the assumptions.
Agreed key data inputs to the valuations to supporting evidence on
a sample basis
Level 3 equities and fixed income securities in the Diversified Assets Fund:
We engaged our internal valuation experts to review the methodology
and key assumptions used by KKR in valuing a sample of individual level 3
investments within the DAF. Our valuations experts met with KKR and reviewed
the year end valuation report for each asset in the sample. They challenged
KKR on the appropriateness of the methodology and assumptions, given the
specifics of each of the assets in question. From the evidence obtained when
testing the valuation of investment properties and level 3 assets in the DAF,
we found the assumptions and methodology used, and the resulting
valuations, to be appropriate
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Financial Statements
Key audit matter How our audit addressed the key audit matter
Valuation of the Operational Readiness
prepayment in respect of the development
of an administration platform at an
outsourced provider (Group)
As disclosed in the Group Audit Committee
report (Page 122) and Note 12 (Page 217).
The Group is charged costs by an
outsourced provider for the development
of a policy administration platform used
by the Group. These costs are recognised
as a prepayment and are unwound over
the duration of the related service
agreement with the provider. The balance of
the prepayment asset at 31 December 2022
was £278.3 million. The maximum value at
which the prepayment can be recognised
is equal to the net present value of future
cost savings from the agreement. Due to
the nature and magnitude of the amount
arising from the contractual terms, the
valuation of this asset was an area of
focus for our audit.
In testing whether the asset was valued appropriately and whether
an impairment was necessary we:
agreed amounts capitalised in the year to the service agreement
and cash payments to the provider;
assessed the reasonableness of the assumptions underlying
management’s discounted cash flow analysis calculating the anticipated
future cost savings that support the valuation of the asset;
agreed that the cost savings had been calculated using appropriate
service tariffs;
performed a sensitivity analysis on the inflation and discount rate
assumptions as well as business flow levels to determine the potential
impact of changes in these assumptions to check whether they would
affect the carrying value of the asset; and
considered the headroom available under what we considered to
be reasonably possible downside scenarios and whether additional
disclosure was necessary.
We determined that the accounting, recognition and disclosure of the
asset in the Financial Statements was supported by the evidence obtained.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion on
the Financial Statements as a whole, taking into account
the structure of the Group and the Parent Company, the
accounting processes and controls, and the industry in
which they operate.
The Group is structured as a vertically integrated wealth
management business and operates predominantly within
the United Kingdom. Seven components within the Group
were considered financial significant and therefore required
an audit of their complete financial information. These were
St. James’s Place UK plc, St. James’s Place Unit Trust Group
Limited, St. James’s Place Investment Administration Limited,
St. James’s Place Management Services Limited,
St. James’s Place Wealth Management plc, St. James’s Place
Wealth Management Group Limited and St. James’s Place
International plc.
Six of the financially significant components were audited
by PwC UK. St. James’s Place International plc is incorporated
and regulated in the Republic of Ireland and was audited
by Grant Thornton Ireland. At the planning stage of the audit
we provided written instructions to Grant Thornton Ireland
to confirm the work we required them to complete. The
instructions set out respective responsibilities (including
on actuarial work), our involvement in their work, and the
materiality level they should perform their work to. We held
regular phone calls and meetings with the Grant Thornton
Ireland engagement leader, director, and senior members
of the Grant Thornton Ireland team through the planning,
execution and completion phases of the audit to inform
them of developments at a Group level and to understand
from them any local developments that were relevant for
our audit of the Group. During the execution phase, senior
members of the UK engagement team visited Grant
Thornton Ireland and performed a live review of Grant
Thornton Ireland’s audit working papers, reviewing selected
elements of their work focused on the significant and
elevated risks identified.
In addition to the full scope audit of the seven components
noted above, we also performed specific audit procedures
on certain Financial Statement line items within three other
components. These Financial Statement line items were
selected for testing to ensure that we had sufficient coverage
of each Financial Statement line item within the
Consolidated Financial Statements.
182
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Independent Auditors’ Report to the Members
of St. James’s Place plc
continued
The impact of climate risk on our audit
The Group has set out its approach and goals in respect
of its Funds under Management in the Investing responsibly
section of the Strategic Report. This includes the goal
of becoming “Net Zero” in investments by 2050 (with an
interim target of a 25% reduction in the carbon emissions
of its investment proposition by 2025).
In planning our audit, we considered the extent to which
climate change is impacting the Group and how it impacted
our risk assessment for the audit of the Group’s Financial
Statements. In making these considerations we:
Enquired of management in respect of their own
climate change risk assessment, including associated
governance processes and understood how these
have been implemented.
Obtained the latest Task Force for Climate Related
Financial Disclosures (“TCFD”) report from the Group
and checked it for consistency with our knowledge of
the Group based on our audit work and the disclosures
made in the Strategic Report.
Considered management’s risk assessment and the
TCFD report in light of our knowledge of the wider asset
management and wealth management industries.
We have incorporated a consideration of the climate
change impact on the audit of the Group’s valuation
of investment properties and level 3 investments in the
Diversified Assets Fund held at fair value, taking into
account the nature of the asset and the valuation approach.
This has not had a significant impact on the related key
audit matters.
Our conclusions were that the impact of climate change
does not give rise to a Key Audit Matter for the Group and
it did not impact our risk assessment for any material
Financial Statement line item or disclosure.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual Financial Statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the Financial Statements as a whole.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Financial Statements – Group Financial Statements – Parent Company
Overall materiality £20,700,000 (2021: £15,000,000). £13,800,000 (2021: £14,200,000).
How we determined it 5% of underlying cash generated in the year (2021: 5% of
average underlying cash generated in the past three years)
1% of total assets (2021: 1% of total assets)
Rationale for
benchmark applied
The engagement team concluded that £20.7 million
is the most appropriate figure when setting an overall
materiality on the engagement. The quantum of
£20.7 million was determined by considering the various
benchmarks available to us as auditors, our experience
of auditing the Group and our experience of the Group.
£20.7 million represents 5% of the underlying cash
generated in the last year.
The purpose of the Parent Company
is to hold investments in other Group
companies. As such PwC considers
it appropriate to use total assets as
the benchmark for overall materiality.
For each component in the scope of our Group audit,
we allocated a materiality that is less than our overall
Group materiality. The range of materiality allocated
across components was £3,000,000 to £19,700,000.
Certain components were audited to a local statutory
audit materiality that was also less than our overall
Group materiality.
We use performance materiality to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and
the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality
was 75% (2021: 75%) of overall materiality, amounting to
£15,500,000 (2021: £11,250,000) for the Consolidated Financial
Statements and £10,350,000 (2021: £10,600,000) for the Parent
Company Financial Statements.
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Financial Statements
In determining the performance materiality, we considered
a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness
of controls – and concluded that an amount at the upper
end of our normal range was appropriate.
For certain balances, our specific performance materiality
was 75% of the specific overall materiality for assets held
to cover linked liabilities, investment contract liabilities and
associated income statement line items, amounting to
£540,000,000 (2021: £568,000,000) for the consolidated
financial statements.
We agreed with the Group Audit Committee that we would
report to them misstatements identified during our audit
above £1,000,000 (Group audit) (2021: £750,000) and
£690,000 (Parent Company audit) (2021: £700,000) as well
as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons. For balances
where we apply our specific performance materiality we
agreed to report misstatements greater that £20,700,000
(2021: £15,000,000).
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s
and the parent company’s ability to continue to adopt the
going concern basis of accounting included:
Obtained management’s assessment of the
going concern of the Group, and challenged the
appropriateness of the assumptions used by utilising
our knowledge of the Group gained throughout the
audit and obtaining further corroborative audit evidence.
Considered the results of management’s analysis of the
relevant solvency requirements and liquidity position of
the Group, including forward looking scenarios within
the Group’s Own Risk and Solvency Assessment.
Considered information obtained through review of
regulatory correspondence, minutes of meetings of
the Board, Group Audit and Group Risk Committees,
as well as publicly available information to identify
any information that would contradict management’s
assessment.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group’s and the Parent Company’s
ability to continue as a going concern for a period of at
least twelve months from when the Financial Statements
are authorised for issue.
In auditing the Financial Statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the Financial Statements
is appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to the
Group’s and the Parent Company’s ability to continue as
a going concern.
In relation to the Directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the Financial Statements about
whether the Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the Financial Statements and our
auditors’ report thereon. The Directors are responsible for the
other information, which includes reporting based on the
Task Force on Climate-related Financial Disclosures (TCFD)
recommendations. Our opinion on the Financial Statements
does not cover the other information and, accordingly, we
do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the Financial Statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform
procedures to conclude whether there is a material
misstatement of the Financial Statements or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report based on
these responsibilities.
With respect to the Strategic Report and Directors’ Report,
we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report
and Directors’ Report for the year ended 31 December 2022
is consistent with the Financial Statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group
and Parent Company and their environment obtained in
the course of the audit, we did not identify any material
misstatements in the Strategic Report and Directors’ Report.
184
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Independent Auditors’ Report to the Members
of St. James’s Place plc
continued
Directors’ Remuneration
In our opinion, the part of the The Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’ statements
in relation to going concern, longer-term viability and that
part of the corporate governance statement relating to the
Parent Company’s compliance with the provisions of the
UK Corporate Governance Code specified for our review.
Our additional responsibilities with respect to the corporate
governance statement as other information are described
in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
corporate governance statement is materially consistent
with the Financial Statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
The Directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are
being managed or mitigated;
The Directors’ statement in the Financial Statements
about whether they considered it appropriate to adopt
the going concern basis of accounting in preparing them,
and their identification of any material uncertainties to
the Group’s and Parent Company’s ability to continue
to do so over a period of at least twelve months from
the date of approval of the Financial Statements;
The Directors’ explanation as to their assessment of the
Group’s and parent company’s prospects, the period this
assessment covers and why the period is appropriate;
and
The Directors’ statement as to whether they have a
reasonable expectation that the Parent Company will
be able to continue in operation and meet its liabilities
as they fall due over the period of its assessment,
including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the
longer-term viability of the Group was substantially less in
scope than an audit and only consisted of making inquiries
and considering the Directors’ process supporting their
statement; checking that the statement is in alignment
with the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent
with the Financial Statements and our knowledge and
understanding of the Group and Parent Company and
their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of
our audit, we have concluded that each of the following
elements of the corporate governance statement is
materially consistent with the Financial Statements
and our knowledge obtained during the audit:
The Directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for the members to assess the Group’s and Parent
Company’s position, performance, business model
and strategy;
The section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems; and
The section of the Annual Report describing the work of
the Group Audit Committee.
We have nothing to report in respect of our responsibility to
report when the Directors’ statement relating to the Parent
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilities for the Financial Statements
and the audit
Responsibilities of the directors for the
Financial Statements
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the Financial Statements in accordance with
the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible
for such internal control as they determine is necessary to
enable the preparation of Financial Statements that are free
from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are
responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic
alternative but to do so.
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Financial Statements
Auditors’ responsibilities for the audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
Financial Statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the Group and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to corporate taxation, and
to UK and Irish regulatory principles, such as those governed
by the Prudential Regulation Authority, the Financial Conduct
Authority and the Central Bank of Ireland, and we considered
the extent to which non-compliance might have a material
effect on the Financial Statements. We also considered
those laws and regulations that have a direct impact on
the Financial Statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities
for fraudulent manipulation of the Financial Statements
(including the risk of override of controls), and determined
that the principal risks were related to risk of management
override of controls and risk of fraud in revenue recognition.
The Group engagement team shared this risk assessment
with the component auditors so that they could include
appropriate audit procedures in response to such risks in
their work. Audit procedures performed by the Group
engagement team and/or component auditors included:
Discussions with the Risk and Compliance function,
Internal Audit and the company’s legal counsel, including
consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
Reading the Group Audit Committee papers in which
whistle blowing matters are reported and considered the
impact of these matters on the Group’s compliance with
laws and regulations;
Reading key correspondence with the Prudential
Regulation Authority, the Financial Conduct Authority
and the Central Bank of Ireland in relation to compliance
with laws and regulations;
Reviewing relevant meeting minutes including those
of the Board, Group Risk and Group Audit Committees;
Reviewing data regarding customer complaints and
the company’s register of litigation and claims, in so
far as they related to non-compliance with laws and
regulations and fraud;
Identifying and testing journal entries, in particular
any journal entries posted with unusual account
combinations increasing reported revenues;
Designing audit procedures to incorporate unpredictability
around nature, timing or extent of our testing.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the Financial Statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete
populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically involves
selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target
particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from
which the sample is selected.
A further description of our responsibilities for the audit of
the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for
and only for the Parent Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act
2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly
agreed by our prior consent in writing.
186
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Independent Auditors’ Report to the Members
of St. James’s Place plc
continued
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
we have not obtained all the information and
explanations we require for our audit; or
adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
certain disclosures of Directors’ remuneration specified
by law are not made; or
the Parent Company Financial Statements and the part
of the The Directors’ Remuneration Report to be audited
are not in agreement with the accounting records
and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Group Audit
Committee, we were appointed by the Directors on
7 December 2009 to audit the Financial Statements for the
year ended 31 December 2009 and subsequent financial
periods. The period of total uninterrupted engagement
is 14 years, covering the years ended 31 December 2009
to 31 December 2022.
Other matter
As required by the Financial Conduct Authority Disclosure
Guidance and Transparency Rule 4.1.14R, these Financial
Statements form part of the ESEF-prepared annual financial
report filed on the National Storage Mechanism of the
Financial Conduct Authority in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditors’
report provides no assurance over whether the annual
financial report has been prepared using the single
electronic format specified in the ESEF RTS.
Gary Shaw (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
27 February 2023
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Financial Statements
Note
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Insurance premium income 33 .7 36 .5
Less premiums ceded to reinsurers (23.3 ) (23 . 2 )
Net insurance premium income 10.4 1 3.3
Fee and commission income 4 1 ,954 .2 2 , 7 37. 2
Investment return 6 (13, 771.9 ) 15,275.4
Net income (1 1 , 8 07. 3 ) 18,025.9
Policy claims and benefits
– Gross amount (4 8 . 0 ) (62 . 8 )
– Reinsurers’ share 14 .6 16. 9
Net policyholder claims and benefits incurred (33 . 4 ) (4 5 . 9 )
Change in insurance contract liabilities 14
– Gross amount 88.8 (9 . 7 )
– Reinsurers’ share (16.0 ) (9 . 9 )
Net change in insurance contract liabilities 72.8 (1 9 . 6 )
Movement in investment contract benefits 6 1 3 ,73 4 . 8 (1 5 , 1 8 6 . 7 )
Expenses 5 (1 , 9 6 6 . 2 ) (1 , 9 3 1 . 3 )
Profit before tax 3 0.7 8 42 . 4
Tax attributable to policyholders’ returns 7 501 .1 (4 8 8 . 6 )
Profit before tax attributable to shareholders’ returns 501 .8 353 . 8
Total tax credit/(charge) 7 4 04 .7 (55 4 . 8 )
Less: tax attributable to policyholders’ returns 7 (5 0 1 . 1 ) 48 8 .6
Tax attributable to shareholders’ returns 7 (9 6 . 4 ) (6 6 . 2 )
Profit and total comprehensive income for the year 405.4 2 8 7. 6
Profit attributable to non-controlling interests 0.4 0.9
Profit attributable to equity shareholders 405.0 28 6 .7
Profit and total comprehensive income for the year 405.4 2 8 7. 6
Pence Pence
Basic earnings per share 20 74 . 6 53.3
Diluted earnings per share 20 7 3.9 52. 5
The results relate to continuing operations.
The Notes and information on pages 192 to 254 form part of these Consolidated Financial Statements.
As permitted by section 408 of the Companies Act 2006, no Statement of Comprehensive Income is presented for
the Company.
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St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Consolidated Statement of Comprehensive Income
Note
Equity attributable to owners of the Parent Company
Non-
controlling
interests
Total
equity
Share
capital
Share
premium
Shares in
trust reserve
Misc.
reserves
Retained
earnings Total
£’Million £’Million £’Million £’Million £’Million £’Million £’Million £’Million
At 1 January 2021 80. 6 1 85 . 3 (1 4 . 8 ) 2. 5 859 . 4 1 ,11 3 .0 (0 . 9 ) 1 ,1 12 .1
Profit and total comprehensive
income for the year – – – – 28 6.7 28 6 .7 0 .9 2 8 7. 6
Dividends 20 – – – – (3 2 9 . 9 ) (3 2 9 . 9 ) – (3 2 9 . 9 )
Issue of share capital 20 0. 1 10. 2 – – – 10. 3 – 10. 3
Exercise of options 20 0. 4 18 . 3 – – – 18 .7 – 1 8 .7
Shares sold during the year – – 6 .3 – (6 . 3 ) – – –
Retained earnings credit in
respect of share option charges – – – – 20.4 20. 4 – 20. 4
At 31 December 2021 81.1 213.8 (8 . 5 ) 2 .5 830. 3 1,119. 2 – 1 ,119. 2
Profit and total comprehensive
income for the year – – – – 4 05.0 405.0 0.4 405.4
Dividends 20 – – – – (3 03 . 6 ) (3 0 3 . 6 ) (0 . 3 ) (3 0 3 . 9 )
Issue of share capital 20 0.1 5.6 – – – 5 .7 – 5 .7
Exercise of options 20 0.4 8.4 – – – 8.8 – 8.8
Consideration paid for own
shares – – (0 . 3 ) – – (0 . 3 ) – (0 . 3 )
Shares sold during the year – – 4 .7 – (4 . 7 ) – – –
Retained earnings credit in
respect of share option charges – – – – 20.5 20. 5 – 20.5
Non-controlling interests
arising on the part-disposal
of subsidiaries – – – – 4.9 4 .9 0.1 5.0
At 31 December 2022 81.6 2 2 7. 8 (4 . 1 ) 2 .5 952 . 4 1, 26 0. 2 0.2 1 ,2 60. 4
The number of shares held in the Shares in trust reserve is given in Note 20 Share capital, earnings per share and dividends.
Miscellaneous reserves represent other non-distributable reserves.
The Notes and information on pages 192 to 254 form part of these Consolidated Financial Statements.
189
Strategic Report Governance Other Information
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Financial Statements
Consolidated Statement of Changes in Equity
Note
As at
31 December
2022
As at
31 December
2021
£’Million £’Million
Assets
Goodwill 8 33.6 29 .6
Deferred acquisition costs 8 33 7. 3 379.6
Intangible assets
– Purchased value of in-force business 8 11. 2 14 . 4
– Computer software 8 33.3 2 7. 0
Property and equipment 9 14 5.7 154 . 5
Deferred tax assets 7 13.9 20 .6
Investment in associates 1.4 1.4
Reinsurance assets 14 66. 4 82. 4
Other receivables 12 2,9 82. 8 2,92 3.0
Income tax assets 35.0 –
Investments
– Investment property 11 1, 29 4 .5 1 , 568 . 5
– Equities 11 103, 536 .0 10 6 ,782 . 3
– Fixed income securities 11 2 7, 5 5 2 . 7 29,305.9
– Investment in Collective Investment Schemes 11 5, 73 5.4 5,513.2
– Derivative financial instruments 11 3,493.0 1, 09 4 .6
Cash and cash equivalents 11 6, 4 32 . 8 7, 8 3 2 . 9
Total assets 151,70 5 .0 155,729. 9
Liabilities
Borrowings 16 163. 8 4 3 3. 0
Deferred tax liabilities 7 162 . 9 649 . 8
Insurance contract liabilities 14 483 .5 572 . 3
Deferred income 8 530. 4 562 . 6
Other provisions 15 46 .0 4 4 . 1
Other payables 13 2,198.6 2 , 604 . 5
Investment contract benefits 11 106,964.7 110,349.8
Derivative financial instruments 11 3,26 6.3 1, 019 .5
Net asset value attributable to unit holders 11 36 ,628 .4 38 , 3 69. 0
Income tax liabilities – 6 .1
Total liabilities 150, 444 .6 154 ,610.7
Net assets 1, 260. 4 1 ,11 9. 2
Shareholders’ equity
Share capital 20 81 .6 81 . 1
Share premium 2 2 7. 8 21 3 . 8
Shares in trust reserve (4 . 1 ) (8 . 5 )
Miscellaneous reserves 2.5 2. 5
Retained earnings 952 . 4 83 0. 3
Equity attributable to owners of the Parent Company 1, 2 60. 2 1, 119. 2
Non-controlling interests 0.2 –
Total equity 1 , 260. 4 1 , 119 . 2
Pence Pence
Net assets per share 2 31 .6 2 0 7. 1
The Consolidated Financial Statements on pages 188 to 254 were approved by the Board of Directors on 27 February 2023
and signed on its behalf by:
Andrew Croft, Chief Executive Craig Gentle, Chief Financial Officer
The Notes and information on pages 192 to 254 form part of these Consolidated Financial Statements.
190
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Consolidated Statement of Financial Position
Note
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Cash flows from operating activities
Cash (used in)/generated from operations 18 (9 7 5 . 1 ) 1 ,74 1 . 0
Interest received 61 . 8 1 9. 2
Interest paid (1 2 . 4 ) (1 0 . 2 )
Income taxes paid 7 (1 2 1 . 1 ) (3 1 9 . 1 )
Contingent consideration (6 . 3 ) (1 . 3 )
Net cash (outflow)/inflow from operating activities (1 , 0 5 3 . 1 ) 1,42 9. 6
Cash flows from investing activities
Payments for property and equipment 9 (4 . 0 ) (3 . 4 )
Payment of software development costs 8 (1 6 . 1 ) (1 9. 2 )
Payments for acquisition of subsidiaries and other business combinations, net of cash
acquired (1 3 . 9 ) (6 . 6 )
Proceeds from sale of shares in subsidiaries and other business combinations, net of
cash disposed 4.0 4 .1
Proceeds from sale of financial assets held at amortised cost 262. 5 –
Net cash inflow/(outflow) from investing activities 232 .5 (2 5 . 1 )
Cash flows from financing activities
Proceeds from the issue of share capital and exercise of options 8.8 1 8 .7
Consideration paid for own shares (0 . 3 ) –
Proceeds from borrowings 16 204 .0 5 76 . 4
Repayment of borrowings 16 (47 5 . 3 ) (4 8 6 . 1 )
Principal elements of lease payments 10 (1 3 . 8 ) (1 0 . 7 )
Dividends paid to Company’s shareholders 20 (30 3 . 6 ) (3 2 9 . 9 )
Dividends paid to non-controlling interests in subsidiaries (0 . 3 ) –
Net cash (outflow) from financing activities (580.5 ) (2 31 . 6 )
Net (decrease)/increase in cash and cash equivalents (1 , 4 0 1 . 1 ) 1 ,1 72. 9
Cash and cash equivalents at 1 January 11 7, 8 32 . 9 6,660.1
Effects of exchange rate changes on cash and cash equivalents 1.0 (0 . 1 )
Cash and cash equivalents at 31 December 11 6,432 .8 7, 8 32 . 9
The Notes and information on pages 192 to 254 form part of these Consolidated Financial Statements.
191
Strategic Report Governance Other Information
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Financial Statements
Consolidated Statement of Cash Flows
192
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
254
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Parent Company Financial
Statements under Financial
Reporting Standard 101
Parent Company Statement
of Financial Position 256
Parent Company Statement
of Changes in Equity 257
Notes to the Parent Company
Financial Statements 258
www.sjp.co.uk
255
Other InformationStrategic Report Governance
Financial Statements
Note
As at
31 December
2022
As at
31 December
2021
£’Million £’Million
Investment in subsidiaries 2 1,378.8 1,212.8
Current assets
Amounts owed by Group undertakings 6 283.9 281.1
Cash and cash equivalents 0.1 0.1
Current liabilities
Corporation tax liabilities (1.7) (2.2)
Other payables (0.1) (0.1)
Net current assets 282.2 278.9
Net assets 1,661.0 1,491.7
Equity
Share capital 3 81.6 81.1
Share premium 227.8 213.8
Share option reserve 274.1 253.6
Miscellaneous reserves 0.1 0.1
Retained earnings 1,077.4 943.1
Total shareholders’ funds 1,661.0 1,491.7
In publishing the Parent Company Financial Statements, the Company has taken advantage of the exemption in section 408
of the Companies Act 2006 not to present its individual income statement and related notes that form part of these Parent
Company Financial Statements. The Company is not required to present a Statement of Comprehensive Income. The
Company’s profit after tax for the financial year was £437.9 million (2021: £318.3 million) which can be seen in the Statement
of Changes in Equity.
The Parent Company Financial Statements were approved by the Board of Directors on 27 February 2023 and signed on its
behalf by:
Andrew Croft, Chief Executive Craig Gentle, Chief Financial Officer
The Notes and information on pages 258 to 261 form part of these Parent Company Financial Statements.
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Financial Statements
Parent Company Statement of Financial Position
Registered number: 03183415
Note
Share
capital
Share
premium
Share option
reserve
Miscellaneous
reserves
Retained
earnings
Total
shareholders’
funds
£’Million £’Million £’Million £’Million £’Million £’Million
At 1 January 2021 80.6 185.3 233.2 0.1 954.7 1453.9
Profit and total comprehensive
income for the year – – – – 318.3 318.3
Dividends 5 – – – – (329.9) (329.9)
Issue of share capital 0.1 10.2 – – – 10.3
Exercise of options 3 0.4 18.3 – – – 18.7
Cost of share options expensed
in subsidiaries – – 20.4 – – 20.4
At 31 December 2021 81.1 213.8 253.6 0.1 943.1 1,491.7
Profit and total comprehensive
income for the year – – – – 437.9 437.9
Dividends 5 – – – – (303.6) (303.6)
Issue of share capital 0.1 5.6 – – – 5.7
Exercise of options 3 0.4 8.4 – – – 8.8
Cost of share options expensed
in subsidiaries – – 20.5 – – 20.5
At 31 December 2022 81.6 227.8 274.1 0.1 1,077.4 1,661.0
The Notes and information on pages 258 to 261 form part of these Parent Company Financial Statements.
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Financial Statements
Parent Company Statement of Changes in Equity
1. Accounting policies
Basis of preparation
St. James’s Place plc (the Company) is a public company limited by shares which is incorporated and registered in England
and Wales, domiciled in the United Kingdom and whose shares are publicly traded. The Company offers a range of insurance,
investment and other wealth management services through its subsidiaries, which are incorporated in the UK, Ireland and Asia.
The Financial Statements have been prepared under the historical cost convention, on a going concern basis and in
accordance with Financial Reporting Standard 101 (FRS 101) Reduced Disclosure Framework and the Companies Act 2006
as applicable to companies using FRS 101.
The preparation of these Financial Statements in compliance with FRS 101 requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in applying the Company’s accounting policies. No significant
accounting judgements have been made.
Adoption of new and amended accounting standards
There were no new or amended accounting standards adopted as of 1 January 2022.
FRS 101 – Reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information
in respect of paragraph 79(a)(iv) of IAS 1;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation
of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related-party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such
a member; and
the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets,
provided that equivalent disclosures are included in the Consolidated Financial Statements of the group in which the
entity is consolidated.
Going concern
The Company is a non-trading investment holding company which has positive net assets. Going concern has been evaluated
by the Directors of the Company. As part of this the Directors have reviewed and take comfort from the Group’s assessment of
going concern as set out in Note 1 to the Consolidated Financial Statements. The Board believes the Company will continue to
be in business, with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors
pursuant to laws or regulations for a period of at least 12 months from the date of approval of the Company Financial
Statements. As a result, the Company continues to adopt the going concern basis in preparing these Financial Statements.
Significant accounting policies
The following principal accounting policies have been applied consistently to all the years presented.
(a) Investment return
Investment return comprises dividends from subsidiaries. Interim dividends are accounted for when received. Final dividends
are accounted for when the dividend has been declared and approved by the subsidiary.
(b) Taxation
Taxation is based on profits and income for the year as determined in accordance with the relevant tax legislation,
together with adjustments to provisions for prior years.
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St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Notes to the Parent Company Financial Statements
(c) Investment in subsidiaries
Investments in subsidiaries are carried at cost stated after any impairment losses, plus the cost of equity-settled share
awards granted by the Company of its own shares.
(d) Receivables
Receivables are initially recognised at fair value and subsequently held at amortised cost less impairment losses.
Financial assets held at amortised cost are impaired using an expected credit loss model. Expected credit losses are
based on the historic levels of loss experienced for the relevant financial assets, with due consideration given to forward-
looking information.
The most significant category of financial assets held at amortised cost for the Company is amounts owed by Group
undertakings. The significant increase in credit risk which triggers the move from performing to underperforming for these
assets is when they are more than 30 days past due, in line with the presumption set out in IFRS 9 Financial Instruments.
(e) Amounts owed by Group undertakings
Amounts owed by Group undertakings initially are recognised at fair value and subsequently held at amortised cost,
as the business model for these assets is hold to collect contractual cash flows, which consist solely of payments of
principal and interest.
2. Investment in subsidiaries
Cost
Share
awards
Impairment
provision
Net book
value
£’Million £’Million £’Million £’Million
At 1 January 2021 353.0 233.2 (181.8) 404.4
Share awards granted – 20.4 – 20.4
Share capital injection 8.0 – – 8.0
Capital contribution 780.0 – – 780.0
At 31 December 2021 1,141.0 253.6 (181.8) 1,212.8
Share awards granted – 20.5 – 20.5
Share capital injection 9.0 – – 9.0
Capital contribution 136.5 – – 136.5
At 31 December 2022 1,286.5 274.1 (181.8) 1,378.8
The investment in subsidiaries’ net book value is broken down as follows:
31 December
2022
31 December
2021
£’Million £’Million
St. James’s Place Wealth Management Group Limited 1,004.1 867.6
St. James’s Place DFM Holdings Limited 100.6 91.6
Directly held investments 1,104.7 959.2
St. James’s Place Management Services Limited 205.9 186.7
St. James’s Place Wealth Management plc 62.1 62.2
Rowan Dartington & Co. Limited 5.0 4.3
St. James’s Place International plc 0.8 0.2
Stafford House Investments Limited 0.2 0.2
Technical Connection Limited 0.1 –
Investments held due to share awards granted 274.1 253.6
Total 1,378.8 1,212.8
During the year the Company made a capital contribution of £136.5 million (2021: £780.0 million) to St. James’s Place Wealth
Management Group Limited.
The carrying value is reviewed at least annually for impairment, or when circumstances or events indicate there may
be uncertainty over its value. The investments are supported by the value in use of the subsidiaries. The key assumptions
used are the value of in-force business together with a discount rate of 7.0% (2021: 3.4%). It is considered that any reasonably
possible levels of change in the key assumptions would not result in an impairment.
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Financial Statements
3. Share capital
Number of
ordinary shares
Called-up
share capital
£’Million
At 1 January 2021 537,343,466 80.6
– Issue of shares 850,985 0.1
– Exercise of options 2,336,078 0.4
At 31 December 2021 540,530,529 81.1
– Issue of shares 459,028 0.1
– Exercise of options 3,246,200 0.4
At 31 December 2022 544,235,757 81.6
Ordinary shares have a par value of 15 pence per share (2021: 15 pence per share) and are fully paid. The Company received
consideration of £8.8 million (2021: £18.7 million) for the shares issued during the year, including those issued to satisfy the
exercise of options.
4. Auditors’ remuneration
The total audit fee in respect of the Group is set out in Note 5 to the Consolidated Financial Statements. The audit fee
charged to the Company for the year ended 31 December 2022 is £30,487 (2021: £25,512), which is borne by another entity
within the Group.
5. Dividends
The following dividends have been paid by the Company:
Year ended
31 December
2022
Year ended
31 December
2021
Year ended
31 December
2022
Year ended
31 December
2021
Pence per
share
Pence per
share £’Million £’Million
Withheld 2019 dividend – 11.22 – 60.3
Final dividend in respect of 2020 – 38.49 – 207.2
Interim dividend in respect of 2021 – 11.55 – 62.4
Final dividend in respect of 2021 40.41 – 218.9 –
Interim dividend in respect of 2022 15.59 – 84.7 –
Total dividends 56.00 61.26 303.6 329.9
In respect of 2022 the Directors have recommended a 2022 final dividend of 37.19 pence per share. This amounts to
£202.4 million and will, subject to shareholder approval at the Annual General Meeting, be paid on 31 May 2023 to those
shareholders on the register as at 5 May 2023.
6. Related-party transactions and balances
At the year-end the following related party balances existed, in addition to the investments in subsidiaries which are set out
in Note 2 above.
31 December
2022
31 December
2021
£’Million £’Million
Amounts owed by Group undertakings
St. James’s Place Partnership Services Limited 283.9 281.1
Total 283.9 281.1
The amounts owed by Group undertakings are loans granted by the Company which are unsecured and repayable on
demand. The loans incur interest at an agreed rate above the Bank of England’s base rate, as stated in the loan agreements.
Amounts owed by Group undertakings continue to be classified as performing; see accounting policy (d).
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St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Notes to the Parent Company Financial Statements continued
During the year, the Company received £431.0 million (2021: £309.0 million) of dividends from subsidiary undertakings.
The total value of St. James’s Place FUM held by related parties of the Company as at 31 December 2022 was £41.1 million
(2021: £35.4 million). The total value of dividends paid to related parties of the Company during the year was £0.8 million
(2021: £0.9 million).
The following wholly-owned subsidiaries of St. James’s Place plc have taken advantage of the exemption from statutory
audit granted by section 479A of the Companies Act 2006. In accordance with section 479C, St. James’s Place plc has
therefore guaranteed all the outstanding liabilities as at 31 December 2022 of:
Baxter & Lindley Financial Services Limited 02307706
Baxter Holding Company Limited 09805128
Cabot Portfolio Nominees Limited 03636010
CGA Financial & Investment Services Limited 02666180
Dartington Portfolio Nominees Limited 01489542
Future Proof Limited 07608319
JEWM Ltd 09229694
Lewington Wealth Management Limited 04290504
Linden House Financial Services Limited 02990295
M.H.S. (Holdings) Limited 00559995
Perennial Financial Management Limited 04609753
Reflect Financial Limited 04373946
Richard Barnes Wealth Management Limited 06320112
Rowan Dartington Holdings Limited 07470226
SJP Legacy Holdings Ltd SC492906
St. James’s Place (PCP) Limited 02706684
St. James’s Place Acquisition Services Limited 07730835
St. James’s Place Corporate Secretary Limited 09131866
St. James’s Place DFM Holdings Limited 09687687
St. James’s Place International Distribution Limited 08798683
St. James’s Place Nominees Limited 08764214
Stafford House Investments Limited 03866935
Technical Connection Limited 03178474
Thompson Private Clients Limited 11258200
Tring Financial Management Limited 05487108
Virtue Money Limited SC346827
7. Directors’ emoluments
The Directors’ responsibilities relate primarily to the trading companies of the Group and accordingly their costs are charged
to those companies and none are met by the Parent Company. Disclosure of the Directors’ emoluments is made within the
Directors’ Remuneration Report.
8. Company information
In the opinion of the Directors there is not considered to be any ultimate controlling party. Copies of the Consolidated
Financial Statements of St. James’s Place plc may be obtained from the Company Secretary, St. James’s Place plc,
St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire GL7 1FP, United Kingdom.
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Financial Statements
Supplementary Information:
Consolidated Financial Statements
on a Cash result basis (unaudited)
Consolidated Statement
of Comprehensive Income on
a Cash result basis (unaudited) 263
Consolidated Statement
of Changes in Equity on
a Cash result basis (unaudited) 264
Consolidated Statement
of Financial Position on
a Cash result basis (unaudited) 265
Notes to the Consolidated
Financial Statements on
a Cash result basis (unaudited) 266
St. James’s Place plc Annual Report and Accounts 2022
262
Note
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Fee and commission income 1,854.2 2,771.4
Investment return 6 29.1 35.9
Net income 1,883.3 2,807.3
Expenses (1,898.9) (1,858.1)
(Loss)/Profit before tax (15.6) 949.2
Tax attributable to policyholders’ returns 501.1 (488.6)
Tax attributable to shareholders’ returns (75.4) (73.2)
Total Cash result for the year 410.1 387.4
Pence Pence
Cash result basic earnings per share III 75.6 72.0
Cash result diluted earnings per share III 74.9 70.9
The Note references above cross-refer to the Notes to the Consolidated Financial Statements under IFRS, except where
denoted in Roman numerals.
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Financial Statements
Consolidated Statement of Comprehensive Income
on a Cash result basis (unaudited)
Note
Equity attributable to owners of the Parent Company
Share
capital
Share
premium
Shares in
trust reserve
Misc.
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
£’Million £’Million £’Million £’Million £’Million £’Million £’Million £’Million
At 1 January 2021 80.6 185.3 (14.8) 2.5 965.9 1,219.5 (0.9) 1,218.6
Cash result for the year – – – – 386.5 386.5 0.9 387.4
Dividends 20 – – – – (329.9) (329.9) – (329.9)
Issue of share capital 0.1 10.2 – – – 10.3 – 10.3
Exercise of options 20 0.4 18.3 – – – 18.7 – 18.7
Shares sold during the year – – 6.3 – (6.3) – – –
Change in deferred tax – – – – 0.5 0.5 – 0.5
Impact of policyholder tax
asymmetry – – – – (52.9) (52.9) – (52.9)
Change in goodwill, intangibles
and other non-cash movements – – – – (7.4) (7.4) – (7.4)
At 31 December 2021 81.1 213.8 (8.5) 2.5 956.4 1,245.3 – 1,245.3
Cash result for the year – – – – 409.7 409.7 0.4 410.1
Dividends 20 – – – – (303.6) (303.6) (0.3) (303.9)
Issue of share capital 0.1 5.6 – – – 5.7 – 5.7
Exercise of options 20 0.4 8.4 – – – 8.8 – 8.8
Consideration paid for own
shares – – (0.3) – – (0.3) – (0.3)
Shares sold during the year – – 4.7 – (4.7) – – –
Non-controlling interests arising
on the part-disposal of
subsidiaries – – – – 4.9 4.9 0.1 5.0
Change in deferred tax – – – – (30.5) (30.5) – (30.5)
Impact of policyholder tax
asymmetry – – – – 50.6 50.6 – 50.6
Change in goodwill, intangibles
and other non-cash movements – – – – (10.9) (10.9) – (10.9)
At 31 December 2022 81.6 227.8 (4.1) 2.5 1,071.9 1,379.7 0.2 1,379.9
The Note references above cross-refer to the Notes to the Consolidated Financial Statements under IFRS.
264
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Consolidated Statement of Changes in Equity
on a Cash result basis (unaudited)
Note
31 December
2022
31 December
2021
£’Million £’Million
Assets
Property and equipment 9 145.7 154.5
Deferred tax assets 2.5 5.0
Investment in associates 1.4 1.4
Other receivables 1,374.8 1,587.6
Income tax assets 35.0 –
Fixed income securities 17 7.9 7.8
Investment in Collective Investment Schemes 17 1,271.7 1,605.3
Cash and cash equivalents 17 253.3 245.7
Total assets 3,092.3 3,607.3
Liabilities
Borrowings 16 163.8 433.0
Deferred tax liabilities 165.1 624.4
Other provisions 15 46.0 44.1
Other payables 1,337.5 1,254.4
Income tax liabilities – 6.1
Total liabilities 1,712.4 2,362.0
Net assets 1,379.9 1,245.3
Shareholders’ equity
Share capital 20 81.6 81.1
Share premium 227.8 213.8
Shares in trust reserve (4.1) (8.5)
Miscellaneous reserves 2.5 2.5
Retained earnings 1,071.9 956.4
Shareholders’ equity 1,379.7 1,245.3
Non-controlling interests 0.2 –
Total shareholders’ equity on a Cash result basis 1,379.9 1,245.3
Pence Pence
Net assets per share 253.6 230.4
The Note references above cross-refer to the Notes to the Consolidated Financial Statements under IFRS.
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Financial Statements
Consolidated Statement of Financial Position
on a Cash result basis (unaudited)
I. Basis of preparation
The Consolidated Financial Statements on a Cash result basis have been prepared by adjusting the Financial Statements
prepared in accordance with International Financial Reporting Standards adopted by the UK for items which do not reflect
the cash emerging from the business. The adjustments are as follows:
1. Unit liabilities and net assets held to cover unit liabilities, as set out in Note 11 to the Consolidated Financial Statements,
are policyholder balances which are removed in the Statement of Financial Position on a Cash result basis. No adjustment
for payments in or out is required in the Statement of Comprehensive Income as this business is subject to deposit
accounting, which means that policyholder deposits and withdrawals are recognised in the Statement of Financial
Position under IFRS, with only marginal cash flows attributable to shareholders recognised in the Statement of
Comprehensive Income. However, adjustment is required for the investment return and the movement in investment
contract liabilities, which are offsetting and are both zero-ised.
2. Deferred acquisition costs, the purchased value of in-force business and deferred income assets and liabilities are
removed from the Statement of Financial Position on a Cash result basis, and the amortisation of these balances is
removed from the Statement of Comprehensive Income on a Cash result basis. The assets, liabilities and amortisation
are set out in Note 8 to the Consolidated Financial Statements.
3. Share-based payment expense is removed from the Statement of Comprehensive Income on a Cash result basis,
and the equity and liability balances for equity-settled and cash-settled share-based payment schemes respectively
are removed from the Statement of Financial Position on a Cash result basis. Share-based payment balances are set
out in Note 21 to the Consolidated Financial Statements.
4. Non-unit-linked insurance contract liabilities and reinsurance assets, as set out in Note 14 to the Consolidated Financial
Statements, are removed from the Statement of Financial Position on a Cash result basis. The movement in these
balances is removed from the Statement of Comprehensive Income on a Cash result basis.
5. Goodwill, computer software intangible assets and some other assets and liabilities which are inadmissible under the
Solvency II regime are removed from the Statement of Financial Position on a Cash result basis; however, the movements
in these figures are included in the Statement of Comprehensive Income on a Cash result basis.
6. Deferred tax assets and liabilities are adjusted in the Statement of Financial Position on a Cash result basis to reflect the
adjustments noted above and other discounting differences between tax charges and IFRS accounting. However, the
impact of movements in deferred tax assets and liabilities are not included in the Statement of Comprehensive Income
on a Cash result basis.
266
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Notes to the Consolidated Financial Statements
on a Cash result basis (unaudited)
II. Reconciliation of the IFRS Balance Sheet to the Cash Balance Sheet
The Solvency II Net Assets (or Cash) Balance Sheet is based on the IFRS Consolidated Statement of Financial Position, with
adjustments made to accounting assets and liabilities to reflect the Solvency II regulations and the provision for insurance
liabilities set to be equal to the associated unit liabilities.
The reconciliation of the IFRS Consolidated Statement of Financial Position and Solvency II Net Assets Balance Sheet as at
31 December 2022 is set out in Section 2.2 of the financial review. The reconciliation as at 31 December 2021 is set out below.
31 December 2021
IFRS
Balance Sheet Adjustment 1 Adjustment 2
Solvency II
Net Assets
Balance Sheet
£’Million £’Million £’Million £’Million
Assets
Goodwill 29.6 – (29.6) –
Deferred acquisition costs 379.6 – (379.6) –
Purchased value of in-force business 14.4 – (14.4) –
Computer software 27.0 – (27.0) –
Property and equipment 154.5 – – 154.5
Deferred tax assets 20.6 – (15.6) 5.0
Investment in associates 1.4 – – 1.4
Reinsurance assets 82.4 – (82.4) –
Other receivables 2,923.0 (1,332.4) (3.0) 1,587.6
Investment property 1,568.5 (1,568.5) – –
Equities 106,782.3 (106,782.3) – –
Fixed income securities 29,305.9 (29,298.1) – 7.8
Investment in Collective Investment Schemes 5,513.2 (3,907.9) – 1,605.3
Derivative financial instruments 1,094.6 (1,094.6) – –
Cash and cash equivalents 7,832.9 (7,587.2) – 245.7
Total assets 155,729.9 (151,571.0) (551.6) 3,607.3
Liabilities
Borrowings 433.0 – – 433.0
Deferred tax liabilities 649.8 – (25.4) 624.4
Insurance contract liabilities 572.3 (487.8) (84.5) –
Deferred income 562.6 – (562.6) –
Other provisions 44.1 – – 44.1
Other payables 2,604.5 (1,344.9) (5.2) 1,254.4
Investment contract benefits 110,349.8 (110,349.8) – –
Derivative financial instruments 1,019.5 (1,019.5) – –
Net asset value attributable to unit holders 38,369.0 (38,369.0) – –
Income tax liabilities 6.1 – – 6.1
Total liabilities 154,610.7 (151,571.0) (677.7) 2,362.0
Net assets 1,119.2 – 126.1 1,245.3
Adjustment 1 nets out the policyholder interest in unit-linked assets and liabilities.
Adjustment 2 comprises adjustments to the IFRS Statement of Financial Position in line with Solvency II requirements,
including removal of DAC, DIR, PVIF and their associated deferred tax balances, as well as goodwill and other intangibles.
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Financial Statements
III. Cash result earnings per share
Year ended
31 December
2022
Year ended
31 December
2021
£’Million £’Million
Cash result earnings
Cash result (for both basic and diluted EPS) 410.1 387.4
Million Million
Weighted average number of shares
Weighted average number of ordinary shares in issue (for basic EPS) 542.7 537.7
Adjustments for outstanding share options 5.1 8.5
Weighted average number of ordinary shares (for diluted EPS) 547.8 546.2
Pence Pence
Cash result earnings per share (EPS)
Cash result basic earnings per share 75.6 72.0
Cash result diluted earnings per share 74.9 70.9
268
St. James’s Place plc Annual Report and Accounts 2022
Financial Statements
Notes to the Consolidated Financial Statements
on a Cash result basis (unaudited)
continued
Other
Information
Shareholder information 270
How to contact us and advisers 271
Glossary of alternative
performance measures 272
Glossary of terms 275
269
Other Information
Financial StatementsGovernanceStrategic Report
We listen and respond
The St. James’s Place business has a broad range of stakeholders, and our duties to them are reflected in our strategy which
has a fundamental and clear focus on each stakeholder, including our employees, the Partnership, our clients, shareholders,
third-party suppliers, regulators and wider society. This section provides information of particular interest to shareholders,
such as the financial calendar, information about our locations and how stakeholders can contact us, and two glossaries
which provide further information on our alternative performance measures and an explanation of key terms to assist
stakeholders in understanding the Annual Report and Accounts.
Analysis of shareholder holdings
Analysis by number of shares Holders Percentage Shares held Percentage
1–999 2,059 45.53% 731,928 0.13%
1,000–9,999 1,646 36.40% 4,969,926 0.91%
10,000–99,999 492 10.88% 16,792,207 3.09%
100,000 and above 325 7.19% 521,741,696 95.87%
4,522 100.00% 544,235,757 100.00%
2023 financial calendar
Announcement of first-quarter new business 27 April 2023
Ex-dividend date for 2022 final dividend 4 May 2023
Record date for 2022 final dividend 5 May 2023
Annual General Meeting 18 May 2023
Payment date for 2022 final dividend 31 May 2023
Announcement of Interim Results and second-quarter new business 27 July 2023
Ex-dividend date for 2023 interim dividend 24 August 2023
Record date for 2023 interim dividend 25 August 2023
Payment date for 2023 interim dividend 22 September 2023
Announcement of third-quarter new business 19 October 2023
The above dates are subject to change and further information on the 2023 financial calendar can be found on the
Company’s website, at www.sjp.co.uk/shareholders/financial-calendar.
Dividend Reinvestment Plan
If you would prefer to receive new shares instead of cash dividends, please complete a Dividend Reinvestment Plan
(DRIP) form, which is available from our Registrars, Computershare Investor Services PLC. Their contact details are overleaf.
Dividend mandate
Shareholders can arrange to have their dividends paid directly into their bank or building society account by completing
a bank mandate form. The advantages to using this service are: the payment is more secure than sending a cheque through
the post; it avoids the inconvenience of paying in a cheque; and it reduces the risk of lost, stolen or out-of-date cheques.
A mandate form can be obtained from Computershare or you will find one on the reverse of your last dividend confirmation.
Share dealing
A telephone share dealing service has been established with the Registrars, Computershare Investor Services PLC, which
provides shareholders with a simple way of buying or selling St. James’s Place plc shares on the London Stock Exchange.
If you are interested in this service, telephone +44 (0370) 702 0197.
An internet share dealing service is also available. Further information about share dealing services can be obtained
by logging on to: www-uk.computershare.com/Investor/#ShareDealingInfo.
Electronic communications
If you would like to have access to shareholder communications such as the Annual Report and the Notice of General
Meeting through the internet rather than receiving them by post, please register at www.investorcentre.co.uk/ecomms.
270
St. James’s Place plc Annual Report and Accounts 2022
Other Information
Shareholder information
How to contact us
Registered office
Tel: 01285 640302
www.sjp.co.uk
Chair
Paul Manduca
Email: chair@sjp.co.uk
Chief Executive
Andrew Croft
Email: andrew.croft@sjp.co.uk
Chief Financial Officer
Craig Gentle
Email: craig.gentle@sjp.co.uk
Company Secretary
Jonathan Dale
Email: jonathan.dale@sjp.co.uk
Customer service
Jared Whitehouse
Tel: 01285 717006
Email: jared.whitehouse@sjp.co.uk
Analyst enquiries
Hugh Taylor
Tel: 020 7514 1963
Email: hugh.taylor@sjp.co.uk
Media enquiries
Jamie Dunkley
Tel: 020 7514 1963
Email: jamie.dunkley@sjp.co.uk
Brunswick Group
Eilis Murphy/Charles Pretzlik
Tel: 020 7404 5959
Email: sjp@brunswickgroup.com
Advisers
Registrar and transfer office
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Email: webqueries@computershare.co.uk
Tel: 0370 702 0197
www.investorcentre.co.uk/contactus
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
2 Glass Wharf
Bristol
BS2 0FR
Brokers
JPMorgan Cazenove Limited
25 Bank Street
London
E14 5JP
Bank of America Securities Incorporated
2 King Edward Street
London
EC1A 1HQ
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Other Information
How to contact us and advisers
Within the Annual Report and Accounts various alternative performance measures (APMs) are disclosed.
An APM is a measure of financial performance, financial position or cash flows which is not defined by the relevant financial
reporting framework, which for the Group is International Financial Reporting Standards as adopted by the UK (adopted
IFRSs). APMs are used to provide greater insight into the performance of the Group and the way it is managed by the
Directors. The table below defines each APM, explains why it is used and, if applicable, details where the APM has been
reconciled to IFRS:
Financial-position-related APMs
APM Definition Why is this measure used?
Reconciliation
to the Financial Statements
Solvency II net
assets
Based on IFRS Net Assets, but with the
following adjustments:
1. Reflection of the recognition requirements
of the Solvency II regulations for assets and
liabilities. In particular this removes deferred
acquisition costs (DAC), deferred income
(DIR), purchased value of in-force (PVIF)
and their associated deferred tax balances,
other intangibles and some other small
items which are treated as inadmissible
from a regulatory perspective; and
2. Adjustment to remove the matching
client assets and the liabilities as these
do not represent shareholder assets.
No adjustment is made to deferred tax,
except for that arising on DAC, DIR and PVIF,
as this is treated as an allowable asset in
the Solvency II regulation.
Our ability to satisfy our liabilities to clients,
and consequently our solvency, is central to
our business. By removing the liabilities which
are fully matched by assets, this presentation
allows the reader to focus on the business
operation. It also provides a simpler
comparison with other wealth management
companies.
Refer to page 80.
Total embedded
value
A discounted cash flow valuation
methodology, assessing the long-term
economic value of the business.
Our embedded value is determined in line
with the EEV principles originally set out
by the Chief Financial Officers (CFO) Forum
in 2004, and amended for subsequent
changes to the principles, including
those published in April 2016, following
the implementation of Solvency II.
Life business and wealth management
business differ from most other businesses,
in that the expected shareholder income
from the sale of a product emerges over
a long period in the future. We therefore
supplement the IFRS and Cash results by
providing additional disclosure on an
embedded value basis, which brings into
account the net present value of expected
future cash flows, as we believe that a
measure of the total economic value of the
Group is useful to investors.
Not applicable.
EEV net asset
value (NAV) per
share
EEV net asset value per share is calculated
as the EEV net assets divided by the
year-end number of ordinary shares.
Total embedded value provides a measure
of total economic value of the Group, and
assessing the EEV NAV per share allows
analysis of the overall value of the Group
by share.
Not applicable.
IFRS NAV per
share
IFRS net asset value per share is calculated
as the IFRS net assets divided by the
year-end number of ordinary shares.
Total IFRS net assets provides a measure of
value of the Group, and assessing the IFRS
NAV per share allows analysis of the overall
value of the Group by share.
Not applicable.
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St. James’s Place plc Annual Report and Accounts 2022
Other Information
Glossary of alternative performance measures
Financial-performance-related APMs
APM Definition Why is this measure used?
Reconciliation
to the Financial Statements
Cash result, and
Underlying cash
result
The Cash result is defined as the movement
between the opening and closing Solvency
II net assets adjusted as follows:
1. The movement in deferred tax is removed
to reflect just the cash realisation from the
deferred tax position;
2. The movements in goodwill and other
intangibles are excluded; and
3. Other changes in equity, such as
dividends paid in the year and equity-
settled share option costs, are excluded.
The Underlying cash result reflects the
regular emergence of cash from the
business, excluding any items of a one-off
nature and temporary timing differences.
The Cash result reflects all other cash items,
including items of a one-off nature and
temporary timing differences.
Neither the Cash result nor the Underlying
cash result should be confused with the
IFRS Consolidated Statement of Cash Flows
which is prepared in accordance with IAS 7.
IFRS income statement methodology
recognises non-cash items such as deferred
tax and equity-settled share options.
By contrast, dividends can only be paid to
shareholders from appropriately fungible
assets. The Board therefore uses the Cash
results to monitor the level of cash generated
by the business.
While the Cash result gives an absolute
measure of the cash generated in the year,
the Underlying cash result is particularly
useful for monitoring the expected long-term
rate of cash emergence, which supports
dividends and sustainable dividend growth.
Refer to section 2.1
and 2.2 of the
financial review and
also see Note 3 to
the Consolidated
Financial Statements.
Underlying cash
basic and diluted
earnings per
share (EPS)
These EPS measures are calculated as
Underlying cash divided by the number of
shares used in the calculation of IFRS basic
and diluted EPS.
As Underlying cash is the best reflection of the
cash generated by the business, Underlying
cash EPS measures allow analysis of the
shareholder cash generated by the business
by share.
Not applicable.
EEV profit
Derived as the movement in the total EEV
during the year.
Both the IFRS and Cash results reflect only the
cash flows in the year. However our business
is long-term, and activity in the year can
generate business with a long-term value.
We therefore believe it is helpful to understand
the full economic impact of activity in the
year, which is the aim of the EEV methodology.
See Note 3 to the
Consolidated
Financial Statements.
EEV operating
profit
A discounted cash flow valuation
methodology, assessing the long-term
economic value of the business.
Our embedded value is determined in
line with the EEV principles originally set
out by the Chief Financial Officers (CFO)
Forum in 2004, and amended for
subsequent changes to the principles,
including those published in April 2016,
following the implementation of Solvency II.
The EEV operating profit reflects the total
EEV result with an adjustment to strip out
the impact of stock market and other
economic effects during the year.
Within EEV operating profit is new business
contribution, which is the change in
embedded value arising from writing new
business during the year.
Both the IFRS and Cash results reflect only the
cash flows in the year. However, our business
is long-term, and activity in the year can
generate business with a long-term value.
We therefore believe it is helpful to understand
the full economic impact of activity in the
year, which is the aim of the EEV methodology.
Within the EEV, many of the future cash flows
derive from fund charges, which change
with movements in stock markets. Since
the impact of these changes is typically
unrelated to the performance of the business,
we believe that the EEV operating profit
(reflecting the EEV profit, adjusted to reflect
only the expected investment performance
and no change in economic basis) provides
the most useful measure of embedded value
performance in the year.
See Note 3 to the
Consolidated
Financial Statements.
EEV operating
profit basic and
diluted earnings
per share (EPS)
These EPS measures are calculated as EEV
operating profit after tax divided by the
number of shares used in the calculation
of IFRS basic and diluted EPS.
As EEV operating profit is the best reflection
of the EEV generated by the business, EEV
operating profit EPS measures allow analysis
of the long-term value generated by the
business by share.
Not applicable.
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Other Information
APM Definition Why is this measure used?
Reconciliation
to the Financial Statements
Policyholder and
shareholder tax
Shareholder tax is estimated by making an
assessment of the effective rate of tax that
is applicable to the shareholders on the
profits attributable to the shareholders.
This is calculated by applying the
appropriate effective corporate
tax rates to the shareholder profits.
The remainder of the tax charge represents
tax on policyholders’ investment returns.
This calculation method is consistent with
UK legislation relating to the calculation
of the tax on shareholders’ profits.
The UK tax regime facilitates the collection
of tax from life insurance policyholders by
making an equivalent charge within the
corporate tax of the Company. The total tax
charge for the insurance companies therefore
comprises both this element and an element
more closely related to normal corporation tax.
Life insurance business impacted by this tax
typically includes policy charges which align
with the tax liability, to mitigate the impact
on the corporate entity. As a result, when
policyholder tax increases, the charges
also increase. Since these offsetting items
can be large, and typically do not perform
in line with the business, it is beneficial to be
able to identify the two elements separately.
We therefore refer to that part of the overall
tax charge which is deemed attributable
to policyholders, as policyholder tax,
and the rest as shareholder tax.
Disclosed as
separate line items
in the Statement
of Comprehensive
Income.
Profit before
shareholder tax
A profit measure which reflects the IFRS
result adjusted for policyholder tax, but
before deduction of shareholder tax.
Within the Consolidated Statement of
Comprehensive Income the full title
of this measure is ‘Profit before tax
attributable to shareholders’ returns’.
The IFRS methodology requires that
the tax recognised in the Financial Statements
should include the tax incurred on behalf
of policyholders in our UK life assurance
company. Since the policyholder tax charge
is unrelated to the performance of the
business, we believe it is also useful to
separately identify the profit before
shareholder tax, which reflects the IFRS
profit before tax, adjusted only for tax
paid on behalf of policyholders.
Disclosed as a
separate line item
in the Statement
of Comprehensive
Income.
Underlying profit
A profit measure which reflects the IFRS
result adjusted to remove the DAC, DIR
and PVIF adjustments.
The IFRS methodology promotes recognition
of profits in line with the provision of services
and so, for long-term business, some of the
initial cash flows are spread over the life of the
contract through the use of intangible assets
and liabilities (DAC and DIR). Due to the Retail
Distribution Review (RDR) regulation change
in 2013, there was a step-change in the
progression of these items in our accounts,
which resulted in significant accounting
presentation changes despite the
fundamentals of our vertically-integrated
business remaining unchanged. We therefore
believe it is useful to consider the IFRS result
having removed the impact of movements
in these intangibles, as it better reflects the
underlying performance of the business.
Refer to Section 2.1 of
the financial review
Controllable
expenses
The total of expenses which reflects
establishment, development, and
our Academy.
We are focused on managing long-term
growth in controllable expenses.
Full detail of the
breakdown of
expenses is provided
in Section 2.2 of the
financial review
Financial-performance-related APMs continued
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Other Information
Glossary of alternative performance measures continued
Adviser or financial adviser
An individual who is authorised by an appropriate regulatory
authority to provide financial advice. In the UK our advisers
are authorised by the FCA.
Administration platform, also Bluedoor
A client-centric administration system, which has been
developed in conjunction with our third-party outsourced
administration provider, SS&C Technologies, Inc. (SS&C).
The system is owned by SS&C.
Chief Operating Decision-Maker (CODM)
The Executive Committee of the Board (Executive Board),
which is responsible for allocating resources and assessing
the performance of the operating segments.
Client numbers
The number of individuals who have received advice from
a St. James’s Place Partner and own a St. James’s Place
wrapper.
Client retention
Client retention is assessed by calculating the proportion
of clients at 1 January in the year who remain as a client
throughout the year and are still a client on 31 December
of the same year.
Company
The Company refers to St. James’s Place plc, which is also
referred to as ‘St. James’s Place’ and ‘SJP’ throughout the
Annual Report and Accounts.
Controllable expenses
The total of expenses which reflects establishment,
development, and our Academy.
Deferred acquisition costs (DAC)
An intangible asset required to be established through the
application of IFRS to our long-term business. The value of
the asset is equal to the amount of all costs which accrue
in line with new business volumes. The asset is amortised
over the expected lifetime of the business.
Deferred income (DIR)
Deferred income, which arises from the requirement in IFRS
that initial charges on long-term financial instruments should
only be recognised over the lifetime of the business. The initial
amount of the balance is equal to the charge taken.
Discretionary Fund Management (DFM)
A generic term for a form of investment management
in which buy and sell decisions are made (or assisted)
by a portfolio manager for a client’s account. Within
St. James’s Place, the services provided by Rowan
Dartington (including investment management, advisory
stockbroking and wealth planning) are collectively referred
to as Discretionary Fund Management, distinguishing them
from the services provided by our Partners and from our
Investment Management Approach (IMA).
European Embedded Value (EEV)
EEV reflects the fact that the expected shareholder income
from the sale of wealth management products emerges
over a long period of time by bringing into account the
net present value of the expected future cash flows. EEV is
calculated in accordance with the EEV principles originally
issued in May 2004 by the Chief Financial Officers Forum
(CFO Forum), supplemented in both October 2005 and,
following the introduction of Solvency II, in April 2016.
Executive Board (ExBo)
The Executive Board comprises the Executive Directors of the
Board and other members of senior management. It is via
the Executive Board that operational matters are delegated
to management. The Executive Board is responsible for
communicating and implementing the Group’s business
plan objectives, ensuring that the necessary resources are
in place in order to achieve those objectives, and managing
the day-to-day operational activities of the Group.
Financial Conduct Authority (FCA)
The FCA is a company limited by guarantee and is
independent of the Bank of England. It is a UK government
regulator and is responsible for the conduct of business
regulation of all firms (including those firms subject to
prudential regulation by the Prudential Regulation Authority
(PRA)) and the prudential regulation of all firms not regulated
by the PRA. The FCA has three statutory objectives: securing
an appropriate degree of protection for consumers,
protecting and enhancing the integrity of the UK financial
system, and promoting effective competition in the interests
of consumers.
Financial Services Compensation Scheme (FSCS)
The FSCS is the UK’s statutory compensation scheme for
customers of authorised financial services firms. This means
that the FSCS can pay compensation if a firm is unable, or
is likely to be unable, to pay claims against it. The FSCS is
an independent body, set up under the Financial Services
and Markets Act 2000, and funded by a levy on ‘authorised
financial services firms’. The scheme covers deposits,
insurance policies, insurance brokering, investments,
mortgages and mortgage arrangement.
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Other Information
Glossary of terms
Funds under management (FUM)
Represents all assets actively managed or administered by
or on behalf of the Group, including all life insurance and unit
trust assets, but not assets managed by third parties where
we have only introduced or advised on the business. Assets
managed by Rowan Dartington count as FUM from the date
of acquisition.
Gestation FUM
This represents FUM on which no annual product
management charges are taken. Most of our investment
and pension business enters a six-year gestation period
following initial investment. FUM which is not gestation FUM
is known as mature FUM, which is defined later in this section.
Gross inflows
Total new funds under management accepted in the period.
Group
The Group refers to the Company together with its subsidiaries
as listed in Note 23 to the Consolidated Financial Statements.
International Financial Reporting Standards
(IFRS)
These are accounting regulations issued by the International
Accounting Standards Board (IASB) designed to ensure
comparable preparation and disclosure of statements of
financial position. The Group Financial Statements have
been prepared in accordance with International Financial
Reporting Standards as adopted by the UK (adopted IFRSs).
Investment business
This refers to onshore and offshore investment bond
business written by the life insurance entities in the Group.
Investment Management Approach (IMA)
The IMA is how St. James’s Place manages clients’
investments. It is managed by the St. James’s Place
Investment Committee, which in turn is supported by
respected independent investment research consultancies,
including Redington and Rocaton. The Investment Committee
is responsible for identifying fund managers for our funds,
selecting from fund management firms all around the world.
It is also responsible for monitoring the performance of our
fund managers, and, if circumstances should change and it
should become necessary, for changing the fund manager
as well.
Mature FUM
This represents FUM on which annual product management
charges are taken. ISA and unit trust business flows into
mature FUM from initial investment, but most of our
investment and pension business only becomes mature
FUM after the six-year gestation period, during which
time it is known as gestation FUM.
Maturities
Those sums paid out where a plan has reached the
intended, pre-selected, maturity event (e.g. retirement).
Net inflows
Net inflows are gross inflows less the amount of FUM withdrawn
by clients during the same period. The net inflows are the
growth in FUM not attributable to investment performance.
Paraplanner
Staff member in a Partner practice who supports the
advisers in that practice.
Policyholder and shareholder tax
The UK tax regime facilitates the collection of tax from life
insurance policyholders by making an equivalent charge
within the corporate tax of the Company. This part of the
overall tax charge, which is attributable to policyholders, is
called policyholder tax. The rest of the Company’s tax liability is
attributable to shareholders, so is known as shareholder tax.
Prudential Regulation Authority (PRA)
The PRA is a part of the Bank of England and is responsible
for the prudential regulation of deposit-taking institutions,
insurers and major investment firms. The PRA has two
statutory objectives: to promote the safety and soundness
of these firms and, specifically for insurers, to contribute
to the securing of an appropriate degree of protection
for policyholders.
Purchased value of in-force (PVIF)
An intangible asset established on takeover or acquisition,
reflecting the present value of the expected emergence
of profits from a portfolio of long-term business. The asset
is amortised in line with the emergence of profits.
Registered Individual
An individual who is registered by the FCA, particularly
an individual who is registered to provide financial advice.
See also Adviser and St. James’s Place Partner.
Regular income withdrawals
Those amounts, pre-selected by clients, which are paid
out by way of periodic income.
Responsible investment (RI)
Principles and practices that consider broader sustainability
themes and specific environmental, social and corporate
governance factors within the investment process.
Retirement Account (RA)
A St. James’s Place pension product which incorporates
both pre-retirement pension saving and post-retirement
benefit receipts in the same investment product.
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Other Information
Glossary of terms continued
Rowan Dartington (RD)
A wealth management business providing investment
management, advisory stockbroking and wealth
planning services acquired by St. James’s Place in 2016.
Solvency II
Insurance regulations designed to harmonise EU insurance
regulation which became effective on 1 January 2016.
The key concerns of the regulation are to ensure robust
risk management in insurance companies and to use that
understanding of risk to help determine the right amount
of capital for UK and European insurance companies to
hold to ensure their ongoing viability in all but the most
severe stressed scenarios. Following the UK’s withdrawal
from the EU these regulations have been adopted by the UK.
SS&C Technologies, Inc. (SS&C)
A provider of investor and policyholder, administration and
technology services. SS&C is our third-party outsourced
provider, responsible for the administration of our UK life
insurance company SJPUK, our Irish life insurance company
SJPI, our unit trust manager SJPUTG, and our investment
administration company SJPIA.
St. James’s Place Charitable Foundation
The independent grant-making charity established at
the same time as the Company in 1992. More information
about the Charitable Foundation can be found on its
website www.sjpfoundation.co.uk.
St. James’s Place International plc (SJPI)
A life insurance entity in the Group which is incorporated
in the Republic of Ireland.
St. James’s Place Investment Administration
Limited (SJPIA)
An entity in the Group which is responsible for unit trust
administration and ISA management, which is incorporated
in England and Wales.
St. James’s Place Partner
A member of the St. James’s Place Partnership. Specifically,
the individual or business that is registered, on the relevant
regulatory register, as an Appointed Representative of
St. James’s Place Wealth Management plc, St. James’s Place
(Hong Kong) Limited, St. James’s Place Wealth Management
(Shanghai) Limited or St. James’s Place (Singapore)
Private Limited.
St. James’s Place Partnership
The collective name for all of our advisers, who
are Appointed Representatives of St. James’s Place.
St. James’s Place UK plc (SJPUK)
A life insurance entity in the Group which is incorporated
in England and Wales.
St. James’s Place Unit Trust Group Limited
(SJPUTG)
An entity in the Group which is responsible for unit trust
management, and which is incorporated in England
and Wales.
St. James’s Place Wealth Management plc
(SJPWM)
The UK distribution entity within the Group, which is
responsible for the St. James’s Place Partnership and the
advice it provides to clients. It is incorporated in England
and Wales.
State Street
A global financial services holding company offering
custodian services, investment management services,
and investment research and trading services. State
Street is responsible for the custody of the majority of
the St. James’s Place assets, and also provides other
investment management services.
Surrenders and part-surrenders
Those amounts of money which clients have chosen to
withdraw from their plan, which were not pre-selected
regular income withdrawals or maturities.
Vertically integrated
When we describe St. James’s Place as being vertically
integrated, we are referring to the fact that its distribution
capability (the Partnership) and the manufacturers of
its investment products are both part of the Group.
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St. James’s Place plc
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