Annual Report and Accounts 2023
Providing trusted
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Good advice means making better decisions, allowing you to
choose the right path and achieve your goals. Trusted financial
advice at St. James’s Place helps nearly one million clients
experience greater peace of mind and security. Creating a
financial future they believe in.
Strategic Report
Chair’s report 04
Stakeholder engagement 07
Our business model 10
Market overview 12
Chief Executive Officer’s report 14
Implementing our strategy 18
Our responsible business 24
Chief Financial Officer’s report 50
Financial review 54
Risk and risk management 74
Approval of the Strategic Report 85
Governance
Board of Directors 88
Corporate governance report
(including section 172(1) statement) 90
Report of the Group Audit Committee 106
Report of the Group Risk Committee 118
Report of the Group Nomination
and Governance Committee 125
Report of the Group
Remuneration Committee 129
Directors’ report 158
Statement of Directors’
responsibilities 162
Financial Statements
Independent Auditors’ Report to the
Members of St. James’s Place plc 164
Consolidated Financial Statements
under International Financial
Reporting Standards 172
Parent Company Financial
Statements under Financial
Reporting Standard 101 247
Supplementary information:
Consolidated Financial Statements
on a Cash result basis (unaudited) 254
Other Information
Shareholder information 262
How to contact us and advisers 263
Our scenario analysis 264
Aligning our progress with recognised
frameworks 274
Glossary of alternative
performance measures 276
Glossary of terms 279
Protecting what matters
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Financial
wellbeing
Climate
change
Community
impact
Investing
responsibly
Purpose
Strategic enablers
GovernancePeople
Our purpose
To give you
confidence to
create the future
you want
What we do
Our vision
To be the best
place to create
long-term financial
security
We will get there by working together
Being a responsible business
Our culture drives our business
Doing the right thing
#1
Being the best version of ourselves
#2
Investing in long-term relationships
#3
Find out more about our culture and being
a responsible business on pages 22 and 24
Our Responsible Business Framework
01
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Governance Financial Statements Other InformationStrategic Report
How we do business
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Financial highlights
£15.4bn
Gross inflows
Down 9% from 17.0 billion in 2022
£5.1bn
Net inflows
Down 48% from £9.8 billion in 2022
£168.2bn
Funds under management
Up 13% from £148.4 billion
at 31 December 2022
£168.2bn
£117.0bn
£129.3bn
2019 2020 2021 2022 2023
£154.0bn
£148.4bn
£392.4m
Underlying cash result
1
Down 4% from £410.1 million in 2022
£(9.9)m
IFRS loss after tax
Down from £407.2 million profit in 2022
23.83p
Dividend per share
Down 55% from 52.78 pence in 2022
£1,041.0m
European embedded value (EEV)
operating profit
1
excluding
exceptional items
Down 35% from £1,589.7 million in 2022
Non-financial highlights
+3%
2023 growth in advisers
2022: 3%
Page 18
87%
2023 percentage of employees who
feel proud to work at St. James’s Place
2022: 87%
Page 40
10,000
Children reached through
financial education
2022: 5,800
Page 27
ESG risk rating: Low
Overall percentile rank: 88%
Why invest in SJP
Helping you to create
your future, your way.
Established market leader
We are the UK’s leading provider
of advice-led wealth management
with the associated economies of
scale, operating in a structural
growth market.
Strong track record
We have a strong track record
of driving growth in funds under
management, delivered through
a proven and sustainable advice-
led business model.
Investing in the business
We continue to invest in the
Partnership, our pioneering
SJP Academy, our client value
proposition, and in technology.
This drives competitive advantage,
underpins growth and enables
efficient operations as we scale.
Revised fee model
We are revising our client fee
model to meet expectations for
simplicity and comparability,
drive competitive advantage,
and deliver strong long-term
earnings growth.
Financially robust
We are financially robust
and operate with a simple
cash generative financial
business model.
1 The Underlying cash result and EEV operating profit are alternative performance measures (APMs). The glossary of alternative performance
measures on pages 276 to 278 defines these APMs and explains why they are useful. The Underlying cash result is reconciled to International
Financial Reporting Standards (IFRS) on page 191.
2 MSCI did not perform a rating assessment during 2023, so the rating above relates to our 2022 assessment.
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Annual Report and Accounts 2023St. James’s Place plc
Strategic Report
2023 highlights
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Strategic Report
Chair’s report 04
Stakeholder engagement 07
Our business model 10
Market overview 12
Chief Executive Officer’s report 14
Implementing our strategy 18
Our responsible business 24
Chief Financial Officer’s report 50
Financial review 54
Risk and risk management 74
Approval of the Strategic Report 85
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Strategic Report Governance Financial Statements Other Information
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Overview
2023 was a challenging year. High rates of inflation and
interest rates have characterised both 2022 and 2023,
as have global conflict and political instability. Against
this background, clients have understandably used their
savings and investments to support themselves and their
families. However, the resilience evident in the underlying
performance of the business, with funds under management
reaching record levels in 2023, continues to give us
confidence in the strength of our business model.
More disappointing has been our share price performance,
which reacted to the actions we have taken to modernise
our fee structure. We believe these actions on our fees
leave us well positioned for growth and aligned with
the FCA’s Consumer Duty. The system changes we need
to make to accommodate a different fee structure will
inevitably come at a cost.
We have also experienced a marked increase in clients
registering complaints relating to whether they have
received ongoing servicing historically. Given this, an
initial assessment of client servicing records has been
undertaken and the findings from this indicate the need
for us to take action to refund clients where ongoing service
has not been evidenced. The action we have taken has
led to us increasing our provisions for refunds which has
impacted our 2023 results. While this is disappointing,
we know for the future that our investment in 2021 in our
Salesforce customer relationship management system
will enable us to monitor service levels to ensure our clients
receive the advice and support they expect. The actions
we have taken have involved close engagement with
our key regulators and, as strong advocates for regulated
advice, we remain determined to work with all policymakers
and other stakeholders to help drive better financial
resilience across society.
We cannot be complacent of our market leading position
and we will evolve to continue to meet the needs of our
clients. Expectations of clients are rightfully high and where
we risk falling short of those expectations we must act.
The Board and governance
Our continued growth and success over time have owed
much to the strength of our Partnership structure and our
management’s ability to ensure continuity during periods
of transition. Culture plays an important part in an
organisation’s success and was a key consideration in the
appointment of Mark FitzPatrick as Chief Executive Officer.
Succession planning is an ongoing process and the Board
and Group Nomination and Governance Committee
have spent considerable time in the last couple of years
ensuring that success criteria balanced the importance
of continuity with the value that diversity and a fresh
perspective could provide.
The robust process identified Mark FitzPatrick as the
outstanding candidate and Mark joined the Board
on 1 October 2023, succeeding Andrew Croft as Chief
Executive Officer on 1 December 2023. Andrew has been
with St. James’s Place since 1993, serving as its Chief
Financial Officer and then Chief Executive Officer since
2018, and on behalf of the Board I would like to thank
Andrew for his unwavering commitment to the business.
He will be greatly missed by everyone at SJP, and we
wish him our very best in his retirement.
As we announced on 9 November 2023, Dominic Burke also
stepped down as a Director on 31 January 2024. Dominic
contributed much in his short time with us and I wish him
all the best in his future ventures. As part of our ongoing
succession planning, plans to recruit further Non-executive
Directors were already underway and we hope to appoint
a new Senior Independent Director in the near future.
Further detail on the work of the Group Nomination and
Governance Committee can be found in its report later
in this Annual Report and Accounts.
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St. James’s Place plc
Leading through
change
Chair’s report
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The Board’s priorities and our strategy
In recent years I have outlined the Board’s key areas
of focus alongside our strategy to 2025: the Partnership,
investment performance, administration and digital.
These are all key contributors to good client outcomes and
the Board continues to monitor our progress in these areas.
Our work on strategy beyond 2025 is also well underway.
While our financial results have been significantly
impacted by the increase in the provisions relating to
ongoing servicing evidence, the underlying performance
of the business remains strong. The Board recognises the
importance of returns to shareholders and is confident that
sufficient capital and liquidity has been set aside to deal
with this legacy matter. In light of this, the Board believes
it prudent to recommend a final dividend for 2023 of 8.00
pence per share. Combined with the interim dividend of
15.83 pence per share we declared at the half year, this
brings our full-year dividend to 23.83 pence per share.
The Board has also made the decision to revise guidance
for future shareholder distributions, believing that this
approach strikes an appropriate balance of ensuring
the business retains sufficient capacity for investment
alongside the importance of returns to shareholders.
Whilst 2022 and 2023 have presented
tough environments for clients,
savers and investors in general,
the value of advice has never
seemed more important.
Paul Manduca, Chair
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Our culture and responsibilities
Culture is a critical enabler for any organisation and what
we understand by the term culture continues to change
over time. We have committed to being a responsible
business, and what it means to be a responsible business
is not solely about the actions we take but also about how
we respond to threats to our culture and how we foster
inclusive behaviour.
Responsibility is also not measured just through our own
expectations, but through the eyes of our stakeholders.
Our corporate governance report on pages 90 to 105 sets
out how the Board has listened to our stakeholders and
taken account of their views in our decision-making.
The Board also recognises that there is a compelling
commercial case for being a responsible business
and the progress we have made in 2023 is detailed in
the Our Responsible Business section of this Annual Report
and Accounts on pages 24 to 49. Further information on
how our commitment to being a responsible business
feeds through to the remuneration of Executives,
can be found on page 139 of the report of the Group
Remuneration Committee.
Concluding remarks
I would like to express my thanks to my Board colleagues
and management for their support and hard work during
a challenging year, and commend employees and in
particular our Partner businesses for the strong underlying
performance achieved in a challenging year. I have
provided a high-level overview of some of the key areas
of the Board’s activity in 2023, and would encourage you
to read the corporate governance report which covers this
in more detail. Whilst 2022 and 2023 have presented tough
environments for clients, savers and investors in general,
the value of advice has never seemed more important.
This is reflected in the FCA’s recent statement of its aims for
forthcoming consumer policy initiatives which highlighted
that it wants consumers of all wealth levels to be able
to make good investment decisions and invest with
confidence, understanding the risks and the protection
involved. The Board is confident that SJP can contribute to
helping the FCA meet its aims. I look forward to welcoming
shareholders to this year’s Annual General Meeting, which
will be held on 15 May 2024.
Paul Manduca, Chair
27 February 2024
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St. James’s Place plc
Chair’s report
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Building long‑term relationships
with our stakeholders
We regularly engage with all of our stakeholders, listening
to what is important to them and building the long-term
relationships that enable us to respond to their evolving
needs and help them move forward with confidence.
St. James’s Place’s stakeholders
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.
Advisers
We give you the freedom to build and
grow your financial advice business,
your way, with the confidence of a large,
financially strong company behind you.
Employees
We give you the opportunity to create
the career you want and the confidence
to chart your own career path.
Society
We are committed to being a responsible
business. To us, this means considering
responsible and sustainable decision-
making in everything we do.
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.
What they care about
Clients place great value on trusted face-to-face advice,
seeking guidance and reassurance where they lack
the time, inclination or confidence to manage their
financial affairs.
How do we help our clients move forward
with confidence?
Whether it be day-to-day finances or long-term financial
planning, our advisers are on hand to support clients.
From initial fact-find meetings through to regular reviews,
each engagement provides an opportunity for our
advisers to better understand clients and ensure
the advice provided is best for them.
2023 proved a challenging period for many UK savers and
investors, who had to contend with high and persistent
inflation, rising borrowing costs, stock market volatility
and continued macroeconomic and geopolitical
uncertainty. Our advisers have supported clients through
these times, keeping them on track for the long-term
futures that they have planned for themselves and
their families.
How do we engage with our clients?
We want to support our clients to achieve great outcomes
and we’re always looking for ways to improve the client
experience. Our 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. Using this feedback, we’re
able to ensure SJP remains the best place to build
financial futures.
The introduction of Consumer Duty has set higher
standards of consumer care and protection. As part of
our Consumer Duty programme of work we partnered
with the Wisdom Council to carry out testing on some of
our client-facing literature, ensuring it was clear, relevant,
and supported strong client understanding.
Clients
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. Further information on how the Directors fulfil
this duty is set out in the section 172(1) statement.
Section 172(1) statement is on page 90
958,000
Number of clients
2022: 917,000
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Strategic Report Governance Financial Statements Other Information
Engaging with
our stakeholders
Stakeholder engagement
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What they care about
Our advisers rely on us to provide the support that they
need, in order to focus on delivering high-quality, trusted
advice to clients.
How do we help our advisers move forward with
confidence?
Our advisers help clients create the futures they want for
themselves, so we enable our advisers to deliver sound
financial planning advice and build great businesses.
We attract not only experienced advisers, but also train
our own through our Academy programme, helping them
to grow, succeed and stay safe by providing a range of
services including marketing support, business checking,
technical support, technology and training. By providing
an efficient structure, we enable advisers to spend more
time doing what they do best: helping clients grow and
protect their wealth over time.
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 do 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.
We support our advisers with the tools and knowledge
required to meet their regulatory and Consumer
Duty requirements.
Advisers
What they care about
Our employees look for the opportunity to create the
careers that they want, and the confidence to chart
their own career path.
How do 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.
Our SJP House learning app provides functionality
for an intuitive, innovative learning experience, so that
employees can complete highly flexible, self-directed
learning to drive their own development.
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 that we’re an inclusive community
where all people 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 that they’re part of a business with
a real positive impact.
How do 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, with feedback
and ideas circulated to the Board. This complements
the activity of our Workforce Engagement Panel and
our active presence on social media, as we embrace
digital communication platforms.
Employees
94%
Retention rate for
core UK employees
2022: 87%
4,834
Advisers
2022: 4,693
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St. James’s Place plc
Stakeholder engagement
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What they care about
Society expects us to meet our ambition to be a
responsible business, with responsible and sustainable
decision-making in everything we do.
How do we help society move forward with
confidence?
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.
We do this through our Responsible Business Framework,
with a focus on enhancing financial wellbeing, leading
the conversation on investing responsibly, giving back to
support local communities, and taking action on climate
change.
Through our Responsible Business Framework, we have
an opportunity to help address the social, environmental
and economic challenges faced by all in society. First
and foremost, this means delivering great financial
advice to our 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.
How do we engage with society?
To make sure that 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 is measured against clear goals
and key performance indicators (KPIs). These help us to
focus and flex our efforts in being a responsible business.
We also engage with industry bodies, regulators and
the UK government to help shape our wider support
for society.
Society
What they care about
Shareholders look to us to create long-term shareholder
value, with a sustainable and responsible business
model.
How do we help our shareholders move forward
with confidence?
We’re the largest advice-led wealth manager in the UK,
with the necessary economies of scale to deliver great
client outcomes while also providing returns to
shareholders. We see a fantastic market opportunity
ahead with the demand for financial advice continuing
to grow, driven by a large savings gap in the UK, the
persistent complexity of the country’s savings, tax and
pensions regimes, and the challenge of managing
intergenerational wealth transfers.
We’ve set out ambitious plans to grow our business in
the years ahead, building on our long-term track record
of net inflows and increasing funds under management.
We’re confident that this will result in significant value
creation for shareholders 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 a leadership position
on matters most important to us.
How do we engage with our shareholders?
We seek 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.
Shareholders
£168.2bn
Funds under
management
2022: £148.4 billion
£9.5m
Raised by the SJP
community
2022: £10.5 million
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Strategic Report Governance Financial Statements Other Information
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We are the UK’s leading provider of advice-led wealth management, with an
integrated client offering that provides financial advice, platform administration
and investment management as part of a single service.
Clients
We help clients to move
forward with confidence,
creating the future they want.
958,000
Clients
The Partnership
We promote financial advice and
wealth management through the
St. James’s Place Partnership.
4,834
Advisers
St. James’s Place
We support clients and the Partnership,
ensuring they can create financial wellbeing.
£168.2 billion
Funds under management
Responsible business
We are committed to being a 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.
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St. James’s Place plc
How we deliver value
Our business model
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Financial
advice
Assets
invested
Annual
management
fee based
on client
funds under
management
Client
assets
Assets
managed
Responsible business
We want to be a responsible business
that creates financial wellbeing, invests
responsibly, has a positive community
impact, and commits to
limiting climate change.
St. James’s Place
Investments are managed through our
unique investment management approach,
aiming for long-term sustainable growth
in funds under management.
We operate a fee-based income model
where we receive fees based on the level
of client funds under management.
The Partnership
We provide advice through the Partnership,
the collective name for our advisers
who are appointed representatives
of St. James’s Place.
Partners and advisers are attracted by
superior support to build a great business
over the long term.
Clients
Strong demand for advice to help clients
plan and protect their financial future.
Clients are attracted to an end-to-end
connected proposition focused on great
long-term client outcomes.
Advice Platform &
administration
Investments
Financial
wellbeing
Investing
responsibly
Climate
change
Community
impact
Find out more on page 24
79%
of clients would
recommend
St. James’s Place
2022: 81%
Find out more on page 42
+13%
2023 growth in funds
under management
2022: -4%
Find out more on page 55
+3%
2023 growth in
adviser numbers
2022: +3%
Find out more on page 18
44%
Reduction in weighted
average carbon intensity
of our investments
since 2019
2022: 33%
Find out more on page 28
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The UK wealth market
Rising affluent wealth
Retail wealth in the UK is large and
growing. We estimate that retail
liquid assets alone account for
some £4.0 trillion as at the end of
2023 (source: GlobalData). Our target
market includes mass affluent
individuals with around £50,000 to
£5 million of investable assets, who
are estimated to control around 67%
of UK investable wealth, including
£2.7 trillion of retail liquid assets
(source: GlobalData). We know that
the market opportunity is even
greater when we look beyond liquid
assets and also consider personal
pension assets and insurance-
wrapped savings.
Retail liquid assets
£’trillion
2013
2
1
3
4
5
2014 2015 2016 2017 2018 2021 2022 2023 2024 2025 20262019 2020
Growth in Mass Affluent target market = 6% CAGR
Mass market (<£50k) Mass affluent (£50k-£5m)
High net worth (>£5m)
(Source: GlobalData)
Average household wealth is typically
accumulated throughout working lives,
reaching a peak when the head
of household is aged between 55
and state pension age(SPA) (source:
Office for National Statistics), before
gradually decumulating throughout
retirement. There is a strong demand
for financial advice during the
accumulation phase to maximise
growth and ensure clients have a
clear plan to meet their goals, and
also during the decumulation phase
as clients look to manage the impact
of longevity on personal finances and
optimise the intergenerational wealth
transfer to come.
Total wealth by age band
£’000
553.4
22.3
76.8
198.1
366.6
468.7
16 to 24
25 to 34
35 to 44
45 to 54
55 to SPA
SPA and over
(Source: Office for National Statistics)
Increasing demand for
financial advice
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.
Financial advice creates real
value and helps individuals to feel
confident in their financial futures,
as demonstrated by research from
the International Longevity Centre.
1
We estimate that there are
approximately 13.5 million individuals
in the mass affluent market in the UK,
including a large number who are
currently non-advised but are open
to receiving financial advice.
As a result, the demand for personal
face-to-face advice is increasing,
as people lacking the time, inclination
or confidence to manage their
financial affairs seek help from
a trusted adviser.
Despite this, there aren’t enough
advisers in the UK to meet this
demand and 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.
How SJP can benefit from the
market opportunity
We’re the leading advice-led wealth
management business in the UK,
with 4,834 advisers at the end of
2023. 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,
despite the relative appeal of cash
deposit rates in the current market.
1 ‘What’s it Worth – Revisiting the Value of Advice’.
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Demand for advice
is increasing
Market overview
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
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.
We are advocates of the need for
individuals and families to become
more financially resilient and
confident of their futures, but we know
that holistic financial planning advice,
delivered by professional advisers,
will not be accessible to all. We’re
therefore supportive of initiatives,
such as the growth of robo-advice
offerings or a review of the Advice
Guidance Boundary that may support
more people to make better decisions
around their basic finances.
However, despite the ongoing
market evolution, 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
aim to support individuals with more
straightforward requirements to save
and invest for the future.
Market trends
The UK wealth landscape
is evolving, providing
opportunities and
challenges. We list below
four key trends shaping the
UK wealth management
landscape of tomorrow.
Growing advice gap
The demand for financial advice
continues to grow, driven by
increasing affluent wealth and
the persistent complexity of the
UK savings, tax and pensions
regimes. Together with a shortfall
of qualified financial advisers in
the UK, this contributes to a
widening advice gap and an
associated market opportunity.
Shifting regulatory landscape
The introduction of the FCA’s
Consumer Duty regulation in 2023
set clearer and higher standards of
consumer protection across financial
services, requiring firms to put clients
at the heart of their business, with a
focus on value for money and client
outcomes. The interpretation of
Consumer Duty across the industry
will continue to evolve as the new
regulation is embedded.
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 the companies they
interact with to use data to deliver
unique, personalised services.
Responsible investment
Clients want to see their
investments act as a force for
good, and for wealth managers to
be responsible businesses. At the
end of 2023, retail funds under
management in environmental,
social and governance (ESG)
funds accounted for £98 billion
or 7% of the industry (source:
Investment Association), with
this expected to increase in the
future as ESG-related investment
approaches move further into
the mainstream.
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. We estimate
that there were 13.5 million such individuals at the end of 2023, 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
£2.7 trillion to over £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.
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Our clients compared to
individuals in our target market
2023
Individuals in our core target market
SJP clients
958,000
13.5 million
Our FUM compared to target
market liquid assets
2023
Market size
SJP FUM
£2.7 trillion
£168.2bn
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I am delighted to be leading St. James’s Place,
the largest advice-led wealth manager in the
UK, and a business that has a critical role to
play in helping secure the futures of our clients
and their families.
During my initial weeks and months at the Company, I’ve met
a lot of people from across the St. James’s Place community
and I’ve listened carefully, with every conversation bringing
new insight. I’ve been really struck by the importance of
what we do for clients and how passionately the whole
community cares: supporting clients with trusted financial
advice that provides peace of mind and the confidence
to benefit from investing over the long term.
This focus has helped us to build a fantastic position within
our marketplace over the past three decades, where we
now look after £168.2 billion of funds under management
for our clients. We’ve achieved a lot already, but I believe
we can still do better for all our stakeholders.
Operating and financial performance
The economic environment in 2023 was undoubtedly
challenging. It is at precisely these times that financial
advice can really help clients, acting as a steady hand to
keep them on track to meet their long-term financial goals.
High inflation and high interest rates have put pressure on
UK consumers, with rising mortgage rates contributing to
rising living costs more generally. This impacted some
individuals’ capacity and confidence to invest. Meanwhile,
those with capacity to invest may have been attracted to
elevated short-term savings rates over long-term investing.
Against this backdrop, we have attracted £15.4 billion of
new client investments and client retention rates have
remained high at 95.3%, contributing to net inflows of
£5.1 billion; these figures highlight the sheer scale of SJP
today and the fundamental resilience of our business
model in challenging market conditions. This new business
performance, together with strong investment returns, has
seen funds under management close the year at a record
£168.2 billion, up 13% compared to the beginning of the year.
We have delivered an Underlying cash result of £392.4 million
(2022: £410.1 million), which is 4% lower year on year. This
result reflects growth in average funds under management
during the year and tight cost control in line with guidance,
but this robust underlying financial performance was
largely offset by an increased UK corporation tax rate.
Our Cash result for the year of £68.7 million (2022: £410.1 million)
has been significantly impacted by an assessment we
undertook into the evidencing and delivery of historic ongoing
servicing and the provision we have now established for any
client refunds required. The underlying performance of our
business means I’m confident we will emerge from these
short-term historic challenges as an even stronger business.
Delivering change
While our business continues to perform well against a
difficult backdrop, it’s important that we address our
challenges and develop our client offering so that we
remain in good shape for the future.
Managing ongoing servicing complaints
We saw a marked increase in the number of clients
registering complaints linked to the evidencing and
delivery of ongoing servicing in the past. We’ve taken this
very seriously and where gaps in record-keeping mean
that there is a lack of evidence of the delivery of ongoing
servicing, we’ve refunded these charges to clients. With the
number of complaints accelerating in late 2023, we
engaged extensively with the FCA on this matter and the
resulting assessment of historic client servicing records.
This assessment indicates that we have an improved body
of evidence for the delivery of ongoing servicing since we
invested in Salesforce in 2021, but that evidence is less
complete before then. Based on assumptions derived from
this assessment, we have established a provision of £426
million for refunds, impacting our financial results in 2023.
We recognise that this is a disappointing outcome for
everyone.
We know that our clients really value what we offer them,
and we take comfort from outstanding client retention and
advocacy, but we must be able to evidence the delivery of
ongoing servicing that clients trust and value. Through
leveraging the investment we’ve made in our Salesforce
CRM system and our Consumer Duty work, in 2023 we
switched off ongoing servicing charges for 2% of clients
where there was a lack of evidence that ongoing servicing
was provided in this period. Our central CRM capability
gives us confidence in our ability to minimise the risks that
clients will be charged for services they do not receive.
Introducing simple and comparable charging
Our charging structures have often been interpreted by
commentators as being complex and this has brought
some challenge for our business. In 2023 we made some
significant decisions around our charges, including the
announcement in October that we are implementing our
programme to simplify our charging structures, which will
be completed in the second half of 2025. The changes
enhance the value that clients receive and introduce
improved comparability that will help market perceptions
of our services.
Our current charging structures have also limited the
comparability of our investment performance over time,
impacting our brand and reputation. Our simplified
charging structure will make it much easier to compare
investment performance across the industry on a like-for-
like basis, enabling us to tell a more accurate story of how
we are delivering for clients.
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Setting up for
success
Chief Executive Officer’s report
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This move to unbundle our charges, which we announced in
October, has been designed to ensure sustainability for the
long-term. This gives us confidence that we can grow the
business without the need for further changes to our
charges that would impact the guidance we
communicated to shareholders last October. The changes
we are making will be good for clients, appropriate for our
marketplace and built for a Consumer Duty world. By
extension, they will be good for our long-term business
health by giving us the opportunity to consider new
propositions and real agility in how we grow the business.
Evolving our investment proposition
We’ve got an investment proposition that works well for
clients, and it’s important that we continue to develop our
offer so that we meet client needs as they change over time.
In late 2022 we launched our Polaris range of portfolios,
supporting clients looking to grow their long-term finances,
and I am pleased to report that this range has got off to
a very strong start with all four portfolios outperforming
their IA and ARC benchmarks since launch. Polaris has
also proved incredibly popular with clients, attracting more
than £25bn in investments already. We are exploring further
developments in our investment approach, including the
role of passives in providing greater choice for clients.
Developing our investment proposition is just one example
of how we’re making changes that ensure we continue to
support our clients and the communities in which we
operate. Beyond these actions, as the market leader in
financial advice we have the opportunity, and indeed
responsibility, to promote our business, our brand, and our
broader industry. We will build a stronger voice, supported
by a new national marketing and media campaign that
will launch this spring.
Building for the future
The structural market opportunity for financial advice is
clear. The savings gap in the UK is already considerable
and it continues to grow because planning for retirement is
complicated, as is thinking about investing, managing risk,
and considering protection. This is where personal and
trusted financial advice can make a real difference.
We’re well positioned to seize this market opportunity:
we have the largest group of financial advisers in the UK,
and we continue to grow it through our market-leading
Academy programmes and by recruiting talented financial
advisers who are attracted to us because they know we
can help them thrive. We accomplish this through scale
that gives us real advantage, from helping us curate a
distinct investment proposition that works for clients,
partnering with leading global businesses to underpin
our technology and administrative capabilities, and better
supporting the 2,666 businesses that comprise the SJP
Partnership. We have a strong and enviable track record
of driving growth through an unbroken history of net inflows
in every year over three decades.
I’ve been really struck by the
importance of what we do for clients
and how passionately the whole
community cares: supporting clients
with trusted financial advice that
provides peace of mind and the
confidence to benefit from investing
over the long term.
Mark FitzPatrick, Chief Executive Officer
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Our marketplace will evolve as client expectations and
preferences change over time, so it’s important that we
keep looking forward to consider how we are best placed
to capture both existing and emerging opportunities over
time, and drive sustained growth in the business.
I’ve therefore commenced a business review, supported
by a leading external consultancy, so that we build on
everything we’ve achieved and the changes we’re already
making. Putting aside the matter of our charges, which has
already been dealt with, the review is comprehensive in its
scope, with the aim of ensuring we plot a sustained path
for growth as market trends evolve, focus on cost and
efficiency to drive operating leverage, and manage our
resources effectively and efficiently so that we drive
improving returns.
This work is underway and we plan to update the market on
the outcome of the review at the time of our half-year
results.
Summary and outlook
The underlying performance of our business has
been robust in what has been a very difficult external
environment, highlighting the strength of our advice-led
model in attracting and retaining client investments,
as well as the resilience of our financial model. 2023 was
also a year in which we faced into some important historic
challenges. We are working hard to put these challenges
behind us so that we can move forward with confidence
as we plot our path to 2030.
In the near-term, we expect the industry outlook to remain
challenging in 2024 given the pressures consumers continue
to face. The near-term environment notwithstanding, the
longer-term structural opportunity for the financial advice
industry is hugely attractive. With scale advantage, a
strong Partnership of fantastic advisers, and an investment
approach that delivers for clients, we are very well placed to
capture this opportunity and perform for all our stakeholders.
Mark FitzPatrick, Chief Executive Officer
27 February 2024
£15.4bn
Gross inflows in 2023
2022: £17.0 billion
Delivering against SJP’s
six business priorities
Our business priorities
Building community
Page 18
Being easier to do business with
Page 19
Delivering value to advisers and clients
through our investment proposition
Page 20
Building and protecting our brand
and reputation
Page 21
Our culture and being
a responsible business
Page 22
Continued financial strength
Page 23
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Chief Executive Officer’s report
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What is Consumer Duty?
The Duty sets clearer and higher standards of
consumer protection across financial services.
Firms are required to put clients at the heart of their
business, and to offer products and services that are
fit for purpose, represent fair value, and are focused
on the actual outcomes that clients experience.
This is achieved through an overarching consumer
principle and three cross-cutting rules that aim to
deliver four key consumer outcomes.
The FCA’s Consumer Duty (the Duty) came into
force on 31 July 2023. It is a major development
in the regulatory regime for retail financial
services in the UK and, as such, it is naturally a
key focus for our business. We have engaged
our entire SJP community in understanding
the Duty as it has implications not only for
our clients, but for all our stakeholders.
Consumer Duty represents what the regulator terms a
‘paradigm shift’ in its expectation of firms: moving them
away from simply good intentions and towards evidencing
that the processes and frameworks firms have in place are
effective at delivering good client outcomes.
Implementing Consumer Duty
As a business that has always sought to achieve good
client outcomes through a holistic end-to-end client
proposition, we started in a good place. Nonetheless,
we’ve undertaken a very significant programme of work
to review a huge range of elements across our business,
including our systems, controls, policies and procedures,
and training frameworks.
We have three core commitments that underpin good
client outcomes at SJP:
We deliver fair value
We support each client to make effective, timely and
informed decisions throughout their journey with us
We help clients to achieve their financial objectives.
Having considered the principles and processes that we
already had in place ahead of Consumer Duty coming into
force, we have made a number of changes in how we and
our advisers operate in order to ensure that we continue to
deliver and evidence good client outcomes.
The most significant change following our Consumer Duty
review was the introduction in August 2023 of an annual
product charge cap to client bond and pension
investments that have reached their tenth anniversary
or beyond. This cap further increased the competitiveness
of our bonds and pensions through the product lifecycle,
enhancing value to clients who have invested for the long
term and enabling them to share in the economies of scale
of our business today.
Beyond Consumer Duty
We treated the work required under Consumer Duty
as an opportunity to continue to evaluate our business
and enhance long-term value for clients, the
Partnership, shareholders, and all other stakeholders.
We have always been confident that SJP offers its
clients real value that helps individuals and families
achieve financial wellbeing. However, clients are
increasingly seeking simple comparability, and so to
reflect this evolution, we announced during 2023 that
we are simplifying our charging structure from the
second half of 2025, while ensuring that it remains
competitive and sustainable for the future.
Find out more on page 97
These changes are consistent with the principles
of Consumer Duty, as they offer improved simplicity,
and comparability and enhance value for clients.
Consumer Principle
A firm must act to deliver good
outcomes for retail customers
Cross‑cutting Rules
Firms must:
Act in good faith
Avoid causing foreseeable harm
Enable and support retail customers to pursue
their financial objectives
Four Outcomes
1. Products and services 3. Consumer understanding
2. Price and value 4. Consumer support
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Consumer Duty and
stakeholder implications
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141
Net new advisers
welcomed in 2023
2022: 137
Building community
We’ll help every corner of our growing community contribute to its success.
What we achieved in 2023 Our focus in 2024 Relevant links
We welcomed a net 141 new
advisers into the Partnership,
increasing the total number
to 4,834.
We opened a new office in
Dubai, building a presence
in attractive markets in the
Middle East.
We launched the SJP
House app to employees,
transforming the way
we support learning
and development.
We’ll strengthen relationships
across the Partnership,
building confidence about
the future and the robustness
of SJP’s proposition, and
enhancing sentiment.
We’ll continue to ensure SJP
is a great place to work and
build a career, enabling us
to attract high-quality talent.
Responsible business
Financial wellbeing
Community impact
Inclusion and diversity
Responsible relationships
Executive remuneration
Net manpower growth
Attainment of competent
adviser status
Partner sentiment
Partner feedback from
engagement events
Employee engagement
Principal risks and
uncertainties
Partner proposition
People
Responsible business
page 24
Risks and uncertainties
page 79
Executive remuneration
page 134
Our approach
We want to promote and maintain a vibrant community
of Partners and employees with a shared purpose that
connects each and every one of us. We know that our
people are our greatest asset and they drive the success
of the business for all stakeholders.
Growing the Partnership means we can help more 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,
as well as welcoming new advisers through our Academy,
which provides the professional training and experience
necessary for individuals to become financial advisers.
With an acknowledged shortfall of qualified financial
advisers in the UK, training our own through the Academy
gives SJP a real advantage.
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, whether through greater
work flexibility, career development, training, mentoring,
reward, or via many other areas.
Our performance
We’re pleased that adviser retention has remained
very strong at 92%, and to have welcomed a net 141 new
advisers to the Partnership in 2023 through both recruiting
experienced advisers and by 337 advisers delivered
through our Academy programme. We also built upon
our established presence in the Asian markets by opening
a new office in Dubai.
We’re also listening to our employees to understand how
we can build a better business for them. During 2023, we
launched SJP House, our next-generation learning app,
providing a suite of learning and development content
and materials directly to employees.
Launching the SJP House
app for employees
SJP House is our next-generation learning app,
with functionality that provides an intuitive,
innovative learning experience, so employees
can complete highly flexible, self-directed
learning anytime, anywhere.
SJP House has been designed from inception
to maximise learning opportunities and to
incorporate our proven evidence-based approach
to online learning. It ensures that SJP continues
to provide our community with the flexible tools
needed to succeed and to supercharge and
accelerate their professional growth.
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Implementing our strategy
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Being easier to do business with
We’ll invest in technology that transforms the experience we provide people.
What we achieved in 2023 Our focus in 2024 Relevant links
We enhanced Salesforce
functionality and embedded
it across our corporate
functions.
We launched additional
functionality within our
next-generation client app.
We focused on increasing
the speed of administration,
and further reduced our
administration error rate.
We’ll continue to develop
digital capabilities (e.g.
Salesforce/client app) and
effectively roll them out to
enable improved
performance and experience
for our clients and the
Partnership.
We’ll maintain quality client
servicing, driving continuous
improvement and delivering
the right client outcomes.
Responsible business
Financial wellbeing
Client satisfaction
and retention
Data privacy
Responsible procurement
Executive remuneration
Administration performance
Administration error rate
Salesforce integration
and satisfaction levels
Enhancement of digital
client proposition
Client adoption of digital tools
Data governance and quality
Principal risks and
uncertainties
Partner proposition
Third parties
Responsible business
page 24
Risks and uncertainties
page 79
Executive remuneration
page 134
Our approach
We adopt a ‘right first time’ mentality where the speed
and accuracy of delivery matters to clients and Partners.
This will be enabled by technology, process and data,
so we’re investing in Salesforce to enhance the experience
and efficiency of Partners and employees, to provide
the right information to the right people at the right time.
As we’ve become a bigger business, we’ve inevitably
become a more complex one, and so 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 anymore,
decommissioning systems we’ve outgrown or which
have become obsolete, and setting high standards
for the providers we work with.
We’ve already automated hundreds of tasks and we’re
looking for opportunities to take this further. With our
administration platform Bluedoor and Salesforce as the
backbone of our technology ecosystem, we can continue
to decommission legacy systems and improve how we
do things.
Our performance
We continue to develop tools around our Salesforce
systems, providing additional capabilities for the benefit of
our advisers and the broader SJP community. One example
of this is the launch of Advice Assistant, a tool that utilises
Salesforce and other data to simplify and automate
elements of the advice process for new ISA business,
freeing time for advisers and their support staff.
Simplifying our charging structure
We announced in October 2023 that we would
be simplifying our charging structure and
disaggregating our charges into their
component parts. This will support clients by
making it easier to compare charges for advice,
investment management and other services,
on a component-by-component basis.
We have commenced a broad and complex
programme to deliver these changes, investing
£150 million over the next two years to develop
the systems and processes that will allow our
new charging structure to be implemented in
the second half of 2025.
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Over
£25bn
Accumulated in our
Polaris fund‑of‑
funds range
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.
What we achieved in 2023 Our focus in 2024 Relevant links
We continued evolving our
investment proposition to
support great client outcomes.
Polaris, our recently launched
fund-of-funds range,
performed strongly and
attracted over £25 billion
of client investments.
We have strengthened our
Investment team through new
hires, including a new Chief
Investment Officer, Investment
Research Director and Head
of Economic Research.
We’ll drive improvement in
our investment performance
and proposition to support
clients in achieving their
financial goals.
We’ll enhance our investment
operational and risk control
environment.
Responsible business
Investing responsibly
Climate change
Client satisfaction
and retention
Executive remuneration
Client sentiment
Value Assessment Ratings
Delivery of fund and
portfolio changes
Carbon footprint of
investment proposition
Principal risks and
uncertainties
Client proposition
Responsible business
page 24
Risks and uncertainties
page 79
Executive remuneration
page 134
Our approach
We deliver a distinctive investment and financial wellbeing
proposition that ensures clients meet their financial goals
and recognises our responsibility to leave a lasting and
positive impact on the world we live in.
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.
Our long‑term client outcomes
A key aim of our investment management approach is
to deliver long-term investment performance for clients.
We offer a wide range of funds from which clients can
select, with the support of their Partner, to best meet
their individual needs and risk appetite.
While performance for clients will depend upon their
individual choice of funds, we have aimed to simplify
this by recommending portfolios across a range of
different risk profiles.
These portfolios have typically been in operation for over
ten years and have each demonstrated a strong track
record, with cumulative investment performance ahead
of peer indices since inception, resulting in strong client
outcomes:
Portfolio Launch Portfolio
1
Peer Indices
1
Managed Funds 2011 6.1% 4.9%
Adventurous 2011 7.0% 5.8%
Balanced 2011 4.5% 3.8%
Conservative 2011 3.1% 2.6%
Strategic Growth 2017 4.7% 3.3%
1 Annualised performance net of all costs, including those associated
with financial advice, from inception to 31 December 2023. Peer
indices are based upon the most appropriate ARC benchmark index.
Our recently launched Polaris fund-of-funds range
complements these portfolios with automatic fund
rebalancing between funds within a selected risk profile.
The range has already accumulated over £25 billion of
funds under management and while it is too early to
assess long-term investment performance, we’ll be carefully
monitoring to ensure that they meet our expectations.
Meanwhile, we have continued to make changes to our
fund managers where we felt that this would support
improved client outcomes in the future.
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Implementing our strategy
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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.
What we achieved in 2023 Our focus in 2024 Relevant links
We implemented a Group-
wide plan for compliance with
the Consumer Duty regulation.
We fully embedded our
refreshed brand identity, while
continuing to focus on our
reputation.
We’ll plan and roll out
announced changes to our
charging structure, supporting
our drive for strong client
outcomes.
We’ll improve our reputation
across key stakeholders,
through a nationwide
advertising campaign.
Responsible business
Financial wellbeing
Climate change
Inclusion and diversity
Policy influence
Client satisfaction
and retention
Executive remuneration
Client sentiment
Maintain reputation
Client servicing
Cyber security
Media sentiment
Client complaints
Regulator relationship
Internal audit, risk
and regulation
Principal risks and
uncertainties
Conduct
Regulatory
Security and resilience
Strategy, competition
and brand
Third parties
Responsible business
page 24
Risks and uncertainties
pages 79
Executive remuneration
page 134
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 aim to create a clear, compelling and robust brand
positioning, to enable SJP to become the most recognised
and ‘go-to’ financial advice business in the UK.
We will build our reputation as a strong and responsible
business that is trusted, considered and recommended –
so when people think of financial advice, they think SJP.
Our performance
During the year, we focused on implementing the FCA’s
new Consumer Duty regulation, and also embedded the
refreshed brand into business as usual.
Our current charging structure has delivered strong
client outcomes, but includes aspects that are difficult to
compare across the marketplace. We’ve announced plans
to update our charging structure from mid-2025, with these
changes improving comparability and supporting our
brand and reputation, broadening SJP’s appeal over time.
Implementing Consumer Duty
The FCA’s new Consumer Duty regulation came
into effect at the end of July 2023, setting higher
and clearer standards of consumer protection
across financial services and requiring firms to
act to deliver good outcomes for customers.
We have engaged proactively with this
important regulatory initiative. While we
consistently aim to achieve good outcomes
for clients, Consumer Duty has given us the
opportunity to strengthen this commitment
even further.
We’ve looked at every part of our business
through the lens of clients – the people who
trust us to help create the future they want for
themselves and for their families – and we’ve
examined how we provide evidence that the
processes and frameworks we have in place
deliver good client outcomes.
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Our culture and being a responsible business
We’re committed to being a purpose-led business that has a positive impact on society.
What we achieved in 2023 Our focus in 2024 Relevant links
We educated the SJP
community on our responsible
business strategy, narrative
and goals.
Our community raised
£9.5 million for the
St. James’s Place Charitable
Foundation, with Company
matching.
We made further progress
towards our Inclusion and
Diversity goals.
We accelerated work on our
climate transition plan and
made progress on reducing
our environmental impact.
We’ll enhance our culture
across the business, driving
an inclusive and empowered
environment for all colleagues
and the Partnership, and
maintaining a development-
focused approach that
supports the delivery of
our strategy and quality
client service.
Responsible business
Financial wellbeing
Investing responsibly
Climate change
Community impact
Executive remuneration
Embed culture vision
Carbon-positive
commitments
Financial resilience
and education
Community impact
Inclusion and Diversity
Principal risks and
uncertainties
Client proposition
People
Regulatory
Strategy, competition
and brand
Third parties
Responsible business
page 24
Risks and uncertainties
page 79
Executive remuneration
page 134
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.
Our performance
Throughout the year, we have focused on embedding
our Responsible Business Framework and educating
the SJP community on our strategy, narrative and goals,
and their role in helping us achieve them.
We have a significant role to play in the financial wellbeing
of society, whether through providing sound financial
advice or through our programmes to support financial
education, which have reached 10,000 children in 2023.
We’ve also generated community impact through ongoing
Partner and employee engagement, raising a total of
£9.5 million for a range of community programmes.
We have set an ambitious target to achieve net zero carbon
emissions in our investments by 2050. We’ve already made
good progress, with a reduction of more than 40% compared
to 2019, but we’re not stopping there and aim to make further
progress in the years ahead. Recognising the need for urgent
climate action we’ve intensified work on our Climate Transition
Plan and taken action to reduce our environmental impact in
support of becoming carbon neutral in our operations by 2025.
St. James’s Place Charitable
Foundation
The SJP Charitable Foundation,
having been established by the founders
of St. James’s Place in 1992, is one of the
core ways we give back to communities.
Since 1992, the SJP community has
helped raise more than £130 million,
including £9.5 million in 2023 to support
a programme of grants to small
and medium-sized charities.
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Implementing our strategy
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Continued financial strength
We’ll manage our resources carefully so we can continue to grow our
investment in our business.
What we achieved in 2023 Our focus in 2024 Relevant links
We attracted £15.4 billion
of new client investments.
We retained in excess of 95%
of existing client funds under
management (FUM).
We contained growth in
controllable expenses to 8%.
We increased FUM to
£168.2 billion and delivered a
robust Underlying cash result,
despite significant economic
and geopolitical uncertainty.
Maintained financial
strength despite recognising
significant Ongoing Service
Evidence provision.
We’ll manage controllable
expenses effectively through
the year, demonstrating
our continued focus on
cost discipline.
We’ll undertake a business
review to set clear direction
and goals out to 2030,
begin implementation and
articulate this to stakeholders.
Responsible business
Financial wellbeing
Risk management
Executive remuneration
Partner lending
Risk appetite of capital
Principal risks and
uncertainties
Financial
Responsible business
page 24
Risks and uncertainties
page 79
Executive remuneration
page 134
£168.2bn
Funds under management
2022: £148.4bn
Our approach
We have a straightforward financial business model.
Clients seeking financial advice are attracted by our
end-to-end integrated proposition, focused on great
long-term client outcomes. They trust us with their
investments and then stay with us, growing our 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 that we have a resilient capital position capable of
meeting our liabilities even in adverse market conditions.
Our performance
We have increased FUM to £168.2 billion by attracting
£15.4 billion of new client investments, while retaining
over 95% of existing investments, together with a positive
contribution from investment markets.
We have an ambition to reach £200 billion of FUM by the
end of 2025 and, while it will not be easy, we believe that
these growth ambitions are achievable given the market
opportunity, the quality of our proposition and the strength
of our Partnership.
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%, balancing
disciplined expense management with the need to invest
in the business for the future. While this has been difficult in
the short-term due to high inflation, we anticipate returning
to this target in 2024.
1 Controllable expenses are an alternative performance measure
(APM). For further information refer to the glossary of APMs.
Gestation: visible growth in future income
Our key profit driver is annual product management
charges arising on FUM. However, these are
currently waived during the first six years for
investment bond and pension products. Business
within this six-year period is known as ‘gestation
FUM’ and does not generate annual product
management charges. Gestation FUM of
£47.6 billion will gradually mature and begin
to generate annual product management
charges over the next six years, with a high
degree of visibility.
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At SJP, we’re committed to taking responsibility
for our actions and strive to have a positive
impact on our people, our communities,
and our planet.
Being a responsible business is core to delivering on our
promise of helping our clients create the futures they want.
From our work with local communities to minimising our
environmental impact, we aim to make choices that promote
a world that can meet the needs of everyone both now, and
in the future. In this section of the Annual Report and Accounts
we discuss our approach and the impact we’re making.
Our approach
At SJP, we recognise that we have both the responsibility
and the opportunity to use our voice as a force for good,
and we know we can drive positive change by considering
the long-term impact of our actions.
This requires us to look beyond ourselves and understand
the wider impact of our choices on our people, our
communities, and our planet. It means engaging with
others and collaborating on solutions to the shared
challenges faced by society today supported by a deep
understanding of the topics most material to us, the right
processes to achieve success, and metrics that provide
transparency on our progress.
We know that we might not always get it right and we
can’t do it all, but we are committed to the journey and to
making real progress. This commitment is brought to light
by the decision we have made to undertake a thorough
review of historic client servicing records and refund clients
if the delivery of ongoing service cannot be formally and
robustly evidenced. We recognise that this may result in a
disappointing outcome for shareholders in the short term
but are convinced that it is the right thing to do for our
clients and for our long term success.
We want to make it easy for all our stakeholders to
understand the work we’re doing and we align our
approach to the UN SDGs on pages 272 to 273 and
SASB standards on pages 274 to 275.
Our aim is to integrate and embed
the philosophy of responsible
business in everything we do.
Maria Spooner, Divisional Director,
Responsible Business
A focus on engagement
In 2023, we continued to bring our responsible business
journey to life for all our stakeholders. We created a
brochure for clients to share our goals, the actions
we’re taking and communicate our progress to date.
We also highlighted how they can support us to make
a positive difference – from switching to paperless
communication to considering where their money is invested.
We developed a responsible business workshop for
employees, covering the drivers of global change, the need
for action and the role they can play in helping us tackle
social, economic and environmental challenges.
We also launched a new ‘Responsible Business of the Year’
award, to recognise the Partner Practices within our
Partnership of advisers that are considering the wider
impacts of their actions. Everyone at SJP has a role to play
in helping us to act responsibly, and it was fantastic to see
so many advisers from across our community sharing their
own journey with us.
Our journey to date
We formalised our work on responsible
business, identifying the topics most
material to us and developed our
Responsible Business Framework
(hereafter our Framework) to give
structure to our approach.
2021
We set initial goals and metrics for each of
the topics within our Framework. Alongside
this we mobilised our new Responsible
Business Advisory Group to lead and
report on our progress.
2022
We built on our initial metrics to develop
a suite of key performance indicators to
help evidence progress towards our goals.
The Responsible Business Advisory Group
continued to drive our progress forward,
supported by our Inclusion and Diversity
(I&D), Climate Change and Financial
Wellbeing working groups.
2023
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Responsible
and sustainable
decision-making
Our responsible business
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Financial
wellbeing
Climate
change
Community
impact
Investing
responsibly
Our purpose
is to give you
confidence to
create the future
you want
St. James’s Place Responsible Business Framework
We know we can’t tackle everything. Our Responsible Business Framework helps us focus on the
areas where we can have the greatest impact.
To deliver good financial outcomes for our
clients, we consider relevant environmental,
social and governance (ESG) factors
throughout our investment process
With £168.2 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 28
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 26
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,
and building social capital within communities; and to
connecting the dots between the charities we support
and the social initiatives we run, by offering place-based
and skills-based outreach.
Page 38
Taking action on
climate change
Some of the issues facing
our world today can feel
overwhelming, and 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 reduce our impact.
Page 30
Our most material topics
People Governance
Bringing together material
topics that enable our
business to function and
grow sustainably.
Responsible relationships
Inclusion and diversity
Policy influence
Client satisfaction and
retention
Pages 40 to 45
Corporate governance
Risk management
Data privacy
Responsible procurement
Human rights
Pages 46 to 48
Our strategic enablers
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Financial wellbeing
Enhancing financial wellbeing for our clients, our people and our communities.
Our goals
Enhance clients’ long-term financial wellbeing
through face-to-face financial advice delivered
by qualified, expert advisers.
Help to improve long-term financial resilience in
society by providing financial education in schools
and to charities.
Enhance the long-term financial resilience of
employees through education and access to advice.
Our performance highlights
1,155
Chartered Planners
2022: 1,081
10,008
Young people reached
through financial
education
2022: 5,825
Our advisers and employees delivered 239 face-
to-face financial education sessions (2022: 150).
Including our direct delivery workshops plus those
provided through our partnership with charities,
we’ve reached 10,008 children in 2023.
Our focus for 2024
Continue to improve the financial literacy of our
clients.
Conclude our financial education Centres of
Excellence programme with Young Enterprise,
supporting 21 schools to achieve their accreditation.
We’re working hard to improve people’s financial lives.
We want to create a world where finance is easy to
understand, and where everyone feels in control of their
finances, confident in their plan, and excited for the future.
We do this through face-to-face financial advice, delivered
by qualified, expert advisers who make up our Partnership.
Our advisers work together with clients to create a detailed
financial plan to achieve their goals, helping them to make
confident and informed choices about the future.
We recognise that people are unique and need help in
different ways and at different times. We always put our
clients’ needs at the heart of every conversation and seek
to understand their individual circumstances, including
how much knowledge they have about money and what
financial wellbeing means to them.
However, it doesn’t just stop at our clients. We are
passionate about supporting the financial wellbeing
of our wider communities too. In 2023, this included the
support we give to our employees, the financial education
we deliver in schools, and the charities we work with to
support those most vulnerable in society.
Working with our clients in 2023
As cost-of-living challenges persisted, we continued
to build our ‘resilience in a changing world’ podcast to
help individuals feel more confident when navigating
challenging financial periods.
Our popular ‘vulnerability’ podcast series also grew,
focused on building the financial literacy of clients
in vulnerable circumstances.
We amended and strengthened our accessibility
offering, ensuring everyone is able to access clear
information to make their own informed choices.
“Financial literacy is a crucial part
of wellbeing and it is my mission
to provide financial education
to 10,000 children by 2023.”
Katie Ridland, SJP Senior Partner
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Supporting our advisers
We hosted our annual Chartered Symposium, offering
an array of technical and skills-based workshops.
Our Finance MBA, MSc and PhD programmes remain
market-leading.
To support adviser development, we launched
pioneering virtual reality training on cognitive
impairment in vulnerable clients alongside monthly
online vulnerability masterclasses.
Reaching further
Representatives from SJP have been appointed to
the Personal Finance Society Board, influencing industry
focus to support the financial wellbeing of wider society.
Two members of the SJP community won awards at the
Personal Finance Society Awards.
Our work with the Finance in Society Research Institute
continued, with growing engagement and collaboration
across the sector.
Our financial education programme
In 2023, we reached a total of 10,008 young people through
our financial education programmes, delivered by our
advisers and employees to schools and community
groups. We helped 6,487 young people through face-to-
face and virtual workshops led by employee and adviser
volunteers and 3,521 by providing resources and funding
to schools and charities, with a specific focus on areas
of deprivation. 81% of the young people who responded to
our feedback survey feel more confident managing their
money day-to-day after attending one of our workshops.
Our workshop materials have been through an extensive
accreditation process with the charity Young Money,
part of Young Enterprise, in association with the Money
and Pensions Service, to maintain their financial education
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, the Centre for Financial
Capability, Help for Heroes and Forces MoneyPlan.
Centres of Excellence
In 2022, we committed to sponsoring 21 UK schools to
become accredited ‘Centres of Excellence’ for financial
education in collaboration with Young Enterprise.
In 2023, we onboarded five schools to the programme,
with a total of 12 SJP-funded schools now signed up.
These schools are committed to ensuring their students
leave school with the knowledge, skills and confidence
to make informed and independent financial decisions.
We were delighted to celebrate the first SJP-funded
school achieving accreditation in November 2023,
with a proportion of learners clearly becoming much
more aware of the value of money and the importance
of saving.
In 2023, our funding also supported Young Enterprise in:
A review of their financial education lesson plans
and sponsoring to make them available for free
to schools within areas of multiple deprivation
(Index of Multiple Deprivation ranking 1-4). Over 180
schools have downloaded the materials to date.
Updating and improving their advisory service, to
provide practical advice and activities for schools
and other education establishments on how to
implement financial education in their setting.
Commissioning a piece of independent research
into what financial education support and training
special educational needs and disabilities setting
teachers need.
RedSTART
In 2023, we supported RedSTART with their ‘Change the
Game’ programme. The programme is a longitudinal
study into the impact of financial education as part
of the national curriculum. The five-year study will
compare two groups of primary school students;
one which receives financial education alongside
the curriculum and one which doesn’t. We anticipate
the outcome of this study will provide clear evidence
on the value of financial education at a young age
and support the case to have it embedded within
the primary school curriculum.
As well as providing corporate funding toward the
programme, 41 SJP volunteers facilitated 18 financial
education workshops reaching 607 students.
Financial education for employees
We updated our financial education toolkit for
employees, helping them to understand and manage
their finances no matter their background. It includes:
financial resilience podcasts; SJP Partner videos on
financial literacy; unique workshops designed for
different life stages; SJP employee pension and
benefit support. We also ran a series of monthly
financial knowledge building campaigns. For example,
following an employee survey on pensions, we ran an
awareness campaign to address gaps in knowledge
and signpost support.
LGBTQ+ proposition
Research shows that LGBTQ+ people face a host
of unique challenges and considerations when
it comes to their finances – from the higher costs
of starting a family to a disproportionate risk of
mental health problems, which can impact earning
potential and decision-making around finances.
In 2023 we evolved our proposition and created
collateral for our advisers to use to help address
the unique financial planning needs of the
LGBTQ+ community.
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Investing responsibly
To deliver good financial outcomes for our clients, we consider relevant
environmental, social, governance (ESG) factors throughout our investment process.
Our goals
Net zero in investments by 2050.
Embed responsible investing within our investment
processes and use our influence to maximise impact.
Have a complete responsible investment
proposition and supporting education programme
for advisers and clients.
Our performance highlights
43.8%
Reduction tCO
2
in our investments
2022: 32.8%
Since our base year of 2019, the weighted average
carbon intensity of our listed equity and fixed
income funds has reduced by 43.8%. This excludes
real estate funds and Rowan Dartington assets.
Our focus for 2024
We will set our next interim target, for 2030, and
continue to work hard with our external fund
managers to make progress in the years ahead.
With nearly a million clients, we know the importance of
clarity, simplicity and effective communication across
everything we do. Our commitment and approach to
responsible investing disclosures follows the same ethos.
Throughout 2023 we have developed our in-house
reporting capability and understanding of what this
means to our clients.
We’ve created the new role of Sustainable Investment
Writer to help deliver responsible and sustainable
communications that are clear, fair and represent both
our engagement activity and consideration of ESG risk
and opportunity when our fund managers are making
investment decisions.
We have undertaken an extensive programme of training
with employees and Partners to improve awareness of
our responsible investing principles and to avoid the risk
of inadvertent greenwashing. This has provided clients
with additional clarity on the benefits, and limits, of our
approach to responsible Investment.
“Validation of our process by once
again becoming a signatory to the
UK Stewardship Code certainly
demonstrates our engagement
capability. Our reduction in
carbon emissions since 2019
evidences the difference we can
make when we proactively
monitor and manage this risk.”
Sam Turner, Head of Responsible
Investment & Proposition Strategy
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ESG risks and
opportunities
Engagement
+
Responsible
investing
=
ESG risks and opportunities
All our core funds align with our responsible investment
approach:
High minimum standards: Our fund managers must
be signed up to the United-Nations-supported Principles
for Responsible Investment (UN PRI) and can’t invest in
companies on our exclusions list.
Fund research and monitoring: We monitor our fund
managers through our annual responsible investment
manager assessment. Our Investment Committee
has oversight of our fund managers’ ESG approach.
Analysis: We access company ESG data for extra
oversight and to challenge our managers’ processes.
Our engagement partner, Robeco, provides in-depth
company research which it uses to engage with
companies on our behalf.
In 2023 we continued to enhance our monitoring of fund
managers, delving deeper into their culture, stewardship,
decision-making processes, resource allocation and
alignment to relevant ESG factors.
Engagement
Engagement is how we encourage others to improve
their business practices through addressing ESG risks
and opportunities. There are four ways we do this:
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.
“Representing nearly a million
clients carries real responsibility
and privilege. Providing clients
with meaningful investment
solutions, to which they can align
their responsible and sustainable
values, will be pivotal for us.”
Petra Deavall, SJP Responsible
Investment Consultant
2. Our fund managers’ engagements with companies
While we don’t prescribe how fund managers should
meet our baseline standards, we do require them to
engage with companies on ESG issues. We monitor their
engagement activity through an annual assessment,
which requires them to provide evidence to demonstrate
their stewardship approach.
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, labour practices
in a post-COVID world, and responsible executive
remuneration. Throughout 2023, we continued our
quarterly client reporting on Robeco’s activity,
published on our website. The latest report can
be found at www.sjp.co.uk/products-and-services/
investment/responsible-investing.
4. Collaborating with industry
The UK regulator and government are driving standards
to encourage better sustainability practices and
disclosure across financial services. In 2023 we worked
with industry bodies and participated in forums to
influence regulatory direction, highlighting the needs
and expectations of our clients.
Find out more about our engagement approach in the
Stewardship and Engagement Report 2022 available on
our website at www.sjp.co.uk/products-and-services/
investment/responsible-investing. Published in the
second quarter of 2023, the report once again earned
us the right to become a signatory to the Financial
Reporting Council’s UK Stewardship Code.
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Climate change
We recognise the importance of leaving a lasting and positive impact on the world
we live in and are committed to supporting the transition to a lower-carbon economy.
2023 was the warmest year on record. We experienced
extreme weather events around the world, from wildfires
and droughts to extreme rainfall and heatwaves,
presenting yet more evidence of the devastating impacts
of our changing climate.
Research shows that progress toward 1.5°C aligned targets
isn’t happening at the pace and scale necessary, and that
urgent action is needed to protect the world’s most
vulnerable ecosystems and communities.
We recognise the need to accelerate climate action and
the role that businesses and individuals can play in driving
positive change. That’s why during 2023 we intensified work
on our Climate Transition Plan, building on our net zero
commitments, to help us better understand the role we
can play in providing a just, fair and inclusive transition
to a more sustainable economy.
As supporters of transparency we know that clear and
effective reporting helps build trust and accountability
for mitigating climate change. We support the increased
regulatory focus from the PRA and the FCA on disclosing
climate-related risks and opportunities and will move
to follow the IFRS Sustainability Disclosure Standards.
We welcome the issuance of these new standards which
begin to bring together the fragmented landscape of
voluntary and regulatory sustainability related disclosures
and provide a global baseline for the capital markets.
Our performance highlights
89%
Company fleet vehicles are electric or hybrid
2022: 83%
We have been working throughout 2023 to
encourage new company cars choices to
be electric and hybrid but from 2024 all new
company cars will be either electric or hybrid.
Our focus for 2024
We are accelerating work on updating our Climate
Transition Plan, evidencing how we are going to
achieve our targets.
We will continue to engage with the landlords of
our rented estate, advocating for the use of 100%
renewable electricity and having zero waste go
to landfill.
Our goals
During 2023 we continued to make progress on
our environmental approach. See our Group TCFD
report for in-depth detail on our approach and
progress www.sjp.co.uk/TCFD_group_report_2023.
Climate positive
1
in our operations by 2025
Net zero
2
in our supply chain by 2035
Net zero in our Partnership by 2035
Net zero in our investments by 2050
“By fostering a culture of
responsibility, businesses like
ours can create a meaningful and
lasting impact, contributing
positively to society and leaving
a legacy for generations.”
Tony Sareen, SJP Partner, TDS Financial Ltd
1 For us this involves not only offsetting carbon emissions, but also
taking additional steps to mitigate or sequester more greenhouse
gasses than are produced through our actions.
2 The amount of greenhouse gases produced by our activities will be
fully negated by a combination of emissions reduction and removal.
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Reduce
our footprint
and become
net zero
Conserve
our resources
Educate
our community
on climate
change
Embed
climate into
our decisions
Our approach to tackling climate change
Following the agreement of our net zero targets in
2021, our approach to reaching our goals is centred
around four key concepts:
Our climate governance
Accountability for managing climate-related risks
and opportunities is owned by the Board, which sets
the strategic direction of our approach on climate, and
with ultimate responsibility resting with our Chief Executive
Officer. The Board delegates some of this authority to
individuals and groups at an executive and senior level.
This includes the Responsible Business Advisory Group,
the Environment and Climate Change Working Group,
Group Risk Committee and Group Audit Committee, more
details on our climate governance can be found on page
46. Subsidiary boards hold the responsibility for corporate
governance for their respective companies, whilst the
overall approach to environmental governance is
determined at a Group level in line with our Group
climate strategy.
Throughout 2023, responsible individuals and groups
have benefited from training and individual engagement
sessions with both internal and external climate specialists
to support their operational evaluation, risk assessment
and strategic planning on climate-related matters.
Regular updates are provided to the Board and
environmental targets are included in the business plan,
on which the Board receives a detailed update twice a year.
The Board also considers climate as part of its articulation
of the Group risk appetite statement. This is where the
Board carefully sets out its appetite for risk against the
Group’s strategic objectives, which included ‘Our culture
and being a responsible business’.
Our climate risk management
Our climate-related risks and opportunities are
identified at a Group level, as our subsidiaries’ strategy
and operations are aligned to that of the Group there
is significant overlap. Where there are any climate-
related differences these are highlighted in the Group
TCFD report.
We proactively manage both the climate-related risks
and opportunities faced by the business itself, and the
indirect risks and opportunities to clients’ investment
choices. To inform our decision-making we facilitate
cross-functional workshops to explore potential
climate-related risks and opportunities which could
be directly or indirectly material to the business.
These include both physical risks, e.g. increased
frequency of extreme weather events, and transitional
risks, e.g. regulatory, market and reputational change.
These climate-related risks and opportunities are
assessed and reviewed through multiple lenses at
least annually by key stakeholders and subject matter
experts. This assessment is aligned to the Group’s Risk
impact matrix, calibrated to ensure we remain aligned
to our established Group Risk management framework,
more information on this on page 75.
In addition, sessions were held with the Group Executive
Committee, Group Risk Committee and a number
of subsidiary boards to consider our evolving and
emerging risk landscape. These sessions inform our
decision-making, action planning and risk oversight
processes, which feed into our strategy and financial
planning.
We consider climate-related risk to be a cross-
cutting risk. This means we evaluate its impact through
multiple risk profiles, including operational, market,
liquidity, regulatory and legal. This provides a holistic
understanding of cause and effect, and informs the
development of our strategy including appropriate
mitigation and monitoring.
Full details of our risk management approach are
available in the Risk and Risk Management section of
this Annual Report and Accounts, and climate-related
risks and opportunities in our TCFD report on pages
30 to 42.
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Our material climate-related risks and opportunities
We have identified and assessed potential climate-related risks and opportunities across the entire Group’s operating
model, assessing the likely timescales in which they could occur and the impact they may have. Our time periods reflect
the strategic five-year cycles that align with our financial sensitivity analysis approach as well as considering best
practice across our sector.
Significance
Our assessment of the impact
of climate-related risks and
opportunities is aligned to
our Group Risk Management
Framework.
Highly significant
Significant
Limited significance
Minimal significance
Timescale
When we believe the risk/
opportunity is most likely
to materialise.
S
Short term 0-5 years
M
Medium term 6-9 years
L
Long term 10+ years
Description, significance and timescale Impact on the business Mitigation
Transition risk
Market – client sentiment
S
M
The risk of potential clients choosing not
to invest with SJP and/or existing clients
divesting because our proposition
(including products, services and
investment solutions) does not meet
their expectations.
Client sentiment around the
suitability of our proposition in
meeting their preferences on
climate could impact the inflow
of new business and retention of
existing business. A drop in client
sentiment could also lead to
reputational damage for SJP.
We recognise that our ESG approach may not meet
the needs of everyone, but for those clients that require
a stronger focus on ESG we have a number of options
including our specialist Sustainable and Responsible
Equity Fund which invests in companies at the forefront
of transitioning to a sustainable economy. We also
ensure our fund managers meet specific minimum
requirements, with climate change being a material
factor we expect them to consider.
Market – investment risk
S
M
The risk of losses on financial investments
caused by adverse price movements,
e.g. climate-related events could
adversely affect investment values
through climate-driven market falls
or stagnation of growth.
We expect that markets are likely to
become increasingly volatile and
asset classes that we are currently
invested in may lose value, and we
therefore need to carefully consider
climate impacts and how we
manage our funds through our
investment approach. Lower
valuations would impact client
outcomes and the Group’s
profitability, which is directly
related to the value of funds
under management.
Investment risks are an inherent risk of our business,
and are fundamental considerations in our approach
to investment management. Our investment approach
draws upon a diversified, global pool of investment
opportunities. This aims to reduce concentration risks,
meaning our clients are less likely to suffer a significant
financial loss via sudden market changes. Furthermore,
our fund managers consider climate scenario
modelling as part of their investment decision-making;
more detail on this can be found on page 28 of our
Group TCFD report.
Regulation and legal
S
The risk of loss due to developments in
worldwide climate policy, legislation and
regulation. SJP and the fund managers
we work with could be exposed to
enhanced disclosure, governance and
risk management obligations, which
could potentially alter our proposition
offerings.
Keeping up with the rapidly evolving
landscape of regulatory and legal
requirements requires resource,
especially as SJP operates across
multiple jurisdictions with
requirements that do not yet fully
align (UK, Europe, Middle East
and Asia).
We don’t expect this to simplify
or stop evolving in the short to
medium term.
In order to keep pace with regulatory change
our business is continually reviewing resourcing
requirements, skills and capabilities to fulfil various
regulatory requirements. SJP collaborates across
our entities to ensure we are efficient and compliant
in our approach.
Reputational damage
S
The risk of negative publicity leading to
the loss of existing or potential clients.
This could be associated with perceived
greenwashing or failure to positively
contribute to tackling the challenges
of climate change.
This could lead to a drop in our
share price and less favourable
client sentiment.
We proactively minimise the risk of reputational
damage associated with climate change through:
Expressing our commitment to help shape a better
world by using our influence.
Working with our material third parties to ensure
their approach to ESG aligns to ours.
Providing clear data on the performance of all funds,
via the Annual of Value, and on their emissions in
our TCFD product report.
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Description, significance and timescale Impact on the business Mitigation
Physical risk
Acute
L
The risk of higher frequency or severity
of weather-related events such as
winter storms, surge floods, hail storms
and wildfires.
This could affect our operations by
damaging our premises and/or the
critical national infrastructure on
which we rely, and/or affect our
material suppliers and outsourcers.
Due to the nature of our business
and the resilience built into our
operations there is likely to be
minimal impact as we are not tied
to one specific geographic location
and can work flexibly.
We actively assess the risk posed by the
increasing severity of weather events through
risk assessments, and by evaluating the potential
impact of extreme weather events on our
operational capabilities and resilience. This analysis
helps us to assess and enhance existing business
continuity procedures as needed, to ensure we are
aware of and prepared for these types of events.
For example, analysing risks and potential impacts
created through outsourced activities and ensuring
suitable mitigationsmitigations are in place.
Chronic
L
The risk of loss due to longer-term
shifts in weather patterns, for example
sustained higher temperatures causing
sea-level to rise, hot or cold waves,
and droughts.
Due to its extreme nature, if this risk
were to materialise it would have an
impact on everything around us. As
a business we are generally resilient
to direct physical risks of climate
change but recognise that these
effects could have broad societal
and market impacts which may
have a significant impact on clients
and the Group in the longer term.
Our approach to mitigating this risk includes:
being a member of NZAOA and transitioning our
investment portfolio to net zero by 2050, ongoing
independent data monitoring, our active select,
monitor, change mechanism within our investment
management approach and flexible allocations of
our strategic assets.
These factors help us to respond to changing
economic conditions relating to assets,
geographies and emerging chronic climate risks.
Opportunity
Client offering
S
M
L
The opportunity arising from innovating
and developing new sustainable
investment solutions for our clients,
and demonstrating our commitment
to managing climate impact across
our clients’ financial journey.
A core pillar of our purpose as
a business is to meet our clients’
needs both now and for their future.
This is a key opportunity which,
if not seized, will impact on our
success today, tomorrow and
in the future; and could be key
to our long term success.
Our bespoke advice and tailored investment
management approach enable us to reflect
our clients’ wishes and long-term goals in their
individual solutions. For many clients, as well as
achieving their broader financial goal, an important
desire is to ensure that their investments support
a transition to a sustainable economy to help
minimise further damage from climate change for
future generations. This will look different for each
client. As such, we address this as part of the ‘plan,
design, review’ process, through which our advisers
are able to guide clients towards appropriately
aligned investment solutions.
SJP realises the reputational
benefits of being a responsible
business
S
M
The opportunity arising from innovating,
developing and embedding
a responsible business culture
and mindset across the business.
Realising this opportunity could
impact SJP through client retention
and a potential growth of market
share, driven by our reputation
as an authentically responsible
business. Increased trust, with all
our stakeholders acknowledging
that SJP’s approach, knowledge
and actions make it an attractive
place to invest, work and
partner with.
We only realise the benefits of being a responsible
business if we can demonstrate our values, and
those of our clients, consistently and authentically.
This includes ensuring any adjustments of our plans
are communicated in a clear and timely manner to
ensure this opportunity can continue to be realised.
Overall, SJP’s exposure to climate-related risks and opportunities is predominantly through our investment universe.
At a high level our core investment business model selects and monitors third-party fund managers to manage our
clients’ investments, rather than directly investing ourselves. The majority of our investments are held in listed and
publicly available financial assets, meaning there is flexibility to trade or change our asset allocation appropriately,
manage our climate risk exposure and take advantage of associated opportunities. However, we believe responsible
investing includes making decisions that support a smooth and just transition, and as such we consider the broader
social, economic and market impacts of divestment carefully. We principally take an ‘engagement first’ approach
to influence positive action. This approach to stewardship promotes market resilience as well as economy-wide and
enduring change. We believe change through stewardship and using our influence within invested companies is a
more effective way to support a just transition and mitigates unintended climate related consequences, including
the risks and effects of climate change. To read about our stewardship approach, targeted engagements or our
divestment policy please see more here: www.sjp.co.uk/stewardship_and_engagement_report_2022.
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For our scenario analysis we look specifically at our investment universe, as it represents a core part of our business model.
The central scenario analysis is based around three climate scenarios constructed by the Network for Greening the
Financial System (NGFS), an institution recognised for its research on climate pathways. Orderly, Disorderly and Hot House
World are the three specific NGFS scenarios we use; they are widely accepted as industry-standard pathways and provide
a broad range of future projections highlighting the impact of physical and transitional risk. It is important to remember
however that the scenarios do not (and are not intended to) predict the future, but rather give us some idea of how the
future might look based on certain assumptions. Please find more details on our scenario analysis on pages 264 to 271.
Our climate change metrics and targets
The NGFS scenarios highlight how an orderly transition to net zero by 2050 assumes low physical climate risk and limits
irreversible damage to our ecosystem. We recognise we alone can’t tackle the complexity and scale of an orderly
transition; rather it needs governments, business and individuals to collectively reach this outcome. Therefore, we believe
it to be in the best interest of SJP, our clients and wider society to advocate for an orderly net zero transition. Achieving an
overarching reduction in our emissions is a key part of mitigating climate change as a systemic risk facing SJP and society.
in 2023 the estimated total Group footprint was 13.6 million tCO
2
e, see the following pages for our emissions-related metrics.
Building upon these, and as our approach is maturing, we are developing targets to both manage climate-related
transition and physical risks and realise climate-related opportunities. This will enable us to quantify our progress against
these targets, which we look forward to reporting on.
Achieved
On track
Further work required
Metrics Our targets Progress
2023 % of
overall
emissions Commentary
Our operations
The direct impact we
have as a business
on the environment
We measure Scope 1, 2
(market-based) and 3
emissions in line with
Greenhouse Gas
Protocol and SECR
requirements as part
of our Annual Report
and Accounts.
Reduce our Scope 1
and 2 emissions by
50% by 2020
(base year 2016)
0.08% We assess our progress against our
operations, supply chain and Partnership
metrics annually. To help improve
monitoring of progress in our operations,
for our sole-occupied offices we have
developed utility analytical software.
This has helped us identify inefficient
systems and implement remediations,
particularly focusing on heating and
cooling system optimisations. This has
resulted in savings in our energy and gas
consumption of 5% and 7% respectively
in 2023, a reduction on the gains we
made in the prior year of 27% and 39%
respectively. More detail on our metrics
in the following pages.
Reduce our Scope 1
emissions by a
further 50% by 2025
(base year 2018)
Eliminate our Scope 2
(market-based)
emissions by 2025
Reduce our Scope 3
emissions by 50% by
2025 (base year 2018)
Our investments
The indirect impact
we have on the
environment as
a result of our
portfolio offerings
This includes a point in
time capture of the
Scope 1 and 2 emissions.
The scope of the data
represented is limited to
our equity and debt for
listed companies. It does
not include real estate or
Rowan Dartington data.
See pages 47 to 49 of
our Group TCFD report
for more detail.
Reduce the
carbon intensity
of our portfolios
by 25% by 2025
(base year 2019)
1
99.55% Our Investment team regularly use
our investment risk system, BlackRock
Aladdin, as part of their monitoring
workstreams and advocate an active
engagement process with our fund
managers. We are delighted that we
have continued to significantly exceed
our 2025 target well ahead of schedule,
with the carbon emissions intensity of
SJP’s overall investment universe at
end of 2023 reducing by 43.8% from our
baseline, compared to 32.8% at end of
2022. We will set a new interim target, for
2030, in the coming year.
Transition our
investment
portfolios to net zero
greenhouse gas
emissions by 2050
1
An interim target for
2030 will be set by
the end of 2024.
Our supply chain
The indirect impact
we have on the
environment as
a result of our
supply chain
We currently use a
spend-based method to
account for our supply
chain in line with
Category 1 guidance.
Our supply chain will
be net zero by 2035.
An interim target for
2030 will be set by
the end of 2024.
0.25% We have identified an initial ten
suppliers for focused engagement
to support the development and
progress of their climate-ambitions
and actions, and to begin gathering
their data to enhance our spend-
based emissions calculations.
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Metrics Our targets Progress
2023 % of
overall
emissions Commentary
Our Partnership
The indirect impact
we have on the
environment as
a result of our
Partnership of
financial advisers
We currently report
on an estimate of the
Partnership’s Scope 1
and 2 emissions, in line
with the Greenhouse
Gas Protocol.
We’ll support our
Partners to become
net zero by 2035.
We are aiming to
set an interim target
for 2030 by the end
of 2025.
0.11% To more accurately calculate the
Partnership carbon footprint we
began development of a bespoke
carbon calculator. This will enable
each Partner practice to accurately
calculate its emissions and develop
individual goals.
1 Equity and debt for listed corporates and real estate. This is approximately 88% of our overall AUM.
2 This Scope 3 target specifically focusses on Category 6 (business travel), Category 3 (fuel and energy related activities not included in scope 1
or 2 i.e. e.g. transmission and distribution ‘T&D’ losses and well to tank ‘WTT’) and, Category 5 (waste generated in operations) emissions.
We collect and report our environmental data on a one-quarter lag, so this year’s reporting includes data from 1
October 2022 to 30 September 2023. 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’. To calculate our emissions we have used the
2023 UK Government GHG Conversion Factors for Company Reporting, provided by the Department of Energy Security
& Net Zero (DESNZ) and the Department of Environment, Food & Rural Affairs (DEFRA). The emissions were calculated by
our external sustainability partner, EcoAct.
1. Targets
We are committed to doing our part to cap global warming at 1.5°C by 2050 and in 2019 we 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
We acknowledge more needs to be done to achieve our targets and have accelerated work on our Climate Transition
Plan to help us develop a detailed realistic and achievable plan.
ID Scope
Actual
emissions in
year (tonnes
CO
2
e)
% of target
achieved Comment
Abs1 1 572 63% Reductions across our estate continued, aided by our Carbon
Conservation Measures (CCM) tracking tool and utility analytical software.
Abs2 2 (Market-based) 689 -313% We continued to purchase 100% renewable electricity for our managed
estate. Up to 2020 we purchased additional REGOs
1
to offset our other UK
electricity use. This did not happen in subsequent years. This escalates
our work with the landlords of our rented estate, encouraging switching
to green electricity tariffs.
Abs3 3 7,431 57% We saw an increase in business travel, bringing us back in line with
pre-pandemic figures. We are renewing our efforts to reduce employee
travel related emissions.
1 Renewable Energy Guarantees of Origin certificates.
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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 2023. We have followed an
operational control approach to report our emissions. The coverage of our Scope 1 and 2 emissions disclosed is 100% for
2023. Any estimates included in our totals are derived from actual data which have been extrapolated to cover the full
reporting period. Please note 2022 Scope 2 market based emissions and Scope 3 Life and Pension Property Fund have
been restated this year. Categories 1, 2, 4, 7, and 8 to 14 have been assessed and agreed to be not material to our business.
Scope Description Unit
2018 2022 2023
UK
Global
(excl. UK) UK
Global
(excl. UK) UK
Global
(excl. UK)
1 Emissions from gas,
refrigerants and
owned vehicles
tCO
2
e 835 – 649 – 572 –
2 Location-based Electricity emissions using
geographical location
tCO
2
e 1,836 168 1,335 198 1,384 113
Market-based Electricity emissions using
purchased electricity factor
tCO
2
e – 168 967 198 578 111
1 & 2 Location-based Total emissions tCO
2
e 2,671 168 1,984 198 1,956 113
Market-based 835 168 1,616 198 1,150 111
Direct and indirect
energy consumption
kWh 10,451,833 263,607 10,367,808 301,819 9,726,267 224,976
1 & 2 Location-based Normalised emissions
to MWh
tCO
2
e/MWh 0.2556 0.6373 0.1914 0.6550 0.2011 0.5041
Market-based 0.0799 0.6373 0.1559 0.6550 0.1182 0.4955
3 Categories 3, 5
& 6
Business travel, waste,
hotel stays, WTT,
transmission and distribution
tCO
2
e 10,380 3,828 7,431
3 Category 15 Life and Pension
Property Fund
tCO
2
e 6,476 3,464 2,816
Total (Market-based) tCO
2
e 17,859 9,106 11,508
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 1.23 0.96 Our Scope 1 normalised emissions have reduced, helping to evidence the energy
efficiency measures we have implemented across our sole occupied estate.
For Scope 2 we have improved the quality of our data by increasing our landlord
engagement. We can’t guarantee that our normalised emissions for this are less
as we don’t have all the necessary REGO evidence for 2022. We plan to use 2023 as
a baseline for going forward and will continue to advocate for the use of renewable
electricity in our rented estate.
Unfortunately, our Scope 3 intensity has increased due to a rise in business travel
(aligning with pre-pandemic levels).
2 (Market-
based) 3.44 2.12
3 17.26 19.32
Our approach to offsetting
We know that purchasing carbon credits alone is not a long-term sustainable strategy for tackling climate change.
However, alongside working hard to reduce our emissions across our business, we consider it appropriate to supplement
our efforts with a considered approach to carbon offsetting. To be carbon neutral in 2023, and balance out our operational
emissions, we intend to offset 3,037 tCO
2
e. For more details please see page 17 of our Group TCFD report.
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Our Task Force on Climate-related Financial Disclosures (TCFD) Report
We are reporting against the TCFD framework for the fourth time this year. Given its size and scale, our comprehensive
2023 TCFD Report with all 11 TCFD disclosures can be found separately here: www.sjp.co.uk/TCFD_group_report_2023.
To aid readers of the Annual Report and Accounts, we provide a summary of the key Group disclosures from the
report below.
Summary of the Task Force on Climate-related Financial Disclosures.
We are fully consistent with the TCFD recommendations and recommended disclosures. We have also considered
the TCFD’s All Sector Guidance and consider SJP to be fully consistent with these.
Theme Description TCFD recommended disclosure 2023
Our disclosure in our
2023 TCFD report
Pages in
the 2023
TCFD report
Governance
Further
information
found in this
Annual Report
on pages 31
and 46
Disclose the
organisation’s
governance
around climate-
related risks and
opportunities.
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 including
references to training, KPIs
and linked remuneration.
We outline our accountable
leaders and provide more
context on our subsidiaries.
10 to 16, 18
to 19 and 31
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Strategy
Further
information
found in this
Annual Report
on pages 30
to 33 and 264
to 271
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.
a) Describe the climate-related risks
and opportunities the organisation
has identified over the short, medium,
and long term.
We have considered
and outlined our short-,
medium- and long-term
climate-related risks and
opportunities. Using this
assessment, alongside our
scenario analysis, we have
considered their significance
and impact on us as a
business, and have
incorporated the outputs
into strategic planning.
7, 16 to 27
and 44
to 49
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
Further
information
found in this
Annual Report
on pages 31
to 33
Disclose how
the organisation
identifies, assesses
and manages
climate-
related risks.
a) Describe the organisation’s processes
for identifying and assessing
climate-related risks.
We have outlined the
key climate-related risk
processes we follow to
identify, assess and manage
our climate-related risks
and opportunities, along
with an overview of how
we integrate this into our
risk management process.
30 to 42
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
Further
information
found in this
Annual Report
on pages 34
to 36
Disclose the
metrics and targets
used to assess and
manage relevant
climate-related
risks and
opportunities
where such
information
is material.
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
operational metrics, our
scope 1, 2 and 3 greenhouse
gas emissions, our progress
against targets and the
impact of our investment
proposition on our exposure
to carbon-intensive
companies.
7, 12, 32
and 44
to 49
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.
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Our goals
Generate community impact through
Partner and employee engagement.
Invest in local communities.
Improve the financial literacy of young people.
Our performance highlights
11.2m
Number of people
supported through
Charitable Foundation
Since 1992
£9.5m
Total amount SJP
community raised
in 2023
2022: £10.5m
Our focus for 2024
We will be working closely with charities to provide
support such as financial education and hands-
on practical help, as well as continuing to offer
funding for key work and projects.
Thank you
The Charitable Foundation is grateful for the
continued and generous support of the SJP
community both in the UK and Asia, and that of the
SJP 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.
Community impact
Since our very beginning we have embraced a culture of
doing the right thing and striving to have a positive impact
on the world around us.
Giving back to our communities has been a priority
for us since day one
We want to create lasting value in the places we live and
work, acting to make a difference to those less fortunate.
We do this financially through the SJP Charitable Foundation,
by volunteering our time and skills in the local community,
and through the delivery of our financial education
programmes with young people.
SJP Charitable Foundation
In 1992, the St. James’s Place
Charitable Foundation was
set up as a way for our
employees and the
Partnership to give back
and make a positive
difference in their local communities. Over 31 years on, with
the generous support of the SJP community, we have raised
£130 million. The funds raised provide support to small and
medium-sized charities across the UK and overseas
through a range of grant-giving programmes. Funding over
4,000 charities and supporting 11.2 million people to date, we
are now one of the largest corporate foundations in the UK.
1
The Foundation is committed to creating long-term
transformative change and takes a strategic approach to
grant-giving to support this. The Foundation’s grant-making
is focused across five key areas: children and young people
who are disadvantaged or have a disability, hospices,
cancer, mental health support, and the veteran community.
66%
Foundation beneficiaries
report a substantive or
transformational impact
on their life
2022: 64%
89%
Percentage of Group
employees involved in
supporting our communities
and good causes
2022: 90%
1 Source ACF Giving Trends Report 2022.
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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 volunteering with charities supported by the
Foundation, many in the SJP community also give
their skills and expertise to support initiatives in their
local community. In 2023 our employees gave over
9,900 hours of in-work time to support the Foundation
and other causes, such as litter picking, mentoring,
delivering financial education, acting as a Trustee
for a charity, volunteering for the emergency services,
renovating community spaces and more.
Our community members don’t just give during
work hours. We also encourage and recognise those
employees who volunteer in their own time by matching
their dedication with £300 grants awarded to the local
organisations they supported. SJP issued 57 of these
grants to our employees’ causes in 2023.
We also know that volunteering has a much broader
impact than direct support for beneficiaries. In our
annual community impact survey, of the 765 employee
volunteers who responded 86% reported that
volunteering improved at least one aspect of wellbeing
and 89% developed a skill that helped either their
personal or professional lives.
Responding to humanitarian crises
Sadly, the past year has seen an unprecedented
number of humanitarian crises unfold around the world.
The Foundation is committed to responding quickly,
working with leading humanitarian aid groups such
as the Disasters Emergency Committee and Red Cross
to provide essential support. For example, through
the support of the SJP community over £200,000
was donated to crises in Turkey and Morocco in 2023.
Many individuals also gave their time, with continued
volunteering supporting those affected by the ongoing
conflict in Ukraine.
Grants support sustainable organisational change for
grantees, giving them the confidence to grow and
support the development and delivery of services, which
have a lasting impact on the people directly benefiting.
For example, funding may go towards the salary of a youth
worker to support disadvantaged young people to develop
more positive pathways for the future or provide specialist
equipment for a young person who has disabilities, helping
them to feel more included. Alongside this, place-based
grants support communities close to the SJP offices, with
funding allocation determined by our Location Foundation
Committees, which are made up of passionate SJP
employees and advisers.
Creating added value
We also look to deepen our impact by providing additional
value to our partner charities through the SJP community.
This can take the form of skills sharing and volunteering
or reallocation of resources – for example from the
Apprenticeship Levy. The charities tell us that it’s this extra
support that really makes the difference – helping them
to build capacity, increase organisational resilience,
and expand their services.
928
The total number of
employees who volunteered
in work time
2022: 778
Envision is focused on empowering young people
who are underrepresented in the world of work.
We have partnered with Envision, via both multi-
year grants and volunteer support providing
mentoring. The feedback from the young people
has been extremely positive with 92% feeling that
they had developed their own essential skills and
96% feeling they had made a positive difference.
Dallaglio Rugbyworks supports young people
who are experiencing school exclusion. A multi-year
grant from the Foundation has helped to
extend their programme in an area of high
deprivation.
“St. James’s Place is one of our
longest standing partners; we have
worked together over a number
of years in different ways.
The generosity of the Charitable
Foundation and SJP community
goes way above and beyond our
expectations, truly helping us to
plan and shape our future.”
Zenna Hopson, Dallaglio Rugbyworks CEO
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Our people
The following section reports against our material people themes.
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 2023.
Employee engagement
Understanding employee sentiment is vital for a healthy
and progressive culture. We know that in order to be
successful and grow, employees need to feel included,
that they belong, and that they are able to thrive at SJP.
Our culture survey in May 2023 gave us a significant insight
into our current culture and demonstrated positive results
for overall engagement and efforts to create inclusive
environments, along with identifying some opportunities to
work more collaboratively across divisions. Key findings were:
I feel proud to work for this company – 87%
SJP creates an inclusive culture where everyone
is treated with fairness and respect – 77%
My line manager promotes an inclusive environment
at work – 93%.
To understand more about these survey results and
how we can improve them further, we worked with an
independent organisation to deep dive into our culture
data. We assessed the employee life cycle against the
FCA’s four drivers of culture: leadership, people policies,
governance and purpose. The report gave us greater
insight into our strengths as an organisation, as well
as highlighting some opportunities for greater focus.
This prompted a review of our Culture Wheel (an articulation
of our cultural aspirations through clearly defined values
and behaviours) to provide greater clarity on the role each
and every one of us plays in driving and delivering good
outcomes for clients.
We continue to focus on the effectiveness of our Workforce
Engagement Panel and, during 2023, we streamlined the
number of members so that we can ensure conversation
is meaningful, action-focused and at the right level –
discussing the issues and opportunities that feel most
relevant to our employees.
Our annual employee Impact Awards recognise individuals
and teams who demonstrate the SJP values and behaviours
in a way that goes above and beyond their day job. Outside
this annual recognition opportunity, colleagues can also
nominate peers for Impact recognition awards aligned
to our values and behaviours throughout the year. During
2023 the following awards/nominations were made:
1,118 financial impact awards
8,524 non-financial recognition awards
310 Impact Award nominations.
With the introduction of a Head of Culture and Engagement
role, we are committed to ongoing and deliberate focus
in culture and employee engagement. We know that
cultures are not created by chance and we are focused
on providing a clear strategy and direction of travel,
balanced by meaningful and tactical interventions to
ensure we continue to make progress and fully understand
opportunities for growth and improvement.
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Employee wellbeing
Employee wellbeing remains a key focus for ensuring
responsible and successful relationships. 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, BUPA Blue Health virtual GP
services and a biennial health check for all employees
(regardless of whether they are a BUPA member or not).
Employees have access to resources through a wellbeing
app which offers mental health consultations, access to a
digital GP, nutritional consultations and a second medical
opinion service. In 2023, we also provided nutritional
courses to support menopause and physical & mental
wellbeing. When needed, we assess what adjustments can
be made 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.
Our focus in 2024 is to develop a proactive, more
comprehensive wellbeing strategy where employees feel
supported and valued, and in which information available
and approach taken are consistent throughout the Company.
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 and
ethnicity pay bias. We report on our Ethnicity Pay Gap
alongside our Gender Pay Gap Report.
In 2023 we conducted an extensive review of our incentive
arrangements to ensure they are fully aligned to supporting
good client outcomes. We assessed all bonus and share
schemes to identify areas for improvement to ensure
our rewards reinforce a culture focused on the client.
As a result of the review, which will be conducted annually,
we have strengthened the link between behaviours and
bonus outcomes.
Learning and development
Our learning experiences for 2023 continued to empower
our Partnership and employees with the tools and
knowledge essential for success. Our comprehensive
learning curriculum guides, workshops and bespoke
leadership blueprint equipped our teams with the
skills needed to navigate technological advancements,
market shifts and industry trends. In 2023, our
development of blended learning experiences was
recognised with five industry awards, and we saw
an increase in our Learning and Development team’s
Net Promoter Score to 74.4% (2022: 65.52%) against
an industry average of 47%.
Tech and innovation
Our bespoke learning experience platform, SJP
House, launched in 2023 and has 93% regular user
engagement, highlighting our learner-led culture.
Virtual reality (VR) roleplay experience continues to
play an important part in our offering. We’ve expanded
our resources, developing content on identifying and
supporting vulnerable clients that incorporates 360°
films and AI-led roleplays. We have launched VR hubs
in office locations to provide more access to immersive
experiences, and we will continue to organise Company
and Partner events where VR can be experienced.
Our focus for 2024 will be to continue embedding VR in
our learning curriculum as well as exploring augmented
reality learning opportunities.
SJP Academy
The most comprehensive financial adviser training
programme in UK financial services
Our Academy programme went from strength to
strength in 2023. We continued to learn from each new
cohort, all of whom benefited from structured digital
content, face-to-face training and extensive coaching.
The Academy programme has been enhanced through
greater integration with our Growth & Development
function, giving recruits a further two years of dedicated,
specialised coaching. 2023 also saw the Academy win
Money Marketing’s inaugural ‘Best Adviser Academy’
award, recognising the dedication, expertise and skills
of our team and the achievements of our programme
participants.
87%
of employees feel proud
to work at SJP
2022: 87%
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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, helping
them achieve their financial goals.
We engage with clients throughout the year via our ‘SJP
Client Community’, 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.
Retaining satisfied clients not only feeds into financial
results, but is also directly related to our long-term
sustainability as a business. In early 2023 we conducted a
survey with our client population (57,531 clients responded).
The feedback indicated good client sentiment with 79%
clients strongly advocating for us, nearly half already
recommending SJP, 66% believing we offer excellent or
good value for money and 81% being very satisfied or
satisfied with their overall experience with us.
However, we believe that macroeconomic uncertainty and
investment market performance impacted client sentiment
contributing to a 6% drop in overall satisfaction. In addition
to wider macroeconomic challenges, 2023 saw an increase
in the number of clients registering complaints about
whether they have received ongoing servicing. We have
taken this very seriously and have undertaken an
assessment of historic client servicing records. Where gaps
in record keeping mean that there is a lack of evidence of
the delivery of ongoing service, we are in the process of
refunding these fees for clients. We know the delivery of
ongoing services is vital to maintaining our clients’ strong
trust and advocacy.
Trend
Advocacy
87%
90%
78%
79%
2020 2021 2022 2023
2023 detail
Advocacy
79%
Positive
49% Yes, I’d be willing to, and
have done so already
30% Yes, I’d be willing to,
but haven’t previously
9% No, I wouldn’t feel
comfortable doing so,
and haven’t previously
12% No, I wouldn’t feel
comfortable doing so,
but have done so
previously
Value for money
72%
83%
63%
66%
2020 2021 2022 2023
Value for money
66%
Positive
26% Excellent
40%
22%
8%
4% Very poor
Overall satisfaction
86%
94%
87%
81%
2020 2021 2022 2023
Overall satisfaction
81%
Positive
44% Strongly agree
37%
12%
5%
2% Strongly disagree
79%
Positive advocacy
2022: 81%
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3
3
7
5
2022
MaleFemale
2023 2022 2023
18
16
45
37
2022
MaleFemale
2023 2022 2023
89
108
233
206
2022
MaleFemale
2023 2022 2023
1,427
1,214
1,343
1,084
2022
MaleFemale
2023 2022 2023
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 tracked regularly through our Responsible
Business Advisory Group, with support from our I&D Working
Group and Community Networks. We report regularly on
I&D to our Board, Group Executive Committee (GEC), and
Group Nomination and Governance Committee, and the
accountability of our GEC is evidenced through its
objectives which include measures around equality
and diversity.
Public commitments
SJP became a signatory to the Women in Finance Charter
in 2018, committing to increase representation of women in
senior roles to 30% by September 2023. When we signed the
charter, only 18.6% of our senior roles were held by women.
We are pleased to have made steady progress since then,
and in September 2023 we achieved our commitment
with 30.4% female representation in senior roles, an 11.8%
increase since we first started reporting. This increase
reflects the action we’ve taken to build and support our
internal female talent pipeline and to increase applications
from female candidates.
Female representation in senior roles reached 34.4%
in our employee base and 37.5% on the Board as at
31 December 2023.
Our minority ethnic representation is 8.2%, based on
75.3% of our core employee base who voluntarily provided
ethnicity data, a 1.9% increase from 2022. Whilst we are
tracking slightly below our goal of 10%, we are encouraged
by the progress we have made and know that every
increase, however small, is an important step in the
right direction.
Our focus remains on sustaining and accelerating this
progress and we will be setting new long-term goals in
2024 to reinforce this.
Board Directors
Group Executive
Committee,
Company
Secretary
and their
direct reports
Managers and
decision-
makers
Total employees
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 Group Executive Committee, 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 know that we need to better represent the society
and the clients we seek to serve, and have been working
to increase representation of diverse talent at SJP. We’re
also focused on how we can make a career in the financial
services more attractive and accessible to all, helping to
strengthen the external pipeline of talent in our sector. In
2023 we hired 19 school leaver apprentices, developing
talent in the communities where our offices are based.
We continue to use gender-coding software for our job
adverts and aim for gender-balanced shortlists and
interview panels. We capture diversity data in our
recruitment process, so we can better track the diversity
of our newest employees, advisers and Partners. We’ve
introduced a hybrid working policy to provide greater
flexibility for part-time work, job-sharing, remote working,
and flexibility on hours. In 2023, we also implemented a
new visa sponsorship policy to widen the size and diversity
of our potential talent pools.
We have continued to focus on disability and accessibility,
including the implementation of a workplace adjustments
policy. We worked with Patchwork Hub to deliver disability
awareness training to our recruitment team. In our
Academy, we partnered with Kaleidoscope to conduct
an end-to-end review of our application and onboarding
process, assess our Academy curriculum content, and
deliver disability awareness training to our Partnership
Recruitment Managers. We were delighted to be re-
accredited as Disability Confident Leaders this year
in recognition of this work.
Retaining diverse talent
We continued to listen to the experiences of our community
through our Workforce Engagement Panel as well as
providing employees access to an anonymous feedback
platform all year round. We also hosted a focus group on
inclusion and belonging – giving both employees and
advisers a safe space to speak up and challenge.
We collaborated with our Community Networks to drive
engagement and understanding, including the celebration
of I&D events throughout the year such as
Pride;
International Women’s Day;
International Men’s Day; and
Black History Month.
These events are intended to raise awareness of key
issues and provide the opportunity for open discussion
and learning in a safe environment. Representatives from
each of the networks also sit on our I&D Working Group,
helping to evolve our approach to I&D and drive action
against our goals.
Gender
Female 53.2%
Male 45.6%
Non-binary 0.2%
Other 0.0%
Prefer not to say (PNS) 1.0%
Sexual orientation
Heterosexual 93.0%
Bisexual 2.2%
Gay/lesbian 1.3%
Other 0.3%
PNS 3.1%
Ethnicity
White 90.8%
Asian 5.1%
Mixed 1.7%
Black 1.2%
Other 0.1%
PNS 1.0%
Disability
Without a disability 85.1%
With a disability 12.4%
PNS 2.6%
“Signing up to the Women in
Finance Charter in 2018 was one
of the first public actions we took
to improve diversity at SJP.
I’m delighted that we have achieved
what we set out to do, but I am also
clear that there is still work to be
done. Attracting, developing and
retaining diverse talent is a key part
of our future sustainable success.”
Liz Kelly, Chief Corporate Affairs and People Officer
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Race and ethnicity
Executive management
1
91.7%
White
2022: 92.2%
6.7%
Asian, Black, Mixed, Other
2022: 6.1%
1.6%
Prefer not to say
2022: 1.7%
All other employees
90.6%
White
2022: 92.7%
8.4%
Asian, Black, Mixed, Other
2022: 6.3%
1.0%
Prefer not to say
2022: 1.0%
Developing diverse talent
We continued to develop our internal talent pipeline. Building
on our success with internal mentoring available to all SJP
employees, we also completed our sixth year with the 30%
Club, offering 30 mentors and matching 30 female mentees
with mentors outside of the company from a cross-section
of industries and sectors. 2023 was the second year of
our in-house mentoring programme for talented women
in the pipeline for senior roles. The programme facilitates
mentoring by senior leaders, as well as access to
masterclasses and roundtables with the Group
Executive Committee.
Beyond SJP, we engaged in programmes to accelerate the
drive for greater diversity in our sector, such as sponsoring
three female students through the EY Foundation
Sustainable Futures Programme. We also supported the
Aleto Foundation mentoring programme for a third year,
with senior leaders from across our business providing
mentorship to aspiring young talent from disadvantaged
backgrounds.
Training
In 2023, we continued to roll out our I&D toolkit, which
is based on four core principles: being representative,
being accessible, being inclusive and avoiding bias.
We also launched our ‘Inclusivity Boxset’ – a collection
of digital training materials to help our entire community
to embrace diversity and work more inclusively. The boxset
includes content on running inclusive meetings, navigating
difficult conversations, demonstrating inclusive leadership
and understanding micro behaviours. This was
accompanied by mini boxsets on neurodiversity and
LGBTQ+ inclusion, which were created in collaboration
with our SJPride and Disability Networks.
A focus on data and reporting
In 2021, we launched our employee diversity
data survey, which created a better picture of our
community and helped identify where we might be
missing diverse perspectives. Since then, over 75.3%
of employees have shared their data with us, with
the insights being used to direct the support we give
and initiatives we run.
Crucially, the collection of this data enabled us to
voluntarily publish our first Ethnicity Pay Gap Report
in April 2023. Although only representative of the 70.4%
employees that shared their ethnicity data, the report
provided us with an initial benchmark and enabled us
to identify any gaps and work to close them. We know
that providing greater pay transparency is crucial and
helps build trust with all our stakeholders.
Policy influence
We aim to leverage our scale, influence and expertise to
position SJP as a trusted partner with policy stakeholders.
Giving SJP a voice on the issues that matter to us and
to society will mitigate emerging risks, help us shape
the public policy agenda, and better enable us to drive
change for society in line with our founding principle
of ‘giving back’.
In 2023, we proactively engaged policy makers and
regulators on several of our material topics including:
the advice/guidance boundary and pensions
the labelling framework for sustainable investing
inclusion and diversity in the financial services sector
reallocating dormant assets to financial education
in the national curriculum
the role of audit committees in environmental, social
and governance (ESG) reporting
finance for positive sustainable change.
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.
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.
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Governance
The following section reports against our material governance themes. We have specific governance forums at Board,
executive and management level which oversee and manage responsible business-related risks and opportunities for
the wider Group as displayed below for 2023. The authority for ESG is delegated to executives, with the Board holding
ultimate accountability for the Group’s position and strategy regarding ESG.
Group Executive Committee (GEC)
Chief Executive Officer
The CEO is supported by the GEC,
who facilitates the execution of
responsible-business-related
activity. Ultimate accountability
for our climate approach sits with
the CEO.
Chief Risk Officer
The CRO is supported by his Risk
Oversight Group, which provides
oversight of the effectiveness of
the Group’s risk management
framework, including climate-
related risks and opportunities.
SJP plc Board
The Board sets the strategic direction in relation to our responsible business approach.
This covers our entire Framework with key focus on our pillars: financial wellbeing, investing responsibly,
climate change and community impact.
Group Audit
Committee
The Group Audit Committee
reviews key regulatory
reports including the Task
Force on Climate-Related
Financial Disclosures report.
Group Nomination and
Governance Committee
The Group Nomination and
Governance Committee
reviews biannual updates
on our responsible business
strategy with an I&D focus.
Group Remuneration
Committee
The Group Remuneration
Committee reviews key
regulatory reports including
our Pay Gap reports.
Group Risk
Committee
The Group Risk Committee
supports review of
responsible business
risks including our
climate-related risks.
Investment Executive
Committee
The Investment Executive
Committee is responsible for
executing responsible investment
principles, supporting clients to
invest responsibly and driving
positive outcomes for our clients.
Responsible Business (RB)
Advisory Group
The RB Advisory Group is responsible
for driving forward our responsible
business ambitions, including
climate change. The group covered
climate change topics at four
meetings in 2023.
Financial Wellbeing
Working Group
The Financial Wellbeing Working
Group helped develop SJP’s
financial wellbeing goals and
KPIs and supported evolving
the approach throughout 2023.
Inclusion and Diversity
Working Group
The Inclusion and Diversity Working
Group helped develop the Inclusion
and Diversity goals and KPIs, and
supported evolving the I&D approach
throughout 2023.
Environment and Climate
Change Working Group
The Environment and Climate Change
Working Group helped develop the
goals and KPIs of our climate change
pillar and met three times in 2023 to
support evolving our approach.
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Corporate governance
Data privacy
We know how important it is to demonstrate responsibility
as data custodians to protect the privacy of all those we
interact with. This 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 therefore 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 2023, we continued to build our central data capability,
led by the Chief Data Officer, which included the
implementation of best-in-class data intelligence, quality
and governance tools and the appointment of a team of
data experts. We continue to focus on our aim of giving
clients, Partners and employees access to information they
can trust, which we will achieve through a simplified data
architecture, reusable data analytics products, and data
management processes that focus on data governance,
data quality and data intelligence. Our data policy can be
found here: www.sjp.co.uk/site-services/privacy-policy.
Risk management
We continually enhance our risk culture, which supports our
vision and purpose. Robust risk management, underpinned
by a strong risk culture, is a key foundation of our success
as a responsible business. An active approach to risk
management across the organisation ensures we make
informed decisions, balancing the opportunities that risk-
taking brings within our risk appetite, in a complex and
rapidly changing external environment.
The risk environment faced by the Group continues
to evolve, 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 the 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 74 to 84.
Responsible procurement
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 and outsourcers.
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.
In 2023, we reviewed our responsible business questions
for supplier due diligence through a stronger ESG lens.
We reviewed and updated our minimum requirements
for all suppliers to ensure they meet our ESG standards.
We have been a member of the Living Wage Foundation
since 2014, and assess, where applicable, how our third
parties remunerate their workforce. In some cases,
we have ensured our commercial agreements reflect
this requirement and we 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,
and Trade (DBT) and demonstrates our commitment
to good payment practices between ourselves and
our suppliers.
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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. We are committed to respecting and
supporting the protection of internationally proclaimed
human rights, including those contained within the
International Bill of Human Rights. SJP applies the
UN Guiding Principles on Business and Human Rights
in our approach.
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 seek to secure
evidence of good practice in relation to human rights.
All employees have access to a copy of our code of ethics
and equal opportunities policies, which make it clear that
we oppose all forms of unfair discrimination or victimisation.
We periodically review our code of ethics and plan to
update it in 2024. 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.
Recognising the role that everyone in our organisation
plays in preventing human rights abuses and modern
slavery, in 2023 we developed training to increase
awareness and to educate and empower our employees
to play their part.
We respect the dignity of the individual and support the
right of employees to freedom of association, join trade
unions and engage in collective bargaining in accordance
with local law.
Anti-bribery and corruption
We have a zero-tolerance approach to bribery and
corruption and aim to protect the SJP Group, our clients,
shareholders, employees and associated companies from
any involvement. Our Board has responsibility for oversight
of the Group’s financial crime prevention policy, which
includes anti-bribery and corruption, and reviews this
annually. We also have a whistleblowing policy which
all employees are made aware of. Our employees and
advisers are provided with annual training on money
laundering and biennial training regarding other financial
crimes including fraud, bribery and corruption, through
mandatory online training programmes. In 2023, none
of our employees were dismissed or disciplined due to
non-compliance with our financial crime prevention
policy nor was SJP issued any associated fines or penalties
relating to corruption. Our policy statement regarding
anti-bribery and corruption, which gives further detail,
is available on our website at www.sjp.co.uk/about-us/
corporate-governance.
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Our responsible business
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Non-financial and sustainability information statement
This section of the Annual Report and Accounts 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 and Accounts, 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
Relevant policies, documents,
or reports that set out our approach Section(s) and page(s)
Anti-corruption
and anti-bribery
Group Financial Crime Prevention Policy
SJP Anti Bribery and Corruption policy
Confidentiality Policy
Our responsible business (page 48)
Business model Our business model (pages 10 and 11)
Climate-related
financial
disclosures
Governance structure (pages 31 and 46), Systems
and processes (pages 31 to 33), Integration with wider risk
management (page 31), Material risks and opportunities
and time periods (pages 32 and 33), Impact of material
risks and opportunities (pages 32 and 33), Resilience
assessment (pages 34, 264 to 271), Targets (pages 34
to 35), Measuring progress (pages 34 to 37)
Employees
Whistleblowing Policy
Inclusion and Diversity Policy
Health and Safety Policy
Equal Opportunities Policy
Employee Handbook
Employee Reward Policy
Flexible Working Policy
Stakeholder engagement (page 8), Building community
(page 18), Our responsible business (pages 40 to 45),
Risk and risk management (page 80), Section 172
statement (pages 90 to 96), Board composition,
succession and evaluation (pages 104 and 105),
Report of the Group Risk Committee (page 122),
Report of the Group Nomination and Governance
Committee (pages 125 to 128), Directors’ report (page 160)
Environmental
matters
Outsourcer and supplier management policy
TCFD Report 2023
Our responsible business framework (page 25),
Climate change section (page 30 to 37), Risk and
risk management (pages 78)
Non-financial key
performance
indicators
Our business model (page 11), Our responsible business
(pages 26, 28, 30, 34 to 36, 38, 41 to 43 and 45)
Principal risks
Risk Management Framework
Group risk appetite statement
Risk and risk management (pages 74 to 84)
Respect for
human rights
Whistleblowing policy
Modern Slavery Statement
Grievance Procedure Policy
Equal Opportunities Policy
Our responsible business (page 48)
Social matters
Group Financial Crime Prevention Policy
Community Engagement and
Volunteering Policy
GDPR and Data Protection Policy
Our responsible business (pages 24 to 49), Corporate
governance report (pages 92 to 97), Report of the Group
Nomination and Governance Committee (pages 127
to 128)
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We are pleased to report a year of robust
underlying financial results, despite a
continued challenging operating environment.
Our underlying business has performed well, delivering
growth in average funds under management (FUM) and
therefore fee income. Paired with continued discipline in
managing controllable costs in line with guidance, this has
enabled us to deliver a pre-tax Underlying cash result that
is broadly in line with the prior year, albeit 4% lower on a
post-tax basis due to the impact of a higher corporation
tax rate in 2023.
In the context of an external environment that has been
challenging for our industry, this outcome for 2023
highlights that our underlying business performance is
robust, putting us in a good position for a bright future
despite the near-term challenges we face.
Our reported financial results for 2023 have been
significantly impacted by the Ongoing Service Evidence
provision that we have established following the
appointment of a skilled person and an assessment
undertaken into the evidencing and delivery of historic
ongoing servicing. The anticipated cost of refunding
ongoing servicing charges, together with the interest,
and the administrative costs associated with completing
the work, is reflected in our Financial Statements through
an Ongoing Service Evidence provision of £426.0 million,
which is £323.7 million net of tax within the Cash result.
Our financial results are presented in more detail on pages
54 to 73 of the Financial Review, but this report provides
a summary of financial performance on a statutory
International Financial Reporting Standard (IFRS) basis,
as well as our chosen alternative performance measures
(APMs). We also summarise the progression of our FUM
and provide shareholders with an overview of our
balance sheet.
Funds under management
Client capacity and confidence to commit to long-term
investment continues to be impacted by the economic
environment and the short-term alternative arising from
elevated cash deposit rates.
While this has presented a challenging backdrop, our
new business performance has remained robust, with our
advisers attracting £15.4 billion (2022: £17.0 billion) of new
client investments, and client retention rates remaining
strong at 95.3% (2022: 96.5%). As a consequence, we
continue to generate significant levels of net inflows,
once again demonstrating the resilience and strength
of our advice-led business model.
The combined impact of ongoing net inflows and strong
investment performance during the year has resulted in
FUM increasing by 13% to a record £168.2 billion (2022: £148.4
billion). Growth in FUM, and indeed an accelerating balance
of gestation FUM maturing in the coming years, provides
our business with good visibility over future growth in
income and the creation of sustainable value for
shareholders over time.
Financial results
IFRS
As is often the case, IFRS profit before tax of £439.6 million
(2022: £2.8 million) and IFRS loss before shareholder tax
of £4.5 million (2022: £503.9 million profit) are each heavily
distorted by the inclusion of policyholder tax and the
associated charges, with further detail included in the
Financial Review on page 57.
Excluding the short-term impact of items related to
policyholder tax, IFRS profit before shareholder tax is
subject to similar drivers as those described for the Cash
result below.
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 Underlying Cash result of £392.4 million for 2023
(2022: £410.1 million) is 4% lower than the prior year.
Excluding the impact of an increased rate of corporation
tax, the Underlying cash result is broadly unchanged,
representing a robust result in a challenging market
environment. The Cash result of £68.7 million for 2023
(2022: £410.1 million) has been significantly impacted by
the Ongoing Service Evidence provision that we have
established. More detail is set out below and in the financial
review on pages 59 to 67.
During the year, the Net income from funds under
management was £599.2 million (2022: £607.7 million),
comprising an increase of 4% on a pre-tax basis, together
with the impact of a higher rate of corporation tax. This
outcome reflects an increase in average mature FUM,
including a contribution of over £40 million from gestation
balances that matured during the period.
For the first half of 2023, our margin range for net income was
0.59% to 0.61%, reducing by 0.04% from August 2023 to a range
from 0.55% to 0.57%, reflecting the introduction of a charge
cap applicable to bond and pension investments with a
duration longer than ten years. Looking forward, 2024 will
see the corporation tax rate of 25% being applicable for the
whole year, with the effect being to further reduce our margin
range by 0.01%, resulting in a range from 0.54% to 0.56%.
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Robust underlying
financial results
Chief Financial Officer’s report
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“The combined impact of ongoing net
inflows and strong investment
performance has resulted in funds
under management increasing by 13%
to a record £168.2 billion, providing a
strong positive indicator of future
growth in profits.”
Craig Gentle, Chief Financial Officer
£168.2bn
Funds under management
2022: £148.4 billion
This margin range is applicable to average mature FUM,
excluding discretionary fund management (DFM) and Asia
FUM, in line with prior guidance. It is this mature FUM that
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.
Under our current charging structure, new life and pensions
business does not contribute annual product management
charges for the first six years after the business is written.
This means that the Group has six years’ worth of FUM in the
gestation period that does not materially contribute to the
Cash result. At 31 December 2023, the balance of gestation
FUM stood at £47.6 billion (2022: £45.5 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 in 2024 and new
charging structure in 2025) contribute in excess of a further
£270 million to annual net income from FUM 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 2023
largely reflects the decrease in gross flows over the year,
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.
Controllable expenses are a key metric for the business
and despite the persistence of high inflation we contained
the annual growth of controllable expenses in 2023 to 2%
on a post-tax basis (2022: 5%), in line with the guidance we
set out early in the year. We are currently budgeting to
contain growth in controllable expenses for 2024 to 3%
post-tax, or 5% pre-tax.
Growth in income, coupled with this management of
controllable expenses, has enabled us to deliver a resilient
underlying financial performance despite significant
short-term challenges.
In addition to these key components of the Cash result,
we have seen an increase in Shareholder interest, which
represents the interest earned on shareholder working
capital and business loans to Partners. We have also seen
a short-term reduction in the FSCS levy as a result of a prior
year surplus that had built up within the FSCS scheme.
Partially offsetting these effects is a reduced benefit from
Tax relief from capital losses as we utilised our remaining
historic balances, with the result being that this line will no
longer feature in the Cash result going forward.
Reported as a Miscellaneous cost, we have seen a
significant increase in client complaints over the last
12 months as a result of the activity of claims
management firms.
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European Embedded Value
We supplement our IFRS and Cash results with additional
disclosure on a European Embedded Value (EEV) basis,
providing a measure of the total value that might be
expected to arise over the lifetime of the existing business,
though without making any allowance for new business
that may be written in the future.
The EEV result has been significantly impacted by the
changes to our charging structure that we announced
during the year. As a result of these changes, the
contribution to EEV operating profit from new business
written in the year has reduced. It has also been necessary
to remeasure the future cash flows expected to arise from
our existing business, with the impact reflected in an
exceptional item of £2,506.6 million.
The EEV operating profit before exceptional items for the
year is £1,041.0 million (2022: £1,589.7 million), reflecting a
lower contribution from new business, which is impacted by
reduced inflows and the effects of changes to our charging
structure, as well as the significant benefit of persistency
assumption changes in 2022.
The EEV operating loss after exceptional items for the year
is £1,891.6 million (2022: £1,589.7 million profit), reflecting the
exceptional items of £2,932.6 million arising from changes
to our charging structure during the year, as well as the
impact of the Ongoing Service Evidence provision that we
have established.
The EEV loss before tax for the year of £1,387.4 million (2022:
£510.8 million profit) has benefited from a positive
investment return variance of £501.7 million (2022: negative
£1,314.0 million). The positive return reflects increased
market values across our FUM that exceeded our long-term
assumptions, and this compares to a significant negative
impact from market returns in 2022.
The EEV net asset value per share was £14.11 at 31 December
2023 (2022: £16.66).
Charge Structure
During the year we made some important changes related
to our charges, ensuring both compliance with an evolving
regulatory environment, and the creation of a sustainable
charging platform that will see the business thrive over the
long-term.
In July, we announced the introduction of a fee cap on
long term bond and pension investments which came
into effect in August 2023. Later in the year, we announced
the conclusion of a comprehensive review of our client
charging structure, resulting in simplifying charging from
the middle of 2025 that will improve comparability across
the marketplace and enable a clearer articulation of the
value that we provide to clients across all elements of
our proposition.
The effect of these changes will be to reduce the net
income margin range by 0.11% to a range between 0.43%
and 0.45%, though this will be applicable to all FUM once
the existing gestation FUM has matured, with no further
concept of gestation. There will also no longer be a
material contribution from margin arising on new business.
These changes will impact the shape of our financial
results over time and will require investment in systems
and processes in order to deliver. However, they will result
in long-term simplicity and comparability, which can only
strengthen our proposition, our brand and our reputation.
They also give us confidence that we can grow the
business without the need for further changes to our
charges that would impact the guidance set out above.
Financial position
Our prudent approach to managing our balance sheet has
ensured that we have more than sufficient funding
capacity to cover the financial implications of setting up
the Ongoing Service Evidence provision. We are confident
that the provision we have set up is sufficient. We have,
however, arranged access to an additional £250 million of
credit which we do not anticipate utilising, but which
provides for additional funding certainty.
Solvency and capital
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. Given the
simplicity of our business model, our preferred approach
to considering solvency remains to hold assets to match
client unit-linked liabilities and allow for a management
solvency buffer (MSB).
At 31 December 2023 we held surplus assets over the MSB
of £603.5 million (2022: £847.2 million), reducing as a result
of the Ongoing Service Evidence provision that we have
established.
We also ensure that our approach meets the requirements
of the Solvency II regime. Our UK life company, the largest
Solvency II entity in the Group, has increased its target
capital from 110% to 130% of the standard formula, reflecting
the change in its financial model as a result of the charging
structure changes we have announced. This has been
discussed with its regulator, the PRA.
At 31 December 2023, the solvency ratio for our life
companies after payment of a year-end intra-Group
dividend was 162% (2022: 130%), reflecting the impact of
the change in charging structures, and the Solvency II
reform changes to the risk margin.
Dividends
While our financial results have been significantly impacted
by the Ongoing Service Evidence provision, the Board
recognises the importance of returns to shareholders and
is confident that sufficient capital and liquidity is available to
deal with this legacy matter. In light of this, the Board therefore
proposes a final dividend of 8.00 pence per share (2022: 37.19
pence per share) to make a total dividend of 23.83 pence
per share for the full year (2022: 52.78 pence per share).
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A combination of the provision we have established
and an expected decrease in the level of profit growth
in the next few years as we transition to our new charging
structure, reduces our ability to invest for long term growth
in our business over the next few years. Accordingly, the
Board has decided to revise our approach to shareholder
distributions. Going forward, the Board expects that total
annual distributions will be set at 50% of the full year
Underlying cash result. For the next three years this will
comprise 18.00 pence per share in annual dividends
declared with the balance distributed through share
repurchases.
Once our new charging structure is fully embedded,
we anticipate that the business will be on an improving
earnings trajectory during 2027 and beyond. The Board
expects that distributing 50% of the Underlying cash result
will continue to strike the right balance between investment
for growth and returns to shareholders, while seeing
shareholder distributions increase over time. The upward
trajectory in profits should then provide the Board with
options to grow the dividend element within the total return.
Craig Gentle, Chief Financial Officer
27 February 2024
Summary financial information
Page
reference
Year ended
31 December
2023
Year ended
31 December
2022
1
FUM-based metrics
Gross inflows (£’Billion) 55 15.4 17.0
Net inflows (£’Billion) 55 5.1 9.8
Total FUM (£’Billion) 55 168.2 148.4
Total FUM in gestation (£’Billion) 56 47.6 45.5
IFRS-based metrics
IFRS (loss)/profit after tax (£’Million) 58 (9.9) 407.2
IFRS (loss)/profit before shareholder tax (£’Million) 58 (4.5) 503.9
Underlying (loss)/profit before shareholder tax (£’Million) 58 (8.0) 516.9
IFRS basic earnings per share (EPS) (Pence) (1.8) 75.0
IFRS diluted EPS (Pence) (1.8) 74.3
IFRS net asset value per share (Pence) 179.3 233.7
Dividend per share (Pence) 23.83 52.78
Cash result-based metrics
Controllable expenses (£’Million) 61 283.3 277.9
Underlying cash result (£’Million) 60 392.4 410.1
Cash result (£’Million) 59 68.7 410.1
Underlying cash result basic EPS (Pence) 71.7 75.6
Underlying cash result diluted EPS (Pence) 70.5 74.9
EEV-based metrics
EEV operating (loss)/profit before tax (£’Million) 68 (1,891.6) 1,589.7
EEV operating (loss)/profit after tax basic EPS (Pence) (260.6) 218.8
EEV operating (loss)/profit after tax diluted EPS (Pence) (256.5) 216.8
EEV net asset value per share (£) 14.11 16.66
Solvency-based metrics
Solvency II net assets (£’Million) 72 1,133.0 1,379.9
Management solvency buffer (£’Million) 72 529.5 532.7
Solvency II free assets (£’Million) 72 1,572.1 1,921.4
Solvency ratio (Percentage) 73 191% 155%
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
A complete glossary of APMs is set out on pages 276 to 278.
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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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 55 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 55 and 56
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 57 to 67
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 68 and 71
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 193.
Our financial business model
The primary source of the Group’s
profit is the income we receive
from annual product management
charges on FUM. However, under our
current charging structure, 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.
This means that the Group has six
years’ worth of FUM in the ‘gestation’
period that is not generating annual
product management charges, but
will ‘mature’ over a six-year period
and begin to contribute annual
product management charges.
We will be simplifying our charging
structure from the middle of 2025 and
new business will no longer enter a
gestation period, but in the meantime,
gestation FUM represents a significant
store of shareholder value.
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 59 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 into FUM
Gross inflows for most
investment and
pension business
Does not yet generate
annual product
management charges
Gross inflows for unit
trust, ISA and DFM
business
Generates
annual product
management charges
Mature
FUM
Business
moves from
gestation FUM
to mature FUM
after 6 years
Gestation
FUM
6
years
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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 2023 and 2022. Investment return is presented net of all charges.
2023 2022
Investment Pension UT/ISA and DFM Total Total
£’Billion £’Billion £’Billion £’Billion £’Billion
Opening FUM 33.29 73.86 41.22 148.37 153.99
Gross inflows 2.09 9.77 3.53 15.39 17.03
Net investment return 2.89 8.23 3.59 14.71 (15.40)
Regular income withdrawals and maturities (0.36) (2.41) – (2.77) (2.01)
Surrenders and part-surrenders (1.92) (2.13) (3.45) (7.50) (5.24)
Closing FUM 35.99 87.32 44.89 168.20 148.37
Net inflows (0.19) 5.23 0.08 5.12 9.78
Implied surrender rate as a percentage of average FUM 5.5% 2.6% 8.0% 4.7% 3.5%
Included in the table above is:
Rowan Dartington Group FUM of £3.43 billion at 31 December 2023 (31 December 2022: £3.29 billion), gross inflows
of £0.36 billion for the year (2022: £0.44 billion) and outflows of £0.18 billion (2022: £0.14 billion); and
SJP Asia FUM of £1.72 billion at 31 December 2023 (31 December 2022: £1.52 billion), gross inflows of £0.21 billion for
the year (2022: £0.28 billion) and outflows of £0.15 billion (2022: £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
FUM as at
31 December
£’Billion £’Billion £’Billion £’Billion
2023 148.4 5.1 14.7 168.2
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
The table below provides a geographical and investment-type analysis of FUM at 31 December.
31 December 2023 31 December 2022
£’Billion
Percentage
of total £’Billion
Percentage
of total
North American equities 57.4 34% 49.1 33%
Fixed income securities 27.1 16% 23.1 16%
European equities 23.6 14% 19.3 13%
Asia and Pacific equities 20.5 12% 17.8 12%
UK equities 16.0 10% 16.0 11%
Alternative investments 10.5 6% 12.4 8%
Cash 7.2 4% 5.7 4%
Other 4.1 3% 2.8 2%
Property 1.8 1% 2.2 1%
Total 168.2 100% 148.4 100%
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1.2 Gestation
As explained in our financial business model on page 54, due to our current product structure, 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 2023, after initial charges, moved into gestation FUM (2022: 54%).
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 2023 120.6 47.6 168.2
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
During the year, we announced the outcome of an internal review which will see us simplify our charging structure from
the second half of 2025, following a period of investment in the required systems and processes. Under the revised
charging structure, new business will no longer enter a period of gestation and the existing gestation business at the point
of implementation will gradually mature, after which there will be no further concept of gestation FUM. In the meantime,
gestation FUM continues to be a material store of shareholder value that will make a significant contribution to the
Cash result in the future.
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 £47.6 billion at 31 December 2023
may start to contribute to the Cash result over the next six years and beyond, allowing for the changes to our charging
structure in 2025 and the applicable rate of corporation tax in each year. 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
maturity profile
Gestation FUM
future contribution
to the Cash result
£’Billion £’Million
2024 7.0 58.0
2025 14.3 100.0
2026 21.9 124.9
2027 30.4 173.5
2028 39.4 224.8
2029 onwards 47.6 271.7
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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 £167.8 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 2023.
To address this, we developed alternative performance measures (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 APMs is set out on pages 276 to 278, 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)
On 1 January 2023, the Group adopted IFRS 17 Insurance Contracts, with comparatives restated from 1 January 2022.
The adoption of IFRS 17 resulted in an increased IFRS profit after tax of £1.8 million for the year ended 31 December 2022.
For further explanation, refer to Note 1a on page 185.
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 2023 we deducted £444.1 million from clients due to
investment market gains which flowed through our IFRS profit before tax as income, whereas 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.
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 2023 it was £439.6 million, compared to £2.8 million for the year ended
31 December 2022.
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.
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2.1 International Financial Reporting Standards (IFRS) continued
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.
Year ended
31 December
2023
Year ended
31 December
2022
1
£’Million £’Million
IFRS profit before tax 439.6 2.8
Policyholder tax (444.1) 501.1
IFRS (loss)/profit before shareholder tax (4.5) 503.9
Shareholder tax (5.4) (96.7)
IFRS (loss)/profit after tax (9.9) 407.2
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
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 decreases 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 gains
combined with higher interest rates in the year to 31 December 2023 have resulted in a negative policyholder tax asymmetry
impact of £44.4 million, whereas market falls in the year to 31 December 2022 resulted in a positive movement of £50.6 million.
This leads to a £95.0 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 further.
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 10 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 upfront 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
2023
Year ended
31 December
2022
1
£’Million £’Million
IFRS (loss)/profit before shareholder tax (4.5) 503.9
Remove the impact of movements in DAC/DIR/PVIF (3.5) 13.0
Underlying (loss)/profit before shareholder tax (8.0) 516.9
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
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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 11, which are presented before both policyholder and shareholder tax.
Year ended
31 December
2023
Year ended
31 December
2022
1
£’Million £’Million
Amortisation of DAC (72.2) (79.6)
DAC on new business for the year 39.9 37.3
Net impact of DAC (32.3) (42.3)
Amortisation of DIR 149.3 166.2
DIR on new business for the year (110.3) (133.7)
Net impact of DIR 39.0 32.5
Amortisation of PVIF (3.2) (3.2)
Movement in year 3.5 (13.0)
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
Net impact of DAC
The scale of the £32.3 million negative overall impact of DAC on the IFRS result (2022: negative £42.3 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 few 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 2023 is lower than it was in 2022. Income released
from the deferred income liability has reduced as balances arising from the reassessment of investment contract
liabilities in 2016 were fully amortised by the end of 2022. Together, these effects mean that DIR has had a positive
£39.0 million impact on the IFRS result in 2023 (2022: £32.5 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 APMs. 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 2023 Year ended 31 December 2022
1
Before
shareholder
tax After tax
Before
shareholder
tax After tax
£’Million £’Million £’Million £’Million
Underlying (loss)/profit (8.0) (13.0) 516.9 416.5
Equity-settled share-based payments 5.4 5.4 20.5 20.5
Impact of deferred tax – 24.9 – 30.5
Impact of policyholder tax asymmetry 44.4 44.4 (50.6) (50.6)
Other 15.2 7.0 (1.3) (6.8)
Cash result 57.0 68.7 485.5 410.1
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
Equity-settled share-based payments have reduced compared to 2022, reflecting a lower average share price,
partially offset by an increase in the number of shares and share options granted during the year.
The impact of deferred tax is the recognition in the Cash result of the benefit from realising tax relief on various items
including capital losses, share options, capital allowances and deferred expenses. These have already been recognised
under IFRS, and hence Underlying profit, through the establishment of deferred tax assets. Two notable points in the year,
are the need for life companies to spread acquisition expenses equally across 7 years is removed with immediate
allowance for tax relief instead, and that recognition has been allowed for the deferred tax relief arising from the
establishment of the exceptional Ongoing Service Evidence provision. More information can be found in Note 10.
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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. For further
explanation, refer to page 58.
Other represents a number of other small items, including the removal of other intangibles and 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 2023
Year ended
31 December
2022
In-force New business Total Total
£’Million £’Million £’Million £’Million
Net annual management fee 1 942.6 58.2 1,000.8 1,020.6
Reduction in fees in gestation period 1 (401.6) – (401.6) (412.9)
Net income from FUM 1 541.0 58.2 599.2 607.7
Margin arising from new business 2 – 104.5 104.5 122.4
Controllable expenses 3 (20.6) (262.7) (283.3) (277.9)
Asia – net investment 4 – (19.4) (19.4) (11.3)
DFM – net investment 4 – (6.4) (6.4) (10.9)
Regulatory fees and FSCS levy 5 (2.3) (20.8) (23.1) (40.0)
Shareholder interest 6 61.8 – 61.8 15.9
Tax relief from capital losses 7 2.1 – 2.1 20.7
Charge structure implementation costs 8 – (7.2) (7.2) –
Miscellaneous 9 (35.8) – (35.8) (16.5)
Underlying cash result 546.2 (153.8) 392.4 410.1
Ongoing Service Evidence provision 10 (323.7) – (323.7) –
Cash result 222.5 (153.8) 68.7 410.1
The Cash result comprises the emergence of cash from in-force business of £222.5 million (2022: £544.3 million) and
an investment in new business of £153.8 million (2022: £134.2 million)
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, advice fees paid to Partners, investment management fees paid to external fund
managers and the policy servicing tariff paid to our third-party administration provider. Each product has standard fees,
but they vary between products. Overall post-tax margin on FUM reflects business mix but also the different tax treatments,
particularly life insurance tax on onshore investment business.
As noted on page 54, 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 2023, our net income from FUM is consistent with the weighted average of our margin range throughout the year.
The margin range for the first half of the year was year 0.59% to 0.61%, reducing by 0.04% from August 2023 to a range
from 0.55% to 0.57%, reflecting the introduction of a charge cap applicable to client bonds and pension investments
with a duration longer than ten years.
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There will be another, more modest impact in 2024 when the tax rate will be 25% for the full year, with the effect of this being
to further reduce our margin range by 0.01%, resulting in a range from 0.54% to 0.56%. Following the simplification of our
charging structure from the middle of 2025, the range will reduce by a further 0.11%, resulting in a range from 0.43% to 0.45%,
though this will be applicable to all FUM once the existing gestation FUM has matured.
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.
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
2023
Year ended
31 December
2022
£’Million £’Million
Establishment expenses 206.2 198.9
Development expenses 65.3 67.4
Academy 11.8 11.6
Controllable expenses 283.3 277.9
Controllable expenses are those expenses which do not vary with business volumes, including establishment expenses,
development expenses and the costs associated with running our Academy. Growth in controlled expenses has been
contained to 8% on a pre-tax basis, with the increase driven by the high inflation environment. This is equivalent to a
2% increase on a post-tax basis as presented in the Cash result, reflecting an increase in the rate of corporation tax.
We anticipate returning to our target of 5% annual growth in pre-tax controllable expenses in 2024, balancing disciplined
expense management with the need to invest in the business for the future.
Establishment expenses in 2023 increased by 4% on a net-of-tax basis to £206.2 million (2022: £198.9 million), as inflation
driven increases were partially offset by an increased level of tax relief. These costs predominantly relate to people,
property and technology and hence are relatively fixed in nature.
Development expenses were £65.3 million (2022: £67.4 million). Our investment in technology, alongside our commitment
to making it easier to do business, is the driver behind our development expenditure. We continue to improve our
technology infrastructure and data quality, and to invest in Salesforce.
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.
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 63 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. The increased investment in Asia includes the cost of restructuring during the year, as well as the cost
of setting up a new office in Dubai. While both Asia and Rowan Dartington have been impacted by the challenging market
conditions in 2023, they remain well positioned for the years ahead.
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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
2023
Year ended
31 December
2022
£’Million £’Million
FSCS levy 10.0 27.3
Regulatory fees 13.1 12.7
Regulatory fees and FSCS levy 23.1 40.0
Our position as a market-leading provider of advice means we make a substantial contribution to supporting the FSCS,
thereby providing protection for clients of other businesses in the sector that fail. The FSCS levy has fallen substantially
in 2023, reflecting the short-term utilisation of scheme surpluses that had built up in prior years. The levy is anticipated
to increase again in 2024.
6. Shareholder interest
This is the income accruing on 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 was previously 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 £2.1 million tax value (2022: £20.7 million) reflects the utilisation in full of the remaining
stock of capital losses. Due to the exhaustion of the balance, this will not feature in the Cash result in the future.
8. Charge structure implementation costs
We announced in October 2023 that we would be simplifying our charging structure and disaggregating our charges into
their component parts, supporting clients by making it easier to compare charges for advice, investment management
and other services, on a component-by-component basis.
We have commenced a broad and complex programme to accommodate these changes, investing £140-160 million
over a two-year period to develop our systems and processes to support the new charging structure to be implemented
in the second half of 2025.
9. Miscellaneous
This category represents the net cash flow of the business not covered in any of the other categories. Miscellaneous
has increased in 2023, reflecting an increase in remediation costs as a result of elevated complaints experience.
10. Ongoing Service Evidence provision
The Ongoing Service Evidence provision has been established following the appointment of a skilled person and an
assessment undertaken into the evidencing and delivery of historic ongoing servicing. The anticipated cost of refunding
ongoing servicing charges, together with the interest, and the administrative costs associated with completing the work,
is reflected in our Financial Statements through an Ongoing Service Evidence provision of £426.0 million, which is
£323.7 million net of tax (and a deferred tax balance) within the Cash result.
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, 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 2023 Year ended 31 December 2022
Before tax Tax rate After tax Before tax Tax rate After tax
£’Million Percentage £’Million £’Million Percentage £’Million
Controllable expenses
Establishment expenses 269.6 23.5% 206.2 245.5 19.0% 198.9
Development expenses 85.4 23.5% 65.3 83.2 19.0% 67.4
Academy 15.4 23.5% 11.8 14.3 19.0% 11.6
Total controllable expenses 370.4 283.3 343.0 277.9
Other costs presented separately
on the face of the Cash result
Regulatory fees and FSCS levy 30.2 23.5% 23.1 49.4 19.0% 40.0
Charge structure implementation costs 9.4 23.5% 7.2 – – –
Total expenses presented separately
on the face of the Cash result 410.0 313.6 392.4 317.9
The total expenses presented separately on the face of the Cash result before tax then reconcile to IFRS expenses as set
out below.
Year ended
31 December
2023
Year ended
31 December
2022
1,2
£’Million £’Million
Total expenses presented separately on the face of the Cash result before tax 410.0 392.4
Expenses which vary with business volumes
Other performance costs 147.4 160.4
Payments to Partners 1,013.2 1,011.8
Investment expenses 96.9 85.7
Third-party administration 151.8 135.0
Other 513.3 44.5
Expenses relating to investment in specific areas of the business
Asia expenses 26.5 20.9
DFM expenses 33.3 35.7
Total expenses included in the Cash result 2,392.4 1,886.4
Reconciling items to IFRS expenses
Amortisation of DAC and PVIF, net of additions 35.5 45.5
Equity-settled share-based payment expenses 5.4 20.5
Insurance contract expenses presented elsewhere 2.4 (4.5)
Other (2.4) 1.3
Total IFRS Group expenses before tax 2,433.3 1,949.2
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
2 Restated to reclassify other finance income. See Note 1a.
Expenses which vary with business volumes
Other performance costs 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 includes the provision that we have established following a review into the evidencing of historic ongoing
servicing, as well as the operating costs of acquired financial adviser businesses, donations to the St. James’s Place
Charitable Foundation and complaint costs. They are recognised across various lines in the Cash result.
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. The increased investment in Asia includes the cost of restructuring during the year.
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
Reconciling items to IFRS expenses
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.
Expenses associated with insurance contract expenses are included in the Cash result but are shown within the Insurance
service expense rather than the expenses line under IFRS 17.
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 2023.
31 December 2023 Note
IFRS Balance
Sheet Adjustment 1 Adjustment 2
Solvency II Net
Assets Balance
Sheet
Solvency II Net
Assets Balance
Sheet: 2022
1
£’Million £’Million £’Million £’Million £’Million
Assets
Goodwill 33.6 – (33.6) – –
Deferred acquisition costs 304.4 – (304.4) – –
Purchased value of in-force business 8.0 – (8.0) – –
Computer software 28.0 – (28.0) – –
Property and equipment 1 153.1 – – 153.1 145.7
Deferred tax assets
1
2 36.5 – (16.1) 20.4 2.5
Investment in associates 10.2 – – 10.2 1.4
Reinsurance assets
1
13.0 – (6.3) 6.7 5.6
Other receivables
1
3 2,997.4 (846.9) (3.2) 2,147.3 1,369.2
Income tax assets 7 – – – – 35.0
Investment property 1,110.3 (1,110.3) – – –
Equities 116,761.5 (116,761.5) – – –
Fixed income securities 4 27,244.7 (27,236.5) – 8.2 7.9
Investment in Collective Investment Schemes 4 13,967.5 (12,513.1) – 1,454.4 1,271.7
Derivative financial instruments 3,420.6 (3,420.6) – – –
Cash and cash equivalents 4 6,204.3 (5,918.9) – 285.4 253.3
Total assets 172,293.1 (167,807.8) (399.6) 4,085.7 3,092.3
Liabilities
Borrowings 5 251.4 – – 251.4 163.8
Deferred tax liabilities 2 411.7 – 2.8 414.5 165.1
Insurance contract liabilities
1
496.0 (435.2) (42.6) 18.2 17.9
Deferred income 491.5 – (491.5) – –
Other provisions 6 500.1 – – 500.1 46.0
Other payables
1
1, 3 2,388.1 (613.3) (17.8) 1,757.0 1,319.6
Investment contract benefits 123,149.8 (123,149.8) – – –
Derivative financial instruments 3,073.0 (3,073.0) – – –
Net asset value attributable to unit holders 40,536.5 (40,536.5) – – –
Income tax liabilities 7 11.5 – – 11.5 –
Total liabilities 171,309.6 (167,807.8) (549.1) 2,952.7 1,712.4
Net assets 983.5 – 149.5 1,133.0 1,379.9
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
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 14 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
The property and equipment balance includes the right to use leased assets of £118.5 million (2022: £114.4 million), together
with fixtures, fittings and office equipment of £32.1 million (2022: £28.6 million) and computer equipment of £2.5 million
(2022: £2.7 million).
The right to use leased assets has increased year on year as a result of taking on a lease for the new London Paddington
office, partially offset as the leased assets are depreciated. Lease liabilities of £120.5 million are recognised within the other
payables line (2022: £116.6 million).
Note 12 Property and equipment, including leased assets, Note 13 Leases and Note 16 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 10 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 15 Other receivables and Note 16 Other
payables within the IFRS Financial Statements.
Other receivables on the Solvency II Net Assets Balance Sheet have increased from £1,369.2 million at 31 December 2022 to
£2,147.3 million at 31 December 2023, principally reflecting an increase in short-term outstanding market trade settlements
in the unit-linked funds and consolidated unit trusts.
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 £283.5 million at 31 December 2023 (31 December 2022: £278.3 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 2023 is 10 years.
A project to migrate our offshore business onto Bluedoor is in progress, with £29.9 million added to the total operational
readiness prepayment asset during 2023 that will begin to amortise from 2024.
The movement schedule below demonstrates how the operational readiness prepayment has developed over the past
two years.
2023 2022
£’Million £’Million
Cost
At 1 January 420.2 413.5
Additions during the year 29.9 6.7
At 31 December 450.1 420.2
Accumulated amortisation
At 1 January (141.9) (117.2)
Amortisation during the year (24.7) (24.7)
At 31 December (166.6) (141.9)
Net book value 283.5 278.3
The amortisation expense is recognised within third-party administration expenses in the IFRS result, and within the net
annual management fee line of the Cash result. It is more than offset by the lower tariff charges on Bluedoor compared
to the previous system, which grew as the business grew, benefiting both the IFRS and Cash results.
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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 5 bps 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
2023
31 December
2022
Aggregate LTV across the total Partner lending book 29% 32%
Proportion of the book where LTV is over 75% 5% 10%
Net exposure to loans where LTV is over 100% (£’Million) 6.7 7.1
If FUM were to decrease by 10%, the net exposure to loans where LTV is over 100% at 31 December 2023 would increase to
£7.7 million (31 December 2022: increase to £8.3 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. Following the sale, in the second half of 2022,
of a portfolio of securitised business loans to Partners, the balance was negligible at 31 December 2022. Since then,
we have continued to make use of the securitisation vehicle to support the advance of further loans to Partners.
31 December
2023
31 December
2022
£’Million £’Million
Total business loans to Partners 408.0 315.6
Split by funding type:
Business loans to Partners directly funded by the Group 340.8 315.6
Securitised business loans to Partners 67.2 –
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
2023
31 December
2022
£’Million £’Million
Fixed interest securities 8.2 7.9
Investment in Collective Investment Schemes (AAA-rated money market funds) 1,454.4 1,271.7
Cash and cash equivalents 285.4 253.3
Total liquid assets 1,748.0 1,532.9
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 FUM that is contributing to the Cash result 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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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 above.
For accounting purposes we are obliged to disclose on our Consolidated Statement of Financial Position the value of loan
notes relating to the securitisation. 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, is very different from the Group’s senior
unsecured corporate borrowings, which are used to manage working capital and fund investment in the business.
Further information is provided in Note 19 Borrowings and financial commitments within the IFRS Financial Statements.
31 December
2023
31 December
2022
£’Million £’Million
Corporate borrowings: bank loans 50.0 –
Corporate borrowings: loan notes 151.1 163.8
Senior unsecured corporate borrowings 201.1 163.8
Senior tranche of non-recourse securitisation loan notes 50.3 –
Total borrowings 251.4 163.8
During the year our revolving credit facility, one of our primary senior unsecured corporate borrowings facilities, was
renewed. The credit available under this facility is £345 million, which is repayable at maturity in 2028.
6. Other provisions
Further information on other provisions, including how the balance has moved year on year, is set out in Note 18 Other
provisions and contingent liabilities within the IFRS Financial Statements.
Provisions have increased from £46.0 million at 31 December 2022 to £500.1 million at 31 December 2023, driven by
a £426.0 million Ongoing Service Evidence provision that we have established following a review into the evidencing and
delivery of historic ongoing servicing.
7. Income tax liabilities
The Group has an income tax liability of £11.5 million at 31 December 2023 compared to an asset of £35.0 million at
31 December 2022. This is due to a current tax charge of £225.3 million, tax paid in the year of £179.4 million and other
impacts of £0.6 million including those related to the acquisition of Group entities. Further detail is provided in Note 10
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
2023
Year ended
31 December
2022
£’Million £’Million
Opening Solvency II net assets 1,379.9 1,245.3
Dividend paid (289.9) (303.9)
Issue of share capital and exercise of options 6.8 14.5
Consideration paid for own shares (0.5) (0.3)
Change in deferred tax (24.9) (30.5)
Impact of policyholder tax asymmetry (44.4) 50.6
Reassurance recapture add-back 39.8 –
Change in goodwill, intangibles and other non-cash movements (2.5) (10.9)
Non-controlling interests arising on the part-disposal of subsidiaries – 5.0
Cash result 68.7 410.1
Closing Solvency II net assets 1,133.0 1,379.9
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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 (loss)/profit before tax
of the combined business.
Note
Year ended
31 December
2023
Year ended
31 December
2022
£’Million £’Million
Funds management business 1 1,234.3 1,725.8
Distribution business 2 (68.3) (58.8)
Other 3 (125.0) (77.3)
EEV operating profit before exceptional items 1,041.0 1,589.7
Exceptional item: Charge structure 4 (2,506.6) –
Exceptional item: Ongoing Service Evidence provision 4 (426.0) –
EEV operating (loss)/profit after exceptional items (1,891.6) 1,589.7
Investment return variance 5 501.7 (1,314.0)
Economic assumption changes 6 2.5 235.1
EEV (loss)/profit before tax (1,387.4) 510.8
Tax 340.3 (139.4)
EEV (loss)/profit after tax (1,047.1) 371.4
A reconciliation between EEV operating (loss)/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 reduced to £1,234.3 million (2022: £1,725.8 million) and a full analysis
of the result is shown below.
Year ended
31 December
2023
Year ended
31 December
2022
£’Million £’Million
New business contribution 695.4 977.2
Profit from existing business
– unwind of the discount rate 506.0 440.7
– experience variance (11.3) 89.0
– operating assumption change 13.9 210.1
Investment income 30.3 8.8
Funds management EEV operating profit 1,234.3 1,725.8
The new business contribution for the year at £695.4 million (2022: £977.2 million) was 29% lower than the prior year,
reflecting the reduction in new business volumes, together with the impact of changes to our charging structure
described opposite.
The unwind of the discount rate for the year was higher at £506.0 million (2022: £440.7 million), reflecting the increase
in the opening risk discount rate to 7.0% (2022: 4.2%), offset by a lower value of in-force business after allowing for the
changes to our charging structure described opposite.
The experience variance during the year was £(11.3) million (2022: £89.0 million). The change relative to 2022 principally
reflects the lower persistency experience in the year.
The impact of operating assumption changes in the year was £13.9 million (2022: positive £210.1 million), reflecting
a small change to the persistency assumptions for our offshore bond business. The impact in the prior year reflects
a small improvement to the persistency assumptions for unit trust and ISA business.
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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 distribution capabilities in Asia. The reported loss has benefited from
a reduction in the FSCS levy expense for our distribution business to £10.6 million (2022: £23.8 million), offsetting a reduction
in the gross margin reflecting lower new business volumes.
3. Other
Other represents a number of miscellaneous items including development expenditure, the costs of running our
Academy and implementing our new charging structure, as well as the cost of redress associated with client complaints.
The increase reflects elevated complaints experience seen during the year.
4. Exceptional items
The exceptional charge reflects the impact on the opening position of changes to our charge structure announced during
the year as well as the impact of a provision that we have established following a review into the evidencing of historic
ongoing servicing. The changes announced to our charge structure include:
the change, announced in July 2023, to improve value for long-term clients by capping annual product management
charges at 0.85% for bond and pension investments with a duration longer than ten years;
the change, announced in October 2023, to simplify our charging structure from the middle of 2025.
5. 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 11.2% after charges, compared to the assumed investment
return of 4.8%. This resulted in an investment return variance of £501.7 million (2022: negative £1,314.0 million).
6. Economic assumption changes
The positive variance of £2.5 million arising in the year (2022: positive £235.1 million) reflects broadly neutral economic
assumption changes overall, compared to the significant increase in real yields seen 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
2023
Year ended
31 December
2022
Investment
New business contribution (£’Million) 96.6 148.2
Gross inflows (£’Billion) 2.09 2.31
Margin (%) 4.6 6.4
Pension
New business contribution (£’Million) 469.2 495.3
Gross inflows (£’Billion) 9.77 9.90
Margin (%) 4.8 5.0
Unit trust and DFM
New business contribution (£’Million) 129.6 333.7
Gross inflows (£’Billion) 3.53 4.82
Margin (%) 3.7 6.9
Total business
New business contribution (£’Million) 695.4 977.2
Gross inflows (£’Billion) 15.39 17.03
Margin (%) 4.5 5.7
Post-tax margin (%) 3.4 4.3
The overall margin for the year was 4.5% (2022: 5.7%), reflecting the impact of the impact of exceptional changes to our
charge structure.
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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
2023
Year ended
31 December
2022
Risk-free rate 3.7% 3.9%
Inflation rate 3.5% 3.6%
Risk discount rate 6.8% 7.0%
Future investment returns:
– Gilts 3.7% 3.9%
– Equities 6.7% 6.9%
– Unit-linked funds 6.0% 6.2%
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 2023 695.4 524.7 7,739.1
100bp reduction in risk-free rates, with corresponding change in fixed
interest asset values 1 (10.8) (8.2) (63.6)
10% increase in withdrawal rates 2 (44.9) (33.8) (364.1)
10% reduction in market value of equity assets 3 – – (745.3)
10% increase in expenses 4 (10.0) (7.6) (72.1)
100bps increase in assumed inflation 5 (12.2) (9.2) (68.4)
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 94.0 70.6 619.6
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
2023
31 December
2022
£’Million £’Million
Value of in-force business 6,606.1 7,684.8
Solvency II net assets 1,133.0 1,379.9
Total embedded value 7,739.1 9,064.7
31 December
2023
31 December
2022
£ £
Net asset value per share 14.11 16.66
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 £250 million to our embedded value at 31 December 2023 (31 December 2022: £340 million).
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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 2023 we reviewed the level of our MSB for the Life businesses, and chose to maintain
it at £355.0 million (31 December 2022: £355.0 million). The Group’s overall Solvency II net assets position, MSB, and
management solvency ratios are as follows.
31 December 2023
Life
1
Other
regulated Other
1,2
Total
31 December
2022 total
£’Million £’Million £’Million £’Million £’Million
Solvency II net assets before exceptional item 446.9 354.7 655.1 1,456.7 1,379.9
MSB 355.0 174.5 – 529.5 532.7
Management solvency ratio before exceptional item 126% 203%
Exceptional item: Ongoing Service Evidence provision – (323.7) – (323.7) –
Capitalisation after the end of the reporting period – 323.7 (323.7) – –
Solvency II net assets 446.9 354.7 331.4 1,133.0 1,379.9
1 After payment of year-end intra-Group dividend.
2 Before payment of the Group final dividend.
Our regulated wealth management business has been impacted by an exceptional item, being the recognition of an
Ongoing Service Evidence provision. On 27 February 2024, the Group completed a capital injection into the regulated
wealth management business, of which £323.7 million was used to meet the cost of the Ongoing Service Evidence
provision. The liquidity necessary to support this capital injection was provided by a £260.0 million intra-Group dividend,
together with a £190.0 million intra-Group loan, both from St James’s Place UK plc, our main life company.
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.
During the year, we announced the outcome of an internal review which will see us simplify our charging structure from
the second half of 2025, addressing the evolution over time of an external environment that is increasingly seeking simple
comparability of all advice, investment management and other services on a component-by-component basis. As a
result of this disaggregation of charges, the proportion of Group profit that will arise within our life companies will reduce,
in favour of increased profit emergence in our other regulated companies. Reflecting the different regulatory treatment
of these businesses, the effect of this change is to reduce the value of in-force, risk margin and the solvency capital
requirements associated with our life companies at 31 December 2023, with a corresponding increase in the solvency ratio.
The solvency ratio has been further improved by the confirmation in December 2023 of a number of regulatory changes
to the calculation of the risk margin as part of a wider package of Solvency II reform, with the effect being a material
reduction in the risk margin.
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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 2023
Life
1
Other
regulated Other
1,2
Total
31 December
2022 total
£’Million £’Million £’Million £’Million £’Million
Solvency II net assets before exceptional item 446.9 354.7 655.1 1,456.7 1,379.9
Value of in-force (VIF) 2,485.2 – – 2,485.2 5,580.4
Risk margin (318.4) – – (318.4) (1,516.4)
Own funds (A) before exceptional item 2,613.7 354.7 655.1 3,623.5 5,443.9
Solvency capital requirement (B) (1,611.5) (116.2) – (1,727.7) (3,522.5)
Solvency II free assets before exceptional item 1,002.2 238.5 655.1 1,895.8 1,921.4
Exceptional item: Ongoing Service Evidence provision – (323.7) – (323.7) –
Capitalisation after the end of the reporting period – 323.7 (323.7) – –
Solvency II free assets 1,002.2 238.5 331.4 1,572.1 1,921.4
Solvency ratio 162% 305% 191% 155%
1 After payment of year-end intra-Group dividend.
2 Before payment of the Group final dividend.
As a result of these key changes, the solvency ratio after payment of the proposed Group final dividend is 188% at
31 December 2023, increased from 149% at 31 December 2022.
We target a solvency ratio of 130% for St. James’s Place UK plc, our largest insurance subsidiary. The combined solvency
ratio for our life companies, after payment of the year-end intra-Group dividend, is 162% at 31 December 2023
(31 December 2022: 130%).
Solvency II sensitivities
The table below shows the estimated impact on the Solvency II free assets, the SCR and the solvency ratio of 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 our approach of 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 2023 1,572.1 1,727.7 191%
100bps reduction in risk-free rates, with corresponding change in fixed
interest asset values 1 1,490.5 1,723.6 186%
10% increase in withdrawal rates 2 1,339.5 1,626.6 182%
10% reduction in market value of equity assets 3 1,543.2 1,417.1 209%
10% increase in expenses 4 1,526.3 1,720.6 189%
100bps increase in assumed inflation 5 1,507.8 1,723.9 187%
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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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 strong risk and control culture, is critical to our
success. We rigorously 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
and harms these risks could have 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 macroeconomic factors, regulation, cyber crime,
climate change, and political risks such as changes in
taxation) 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 accordance with our strategic objectives and
to meet our obligations towards our clients, shareholders,
regulators and other key stakeholders.
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 linked to culture and therefore is a
core aspect of our governance and decision-making.
Risk management forms a key part of our strategic and
business processes, including decisions on strategic
developments affecting our client and Partner propositions,
investments, change delivery, recruitment and retention,
and dividend payments.
Our risk appetite
The Board sets its appetite for taking risk in the context
of 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 Executive
Committee, senior risk owners and the Group Risk
Committee before being approved by the Board.
The Group risk appetite statement also provides a
mechanism to record the key individuals within the
Group who have responsibility for managing particular
risks. It also 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 incorporated into regular risk reporting, alongside
qualitative information, to enable the Group Risk
Committee, on behalf of the Board, to monitor the
Group’s risk profile.
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Effective risk
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Risk and risk management
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Our risk management and control framework
The internal control environment is built upon a strong
risk and control culture and organisational assignment
of responsibility. The ’first line’ business is responsible
and accountable for risk management. This is then
overlaid with oversight and challenge from the ’second
line’ risk and compliance functions, with independent
assurance from the ‘third line’ internal audit function
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 the successful delivery of its strategic
objectives and its ability to meet obligations towards
clients, regulators and other key stakeholders. 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. To this end
the Board robustly assesses its principal and emerging
risks, which are considered in regular reporting and
summarised annually in the Group’s 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 by monitoring the effectiveness of the
internal control model throughout the year, which is
supplemented by an annual review of risk and control
self-assessments accompanied by executive-level
attestations. The risk management and internal control
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 below depicts our risk management
and control framework.
Risk escalation
Risk governanceRisk capital Risk management and control framework
1. Loss event reporting
2. Emerging risk assessment
3. Stress and scenario testing
4. Risks and controls self-assessment
5. Operational risk assessments
6. Reverse stress testing
Regulatory
assessment
Own
assessment
Board
Group Risk and
Audit Committees
Subsidiary Boards
Group Executive
Committee
Other ExCos
Risk culture
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
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
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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
For example, consideration is given to factors or events
that impact on the income from funds under management
such as market movements, retention of clients or ability to
attract new clients. We also consider factors which impact
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. This
scenario testing process was used to inform strategic
decisions relating to 2023.
The scenarios are used to assess both the immediate
impact of an event and the impact over the longer term
(in the wake of an 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:
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.
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
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.
The ORSA uses a five-year projection period for the medium
term. Due to the gestation period on some of our current
pension and investment product ranges we do not earn
annual management fees on these in the first six years.
The revised charging structure, which will be launched in
mid-2025, will have no gestational period and will instead
earn annual management fees from year 1.
The ORSA is particularly useful in assessing viability, as it
involves a comprehensive assessment of risks and capital
requirements for the business.
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Current risk environment
There was a complex and rapidly evolving macroeconomic
risk picture through 2022 and 2023, which was exacerbated
in the UK by political turmoil. We expect to see challenges
at a national level in 2024 and beyond as people and
businesses continue to adjust to a higher interest rate
environment and the higher cost of living. This is despite
the fact that towards the end of 2023, inflation appeared
to be on a trajectory to return towards the Bank of England’s
target and interest rates are expected to reduce over 2024.
We are also mindful of potential longer term 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 (particularly with tax thresholds frozen)
and investments. However, with 2024 being an election year,
we do not expect taxes to rise further in the very short term.
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 global geopolitical tensions to escalate, which
could have relevance to the Group through impacts on
financial markets and through heightened cyber risk.
In October SJP announced important changes to its costs
and charges for clients, which are expected to come into
force through 2024 and into mid-2025. To date there has
been minimal reaction from clients to these changes;
however, we are at the start of an important period of
communication and engagement with them to ensure that
they understand how their charges will change. We believe
the change improves our proposition for clients and as
such will have long-term benefits for the business. It also
reflects the Group’s long-term commitment to improving
client outcomes.
Although the new charging structure will not be launched
until mid-2025, a significant amount of the systems
development that is required will be conducted in 2024.
We are conscious of the risk introduced through this
significant project and the need for strong change
practices and careful management. We believe the
timeline is realistic for safely implementing the changes
and we have a positive track record, including recent
large-scale system migrations.
Whilst we consistently aim to achieve good outcomes for our
clients, we have reconsidered all our client-focused activities
and challenged where there may be features that could
inadvertently lead to, or insufficiently mitigate, risk of harm
to clients. This includes gathering further evidence from
our clients on their understanding of our key literature
and making changes to enhance the evidence we record
to monitor and assess the value delivered to clients.
For example, this has led to changes which will give
more consistent, centralised evidence of the activities of
the Partnership with clients and reduce the risk of clients
not receiving an ongoing advice service of value to them.
During the year the Group has experienced elevated levels
of complaints principally in connection with the delivery
of historic ongoing advice services. Given the claims
experience and further analysis the Group has committed to
review the sub-population of clients that has been charged
for ongoing advice services since the start of 2018 but where
the evidence of delivery falls below an acceptable standard.
A provision has been recognised at 31 December 2023
which includes an estimated refund of charges.
The emergence of Claims Management Companies
(CMC) interest in the Group and its clients may also have
an impact in relation to the ongoing cost of complaints.
This could be through other CMCs targeting the Group,
or general growth in clients seeking redress due to CMC
marketing. Alongside our existing advice standards and
checking processes, the actions we have been taking to
develop our proposition; enhanced evidential standards for
ongoing advice; and switching off ongoing advice charges
for clients who haven’t received an ongoing advice service
are expected to help to further manage the risk, and
mitigate the potential level of complaints over the
medium to long term.
Overall, we remain confident in our ability to withstand
further challenges that may or may not emerge from the
risk environment, which is described in more detail below.
Macroeconomic
The macroeconomic risks associated with high inflation,
the unwinding of 15 years of low interest rates and the
threat of increasing geopolitical tension are not to be
underestimated and the Group is not immune. For instance,
whilst noting that variations in new business flows are
not absolutely attributable to any one factor, the reduction
in net and gross new business levels over 2023 is believed
to be principally driven by changing economic conditions
for clients. Nevertheless, the Group’s business model
has demonstrated resilience, with inflows remaining
significantly positive through 2023, and we continue to
be well positioned to survive adverse conditions whilst
investing for long-term growth. We remain mindful of
key macroeconomic risks:
Asset prices could fall if the economic outlook
deteriorates. Asset price falls reduce future profitability
but, counter-intuitively, 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, should they occur,
although such scenarios would negatively impact
cash generation.
Whilst inflation has fallen over the last year, there can
be lagging effects (e.g. contractual inflation-related
increases) which render our strategic targets of both
limiting growth in controllable expenses to 5% per
annum and investing in the business to support future
growth more difficult jointly to achieve. A key strategic
consideration for the business is value creation through
development expenditure which will improve our
proposition for clients and Partners. The inflationary
environment also reduces clients’ investable income,
resulting in reduced new business and higher outflows,
particularly in the ISA and unit trust products.
Business loans to advisers continue to have higher
interest payments. 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.
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Current risk environment continued
Despite the potential macroeconomic risks we believe
there are good reasons to be optimistic about investment
opportunities across financial markets, and 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, the advantages of
which would have been experienced through 2023.
Regulatory change
Regulatory change is a constant and, amongst the
significant regulatory changes we face, the FCA continues
to reinforce the need for firms to embed the Consumer
Duty regulation. We are a client-focused business and
have engaged proactively with this important regulatory
initiative. Whilst we believe that we have consistently
aimed to achieve good outcomes for our clients, we
have reconsidered all our client-focused activities and
challenged on how we develop these activities to meet
current and ever-increasing expectations. The business
is embedding activity to monitor and assess clients’
outcomes and implementing Consumer Duty requirements
for closed books by July 2024. A very small relative
proportion of the Group’s liabilities are in closed book
policies; however, we recognise the importance of these
policies to the clients who have them.
Changes to the determination of the risk margin
requirement under Solvency II regulation were applied
prior to 31 December 2023. These changes saw a significant
reduction in capital requirements for SJPUK, the Group’s UK
insurance company. This has resulted in an improvement in
the Solvency II capital coverage for SJPUK. Whilst recognising
the rationale for the change and the potential benefits
of a release of capital, the SJPUK Board is giving careful
consideration to its financial risk appetite and ensuring
a prudent approach to capital management, recognising
the interests of SJPUK’s clients.
Climate change
Tackling climate change is 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 that our investments will be
net zero by 2050. More information on the actions we are
taking can be found in the Our Responsible Business
section under climate change.
Climate-change-related risks affect companies in different
ways, and periodically we carefully consider how climate
change could impact the Group. This allows us to identify,
understand and manage the 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. 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. 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 climate-related risks on our
business 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
business are low. We further work to understand the risk to
our material third parties’ and engage with them to share
and remediate material concerns.
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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 we recognise that the cyber environment continues
to develop, particularly with state-sponsored threats.
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 below 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
Building and protecting
our brand and
reputation
Being easier to
do business with
Our culture and being
a responsible business
Delivering value to
advisers and clients
through our investment
proposition
Continued financial
strength
Risk description
Business
priority Risk considerations Mitigation/controls
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, fund managers are
changed in the most effective way possible.
Continuous review and development of the
range of services offered to clients.
Engagement with fund managers around
principles of responsible investment.
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.
Increasing complaint
volumes.
Licensing programme which supports the
quality of advice and service from advisers.
Technical support helplines for advisers.
Client complaint handling process and
reporting.
Evidence of ongoing servicing of clients and
charge switch-off process where ongoing
advice has not been provided.
Review of the provision of ongoing advice
services in line with expectations and
acceptable evidential standards, and
refund of charges as appropriate.
Robust oversight process of the advice
provided to clients delivered by Business
Assurance, Field Risk, Advice Guidance
and Compliance Monitoring teams.
Partner financial monitoring.
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 appropriately invested
in high-quality, high-liquidity cash and
cash equivalents.
Direct lending to the Partnership is secured.
Part-reinsurance of insurance risks.
Ongoing monitoring of all risk exposures
and experience analysis.
Setting and monitoring budgets.
Monitoring and management of subsidiaries’
solvency to minimise Group interdependency.
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Risk description
Business
priority Risk considerations Mitigation/controls
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 objective.
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 the SJP
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 over the
control environment, particularly over 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.
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 and strengthening
operational resilience capabilities and
undertaking robust identification,
assessment and testing of important
business services.
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 a cyber event.
Group-Executive-Committee-level cyber
scenario work to test strategic response.
Internal awareness programmes.
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Risk description
Business
priority Risk considerations Mitigation/controls
Strategy,
competition
and brand
Challenge from
competitors
and impact
of reputational
damage.
Unnecessary delays/errors
caused by failures in change
delivery.
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.
Robust change governance and change
management practices, including testing.
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 outsourced 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 many activities:
conversations and workshops with stakeholders and
governance forums 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. The Group Risk Committee
reviewed emerging risks during 2023.
Examples of emerging risks that have been considered
include:
economic risks including cost of living and inflation;
geopolitical factors including consequences of the
invasion of Ukraine and the conflict in Gaza and Israel;
regulatory framework and increasing regulatory
landscape;
increasing regulation and legislation relating to
climate change;
employee-related risks including future specialist
skillset requirements for areas such as artificial
intelligence technologies;
competitor threat analysis including potential impacts
on Partnership;
technology enhancements including digitisation
and automation, artificial intelligence and ChatGPT;
cyber crime threats; and
energy supply risks including energy blackouts.
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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 taken
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 and Partner 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 as
at year-end 2023 demonstrated that the Group is resilient
and is expected to be able to continue to meet regulatory
capital requirements over five years should even the
more extreme risks materialise. For adverse stresses and
scenarios there would be impacts on profitability, and
depending on the severity of the scenario the Group
would review and implement recovery actions which aim
to protect and/or restore the Group’s finances. We have
demonstrated the use of these recovery actions through
the establishment of the provision relating to the review
of clients that have been charged for ongoing advice
services since the start of 2018 but where the evidence
of delivery falls below an acceptable standard.
Example stress and scenario test
As part of the strategic decision-making process,
the new charging structure was re-tested using
our standard suite of stresses and scenarios to
understand the resilience of the Group under
different charging models. While the new charging
structure was focused on improving our client
proposition it was imperative also to focus on
the outcomes for our advisers and shareholders.
We therefore stress tested a scenario whereby the
changes might be adversely received by the
Partnership and/or clients. In this scenario we
applied the following stresses to the cash flow and
solvency forecasts for the new charging structure:
reductions in new business; increases in lapses;
reductions in the proportion of clients paying
ongoing advice charges; and increases in expenses
(beyond those planned to implement the changes).
The results showed that whilst this scenario would
have an impact on profit prior to any mitigating
management actions, it would not cause solvency
concerns. Furthermore, we have been encouraged
by the response so far to the announced changes,
which gives us further confidence that the scenario
tested is highly unlikely.
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Resilience over different time horizons
The table below provides an indication of which risks are relevant over which 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 cyber crime, business disruption, or failure of operational
processes resulting in operational losses and/or material client
redress. There is also a risk that, despite establishing a provision,
we incur greater costs than provisioned for our review of ongoing
advice services.
Additionally, there are change delivery risks during 2024 due to
necessary upgrades to systems and business processes and
alterations to the business model, most notably to implement
the important changes to our charging structure which will take
effect in 2025. We adopt robust change control practices involving
periods of significant testing and take actions to manage
and mitigate the risks associated with the delivery of change.
Reputational risks from media attention can impact ability
to generate new and retain existing business.
The cost-of-living crisis and higher interest rates are also key risks
to business performance if they restrict clients’ capacity to invest
and stay invested.
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.
It is not expected that solvency will be an issue in the short term,
due to our matching approach on liabilities and the stress and
scenario testing work. 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.
Operational resilience and business continuity are important
control frameworks that are carefully managed through regular
assessments and a schedule of testing, working closely and
collaboratively with our third parties.
During 2023 the Group has experienced elevated levels of
complaints principally in connection with the delivery of historic
ongoing advice services. During 2024, the Group has committed
to review the sub-population of clients that has been charged
for ongoing advice services since the start of 2018 but where
the evidence of delivery falls below an acceptable standard
and has recognised a provision for the estimated cost of refunds.
Changing regulatory expectations following the introduction of
the new Consumer Duty regulation continue to be considered in
depth. We are a client-focused business and so any changes we
make are designed to be positive for our business over the longer
term, reducing regulatory and reputational risk and supporting
good client outcomes.
The Group generates relatively steady cash profits on new
business and existing funds under management which increase
each year as funds in gestation ‘mature’. The change to the
charging structure announced in October 2023 will alter the
pattern of cash generation due to the removal of the early
withdrawal charge and business written will be cash-generative
from year 1, once this change takes effect in mid-2025.
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 various options exist,
curtailing investment or reducing dividends would be potential
ways to protect the financial strength of the business. The
business currently 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.
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.
Our charging structure changes are expected to be implemented
in this timeframe. With this change will come operational risk and
expectations that cash profits will, all else being equal, reduce in
2025 and 2026. However, they are then expected to increase.
The importance of technology in the client proposition is only
likely to grow, and risks may materialise from rapidly developing
artificial intelligence technology and/or 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 2028
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 become 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,
this could have a reputational impact within this time horizon.
We are exploring opportunities in relation to artificial intelligence
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 our focus on 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,
alongside any new business written under the new charging
structure from mid-2025 onwards. This will therefore increase
our expected financial resilience. The changes we announced
in October 2023 should also at this point be well embedded and
contributing to further strengthening our competitive position.
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.
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As part of the Annual Report and Accounts
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 and Accounts.
The Directors consider that the report meets the statutory
purpose and objectives of the Strategic Report.
On behalf of the Board:
Mark FitzPatrick, Chief Executive Officer
Craig Gentle, Chief Financial Officer
27 February 2024
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Approval of the Strategic Report
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Governance
Board of Directors 88
Corporate governance report
(including section 172(1) statement) 90
Report of the Group Audit Committee 106
Report of the Group Risk Committee 118
Report of the Group Nomination
and Governance Committee 125
Report of the Group
Remuneration Committee 129
Directors’ report 158
Statement of Directors’
responsibilities 162
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As a 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 90 to
105 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.
The Board considers that the Company has
complied with all of the principles and provisions of
the Code (available at: www.frc.org.uk) during 2023.
In this section
1 2 3 4 5
Board leadership
and Company
purpose (section
172(1) statement)
Role of the Board
and its
responsibilities
Board
composition,
succession and
evaluation
Audit, risk and
internal control
Remuneration
See pages 90
to 97
See pages 98 and
99
See pages 100 to
105 and also the
Report of the
Group Nomination
and Governance
Committee on
pages 125 to 128
See the Report of
the Group Audit
Committee and
the Report of
the Group Risk
Committee on
pages 106 to 124
See the Report
of the Group
Remuneration
Committee on
pages 129 to 157
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Corporate governance
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Board of Directors
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 as a director of Henderson Smaller Companies
Investment Trust plc.
External appointments
Chairmanships of Majid Al Futtaim Trust and W.A.G. Payment Solutions Plc.
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
Mark FitzPatrick
Chief Executive Officer
Date of appointment
Chief Executive Officer December 2023
Experience
Mark started his career with Deloitte in Cape Town, becoming a Partner in
1997. He remained with Deloitte for 25 years building his industry focus in
financial services in the UK, Europe and South Africa. He became Group
Chief Financial Officer at Prudential plc in July 2017, before his role was
broadened to include Chief Operating Officer responsibilities for the
communications, legal, company secretarial and government relations
functions. He was appointed interim Chief Executive Officer of Prudential
plc in April 2022, standing down on 24 February 2023.
External appointments
Mark is on the boards of the British Heart Foundation and the Scottish
Mortgage Investment Trust, and chairs their Audit and Risk Committees.
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.
Full biographical details of each Director can be found
on our corporate website at www.sjp.co.uk
Annual Report and Accounts 2023St. James’s Place plc
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Governance
2 3 4 5
Board leadership and Company purpose
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Emma Griffin
RK
NC
RM
Independent Non-executive Director
Date of appointment
Non-executive Director February 2020.
Experience
Emma has previously been a non-executive director of EDF Man Holdings
Limited, 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 SDCL Energy Efficiency
Income Trust plc and N.M. Rothschild & Sons Limited. 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 company Claridge
and of one of its key holdings, Solotech.
Rosemary Hilary
AC
RK
NC
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
King’s Foundation and chair of its Audit and Risk Committee. She joined
the board of the Scottish Building Society in 2022.
John Hitchins
AC
RK
NC
Interim Senior 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 LLP,
specialising in financial services auditing and advisory services, before
retiring in 2014. Since retiring from PricewaterhouseCoopers LLP 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.
Lesley-Ann Nash
AC
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 and chair of the Remuneration
Committee of Workspace Group plc, a non-executive director and chair
of the Nominations and Remuneration Committee of Homes England and
a non-executive director of BusinessLDN.
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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 of our section 172
duty on decisions taken during 2023.
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 1)
emphasise the long-term focus of the
business. The Board’s priority is to
ensure 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 page 98, 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 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 Officer’s report and
Strategic Report, and examples of
significant topics considered by the
Board during 2023 are set out on
pages 94 to 97, together with details of
how the Directors had regard for
factors A to F in their considerations.
We have also taken the opportunity to
review our governance framework
during 2023 and have provided a
high-level overview of this review on
page 91.
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Section 172(1) statement
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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 it
by all of our stakeholders. Conduct
and reputation are prominent in our
list of principal risks (see pages 79 to
81) and we seek to minimise the risk of
harm to clients due to conduct issues
through a robust control environment.
The Board looks to the Group Risk
Committee and the boards of its
subsidiaries 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
Group’s brand and public relations
activities to ensure they align with our
purpose and long-term aims, and
accurately depict our culture.
Our stakeholders
Section 172 factors:
B
C
D
F
The Group’s principal stakeholders
are covered in more detail on pages 7
to 9 in the Strategic Report.
Whilst each stakeholder has different
motivations 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 18 to 23 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 and Accounts. Engagement
with stakeholders is assessed on an
ongoing basis and, where there is an
indication that it is not delivering
sufficient insight to support the
Board’s work, adjustments are made.
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.
Group governance review
When an organisation grows rapidly, it is very rare to see
all aspects of it developing at equal pace. The success
St. James’s Place has achieved over the past 32 years has
been possible because we have been effective at scaling
up our operations; however, all businesses should step
back from time to time and review their governance model
to ensure it has kept pace with the wider business.
In 2023, the Group undertook a review of its governance model,
recognising that our governance arrangements could be enhanced and
rationalised to reflect our size, impact, and operating model. The Board
was clear that the review should allow us to take stock and build in
proportionate and pragmatic governance by design, with the resulting
model allowing us to explain more clearly to our key stakeholders how
we are organised, operate, oversee, and delegate in a way which reflects
the size, complexity and impact of our business.
The review was carried out working with leading industry consultants
and amongst the findings identified the following opportunities:
Revisions to the corporate structure of the Group and the composition
of the boards of our subsidiaries. These revisions will support the Board
and management in overseeing the delivery of strategy, taking account
of an evolving regulatory environment whilst also aligning more closely
with corporate entity accountabilities. Changes will not only support the
effective operation of the Group but will also support subsidiary boards
in focusing on the requirements of the Consumer Duty, as it applies to
them.
Establishment of an enhanced delegation of authority framework that
aligns with regulatory requirements (including SM&CR) and promotes
clearer understanding by all across the organisation of the
accountabilities and responsibilities of individuals and collective bodies.
The review, and recommended actions also emphasised that culture
lies at the heart of robust and effective governance. Equally, governance is
an important ally for culture, delivering valuable guide rails for
safeguarding key aspects of a desirable culture and setting out for
all to see what is not acceptable.
In July 2023 the Board approved the recommendations of the governance
review, and will monitor implementation as it takes place.
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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. The calendar of events and methods of
engagement are under continual review as we seek to
provide our communities with opportunities to network,
share best practice and/or develop their skills and
knowledge. The scale and diversity of our adviser base
means that a blended approach to consultation provides
us with a greater depth of engagement and insight.
Consultations with specific cohorts in relation to key
projects, workshops with advisers and their support staff,
Partnership-wide surveys and an online engagement
platform enable us to understand the views of our advisers
at scale and measure sentiment over time. In early 2024,
Mark FitzPatrick also formed a CEO Partnership Advisory
Council which, amongst other things, will provide a
sounding board and a means to help deepen his
understanding of the business and the wider Partnership.
The insight generated from Mark’s interaction with the
Council will provide a further reference point for the Board.
Further information on advisers in this Annual Report and
Accounts can be found on pages 7, 8, 11, 12, 18-22, 61, 77, 80, 95,
123, 179 and throughout the our responsible business section
on pages 24-49
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; and in 2021, following a
review, we established in its place a panel of employee-
nominated representatives to assist our designated
Non-executive Director responsible for workforce
engagement. The role and function of this panel has
continued to evolve and during 2023 there was a focus on
the value created for both the Board and the Panel, with
Lesley-Ann acting as a channel for two-way dialogue. The
membership of the Panel has been streamlined and the
meeting agendas refocused from the top down to
stimulate more strategic and challenging discussions.
Panel members are charged with relaying and discussing
the key areas of activity and focus with the workforce in
their areas of the business.
Further information on employees in this Annual Report and
Accounts can be found on pages 7, 8, 18, 22, 80, 94, 96, 104, 105,
122, 127, 132, 133, 139, 148, 160, 183 and throughout the our
responsible business section on pages 24-49
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 clients’ 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. The FCA’s Consumer Duty now also
requires boards to approve annually an assessment of
whether their companies are delivering good outcomes for
clients consistent with the Duty. Direct and indirect
engagement with clients will provide valuable insight and
evidence to support these assessments.
Further information on clients in this Annual Report and
Accounts can be found on pages 4, 7-11, 14-23, 50-54, 77-79,
94, 95, 97, 104, 110, 114, 117, 118-124, 138, 139 and throughout the
our responsible business section on pages 24-49
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. It is
important we have a voice on the issues in society where
we can most constructively contribute, such as 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 include 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 and
Accounts can be found on pages 7, 9, 22, 97, 105, 139
and throughout the our responsible business section
on pages 24-49
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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
2023 included a broad programme of in-person shareholder roadshows and investor conferences,
supplemented by virtual engagement. We conducted roadshows in the UK and overseas
specifically to give investors the opportunity to discuss our full-year and half-year results, but also
scheduled others away from key reporting periods, to discuss a broader range of strategic and
operational topics.
We attended conferences organised by 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
feedback reports
In addition to gathering feedback directly from institutional investors, we receive formal broker
feedback reports following our investor roadshows, and ad-hoc intelligence and updates from
brokers throughout the year. Together, these provide the Board with an opportunity to understand
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, which provides 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 2023, the Chair 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.
The Chair of the Group Remuneration Committee also corresponded and met with several
shareholders who had elected to vote against the Directors’ Remuneration Report at the 2023 AGM,
to help the Board understand their reasons for doing so.
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 had written to shareholders during 2022 year to explain the proposed
changes to the Remuneration Policy for Executive Directors, and subsequently met and/or
corresponded with a number of shareholders who provided feedback in 2022 and 2023 ahead of
the Annual General Meeting (AGM) (further information can be found in the Directors’
Remuneration Report on page 130).
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 15 May
2024 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 4, 6, 7, 9, 23, 50, 52, 57, 58, 66, 29, 81, 95, 97, 98, 102,
105, 130, 131, 149, 159-161 and 262
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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. Board 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. Alongside regular reporting from
management and the chairs of Committees and subsidiary boards, topics that the Board focused on in 2023 included
Consumer Duty, our investment management approach, the competitive landscape, Partner business finance, our
business in Asia, client administration, our client charging model, our approach to being a responsible business and our
people and culture. Below we have given some examples of how of the Board’s activity in 2023 had regard to the duties
under section 172.
Consumer Duty
As we outlined last year, the Board recognised early
the significance of the FCA’s Consumer Duty (the Duty)
and approved in October 2022 a plan to ensure SJP
was successful in implementing the Duty within the
timeframes set by the FCA. The Duty is perhaps the
most significant UK regulatory development of the last
decade and, whilst we were confident our culture and
practices were aligned with its spirit, it is important that
we can evidence this. As a group made up of a number
of financial services companies each with different
roles, from advice to the manufacturing of products for
retail customers, a significant amount of the associated
distribution chain sits within the Group. This provides a
strong basis for exerting control and providing the Board
with assurance. Although the Company is not itself
directly authorised and regulated, the role of its Board
is to ensure that the overall proposition for our clients
sees each of our subsidiaries acting in good faith for
our clients, avoiding foreseeable harm to them and
enabling and supporting them to pursue their
financial goals.
The FCA communicated regularly with the industry on
the Duty during 2023 and Directors attended some of
the ‘in-person’ events. These sessions enabled the FCA
to outline what its expectations meant for firms, as it
began to assess the different approaches that were
being taken to evidence that clients were receiving
good outcomes. This, together with direct engagement
with the FCA, provided a valuable point of engagement
for the Board with an important stakeholder. Whilst we
already have a range of ways of engaging with clients,
further studies carried out via the Wisdom Council
contributed to our assessment of client understanding.
Engaging with Partners, who act as intermediaries
between SJP and clients, allowed us to capture their
perspectives alongside client feedback that Partners
themselves had received.
Since the Duty was announced, the FCA has been
clear that organisational culture needs to drive positive
consumer outcomes. Our focus on people and culture
is set out on page 96 but in the context of the Consumer
Duty implementation, the Board looked to employee
surveys to gain valuable insight into SJP’s culture,
exploring in particular how embedded our desired
values and behaviours and client-centricity are at all
levels of the organisation. The Board was pleased to see
that employee understanding of expected values and
behaviours was strong and that almost all employees
felt their line managers exhibited them. The survey also
helped isolate areas where there is still room for
improvement and actions have been agreed as a result.
The Board, the boards of SJP’s subsidiary companies
and the Board’s principal committees monitored closely
the progress made in implementing the Duty, receiving
regular reporting at Board meetings as well as input
from the second and third lines of defence via the Group
Risk Committee and Group Audit Committee. Whilst John
Hitchins is our appointed Group Non-executive Director
Consumer Duty Champion and stayed close to the
implementation programme, the Board as a whole
has embraced the Duty, challenging management to
demonstrate how proposals put to it will lead to good
client outcomes and do not present risk of client harm.
Consumer
Duty
People
and culture
Client
charging
model
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Client charging model
As Andrew Croft commented in the announcement
made on 17 October 2023, we are confident that SJP
offers its clients real value that helps individuals and
families achieve financial wellbeing. But whilst we are
confident that we can evidence this, what is ultimately
important is what clients think. In 2023, the Board agreed
changes to our charging structures that aim to ensure
we have a sustainable and competitive charging
platform for the long term, offering simplicity,
comparability and a continued focus on value for
clients. Whilst the Consumer Duty work may have
provided a valuable catalyst for us to carry out the
evaluation that ultimately led to the changes, the
Board was able to draw upon insights from a wide
range of stakeholders.
As explained on page 12, the demand for advice is
increasing and we believe SJP provides access to
services and products to meet that demand. However,
if we are to capture the opportunity that exists, we need
to be relevant to those seeking advice. It is increasingly
evident that consumers are seeking simple comparability,
and this has been reflected in regulatory trends too, as
highlighted with the Assessment of Value and Consumer
Duty regimes. We also cannot ignore media scrutiny
and recognise that the onus is on us to ensure the
value and cost of our offering are understood.
It was evident from the outset that any changes we
made to our charging model would impact most, if not
all, of our stakeholders, and the challenge for the Board
was therefore to balance the interests of each of these
stakeholders, ensuring all the while that the changes
met the Consumer Duty rules. Although engagement
with stakeholders contributed to the mandate for
change, ongoing engagement during 2023 helped
inform the finer details of the changes ultimately
agreed by the Board. The Board also looked at the
impact of implementing the changes, in particular
the cost, time frame and the consequences that a
significant transformation programme would have
for the workforce and the Partnership.
Regular engagement with regulators was vital during
the development of options, providing us with their
interpretation of applicable regulations and also their
consumer lens. Our Partners provide another important
reference point when considering how changes could
be received by clients and so we selected a group of
Partners to help us to test the viability of options. Board
workshops provided opportunities for the Board to
explore the developing options and provide input, with
updates on progress being provided at scheduled and
additional Board meetings. Input was also sought from a
number of our advisers who were able to assist us as we
got closer to making a decision, helping us to anticipate
the reactions of stakeholders that we could not obtain
first hand, for example our shareholders and the media.
Although media attention ahead of the Board reaching
a decision impacted our ability to deliver the changes in
the way we would have liked, the Board believes that the
changes made take account of the interests of all of our
stakeholders in providing a basis for sustainable growth
and long-term success, which can only help to strengthen
our brand and reputation. The Board will continue to
ensure that the interests of stakeholders are taken into
account as we implement the changes in 2024 and 2025.
Consumer
Duty
People
and culture
Client
charging
model
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People and culture
We remain confident that we have the right business
model and strategy, but the success of both relies
heavily on having the right people and culture. Recruiting,
developing and retaining the talented people we need
to deliver successful outcomes for our clients, Partners
and other stakeholders is a priority for SJP. Recent events,
including the pandemic and cost-of-living crisis, have
demonstrated that we cannot take our people for
granted and more than ever we need to understand
who our employees are and what motivates them.
Over time the composition of our people will evolve in
line with societal demographics, and this will inevitably
create an element of generational shift in workforce
culture. The availability of data and insight means
organisations can no longer approach their people
as homogeneous groups. Like many organisations,
for many years our principal form of engagement
had been a comprehensive employee survey carried
out biennially. But given the importance of our people
to our long-term success, it is critical that we have a
more intimate understanding of their strengths and
weaknesses, what motivates them and what is not
acceptable to them so that we can ensure we have
the right people strategies to recruit, develop and retain
the expertise we need. This has resulted in us adapting
how we engage with our employees in recent years.
As we explain on page 40, our Workforce Engagement
Panel plays a vital part in employee engagement,
together with the other means of engagement outlined
on the same page. Lesley-Ann Nash updates the Board
at each meeting on workforce engagement and during
2023 the Board has also heard regularly from our People
Director, Amy Morton. The Board has considered and
approved our people strategy and spent considerable
time considering employee culture, both as part of our
Consumer Duty work and as part of our ongoing focus
on inclusion and belonging. The Group Risk Committee
has also kept a keen eye on people risk, which we
recognise as being one of our principal risks.
Strengthening our approach to engagement, together
with the direct interaction Directors have had with the
workforce, has provided insight that has been invaluable
to the Board’s work. The Board’s role is to ensure our
culture is aligned to our purpose, values and strategy
and promotes integrity and openness whilst also valuing
Inclusion and Diversity. Where evidence suggests that
this is not the case the Board has acted to address the
root cause. Our focus on culture during the year has
influenced our consideration of compliance with the
Consumer Duty and the succession planning for our
new Chief Executive Officer. Ongoing insight from
management, coupled with ‘deep dive’ reviews,
has also helped the Board to home in on what matters
to our stakeholders and this in turn informs us of their
perception of our brand and reputation. It also enables
us to identify areas where we need to be clearer on
our expectations so that we protect the business
from undesirable cultural drift.
Client
charging
model
Consumer
Duty
People
and culture
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Simplifying our client charging models
During 2023, we completed an internal evaluation of our charging
structures and announced changes which will benefit all of our
stakeholders in the long term.
As the UK’s leading provider of advice-led wealth management, with £168.2 billion of funds
under management and over 958,000 clients, we have a clear understanding of the growing
need for trusted financial advice, and the critical value it provides for clients in delivering the
support and expertise that they need to build their financial futures. Over more than 30 years,
we and our Partner businesses have evolved to meet changing client expectations and
developments in the industry and regulatory landscapes. In 2023 we saw a shift in the wealth
management landscape, with the introduction of Consumer Duty cementing good client
outcomes and value at the heart of our industry.
We treated the work required under Consumer Duty as an opportunity to continue to evaluate
our business and ensure that we have a sustainable and competitive charging platform for
the long term. Following an internal review, the Board decided to make some changes to our
charging structure, which are planned to come into effect during the second half of 2025.
The changes create a revised charging structure for the vast majority of new investment
bonds and pensions. From the second half of 2025, these will operate with an initial charge
and ongoing charges applicable from the outset, and without any early withdrawal charges
or gestation period, as is already the case with our unit trust and ISA business. In addition,
charges across all our wrappers, which have historically been disclosed primarily on an
all-inclusive basis, will be separated into component parts. Furthermore, we have rebalanced
our charges so that they better reflect the value clients see across each element of our
proposition.
The Board anticipates that the decision to change our charging structure will benefit our
stakeholders as follows:
Clients – In addition to benefiting from improved simplicity and therefore comparability,
clients will see enhanced value from the changes we are making, with reduced overall
ongoing charges for existing client investments across our core product wrappers.
Partners – Making these changes will position SJP and the Partnership for long-term,
sustainable success, with our charges continuing to compare favourably with competitor
rates available in the marketplace, representing good value for the high-quality service
that we provide alongside our Partners. This will support our brand and reputation in the
marketplace, which will in turn benefit the Partnership.
Shareholders – For shareholders, these changes will reduce complexity and improve
market comparability, supporting our brand and reputation, and broadening SJP’s appeal
over time. This will set us up to maintain our market leadership over the long term, with an
Underlying cash result that is aligned with the development of total Group funds under
management.
Society – These changes, which naturally involved engagement with our key regulators,
address the evolution over time of an external environment that is increasingly seeking
simple comparability of all advice, investment management and other services, on a
component-by-component basis.
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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 161.
At the 2023 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 2024 AGM, or 30 June 2024,
whichever is the earlier. The Company
did not purchase any of its own shares
during 2023 but the Directors will
propose the renewal of this authority
at the 2024 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 includes the senior
manager functions and management
responsibilities held within each
subsidiary of the Group (as applicable).
Division of responsibility
The job descriptions of each Director, including the Chair and Chief
Executive Officer, 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 Company Secretary are summarised below.
The Board
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 Officer
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 and
liquidity activities of the Group;
and for maintaining effective
investor relations.
The Chief Executive Officer has formed a committee of executives to support him
in fulfilling the responsibilities delegated to him by the Board. The Group Executive
Committee (GEC) comprises the Chief Executive Officer, Chief Financial Officer and
other members of senior management.
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.
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.
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Planning and preparing
The Chair is responsible for setting the Board agenda together with the Chief Executive Officer and the Company Secretary.
The Group’s strategy and business plan provide a 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 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 principal Committees appointed by the Board is covered in more detail in the individual
Committee reports.
See pages 106 to 157
Scheduled Board
meetings
Scheduled Board meetings follow an agreed format with the final agenda being set by the
Chair, Chief Executive Officer 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 Chief Executive Officer and Chief Financial Officer
reports 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 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 Officer wants to provide an update on topical issues where the
gaps between formal Board meetings are longer.
Board working
dinners
Board dinners provide valuable opportunities to deepen relationships, trust and rapport,
and help the Board to develop greater unity, alignment and resilience. Dinners are usually
held around Board meetings and allow for informal unstructured engagement, as well as
the chance to meet and hear from other members of the management team or guests
from outside the business.
Strategy meetings
A focused strategy meeting is usually held each year during the delivery periods in the
strategy cycle to enable the Board and management to reflect on, debate and refine the
existing Group’s strategy. The Board is more closely and regularly involved when strategy
is being set, meaning these meetings may not be required.
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, either to
support their understanding of key facets of the business, or wider trends and developments
that are influencing the Board’s agenda. Further details can be found on page 103.
Other meetings
The Board also appoints ad-hoc committees from time to time to manage procedural matters
relating to decisions it has made.
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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 127, embracing diversity is one of our
core cultural values and the Board diversity policy 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.
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 on
our Board, gained both within and outside the financial
services sector, 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 127.
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
served for short periods beyond the ninth anniversaries of
their appointments to the Board, to facilitate an orderly
handover of their responsibilities.
Further information can be found in the Report of the Group
Nomination and Governance Committee on page 125 to 128
Tenure
0–3 years 4
4–7 years 3
Gender
Female 3
Male 4
Ethnicity
White 6
Minority Ethnic 1
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Board and Committee structure and attendance
Our Non-executive
Board Committees
The Board has appointed four
principal Non-executive Committees.
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 106 to 157.
Group Nomination
and Governance
Committee
Chair:
Paul Manduca
Report on
page 125
Group Risk
Committee
Chair:
Rosemary Hilary
Report on
page 118
Group Audit
Committee
Attendance in 2023
Director Board (total 6) Audit (total 6) Risk (total 5)
Nomination and
Governance (total 4)
Remuneration
(total 4)
Dominic Burke (SID)
1
Andrew Croft (CEO)
2
– – – –
Mark FitzPatrick (CEO)
3
– – – –
Craig Gentle (CFO)
– – – –
Emma Griffin
–
(Chair post AGM)
Rosemary Hilary
(Ch ai r)
John Hitchins
(Chair post AGM)
–
Paul Manduca (Chair)
(Chair)
– –
(Chair)
–
Simon Jeffreys
4
(Chair pre AGM)
Lesley-Ann Nash
–
–
Roger Yates
4
(Chair pre AGM)
Attendance Non-attendance
1 Stepped down 31 January 2024.
2 Stepped down 30 November 2023.
3 Appointed 1 October 2023.
4 Stepped down 18 May 2023.
This table provides details of scheduled meetings held in the 2023 financial year and
the attendance at each meeting of the members of the Board and each Committee.
Simon Jeffreys and Roger Yates stepped down from the Group Audit, Group Remuneration,
Group Risk and Group Nomination and Governance Committees on 18 May 2024.
Dominic Burke, Emma Griffin and John Hitchins joined the Group Nomination and Governance
Committee on 18 May 2023. Dominic Burke also joined the Group Remuneration Committee
on 18 May 2023. Dominic Burke stepped down from all of the Committees on 31 January 2024.
Dominic Burke’s absences as indicated in this table are attributable to pre-existing commitments
at the date of appointment.
Other forums reporting to the Board
In addition to the wholly Non-executive Director 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 Officer 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 Executive Directors 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.
Chair:
John Hitchins
Report on
page 106
Group
Remuneration
Committee
Chair:
Emma Griffin
Report on
page 129
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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 is 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, knowledge 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
be re-elected, and further information can be found in the Notice of Meeting for the forthcoming AGM.
Duration of
appointments
Non-executive Directors 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 Majid Al Futtaim Trust and W.A.G Payment
Solutions Plc. He had a full attendance record at the Company’s Board meetings in 2023 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 another quoted company board, 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 2023, and remain in force at the date of this report.
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Directors’ development
Inductions for new Directors
An appropriate induction and development 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 and aim to address development needs identified at appointment.
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 2023
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 current and future technology developments within
the business, and climate transition planning. The sessions are led by a mixture of internal
and external subject matter experts, as was the case with the November session on climate
transition planning. 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 Group Audit Committee report on page 116.
Visits to head office, other
locations and service providers
to meet with employees and
members of the Partnership
During 2023 Directors visited SJP offices both to attend Board and Committee meetings and as
part of their ongoing engagement with management and employees. The Directors were also
able to attend a number of conferences held for advisers.
Attendance at subsidiary
board meetings, executive
committees and
management forums
Periodically, Non-executive Directors attend meetings of the boards of subsidiary companies
to gain further insight. They are also invited to attend other management forums where
appropriate and relevant.
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.
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 and the Board’s advisers to explore in more
detail 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, specific meetings and development sessions will be set up to support
the Director’s understanding of 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 increase 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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2023 Board effectiveness review
Reflecting on the 2022 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. Independent Audit were also engaged to support the internal reviews carried
out in 2022 and 2023. The 2022 review identified several areas of focus which are summarised below, together with updates
on the progress made in 2023.
Area of focus Update on progress
People and culture
At each scheduled meeting the Board receives updates on our people from both
the Chief Executive Officer and the nominated Non-executive Director for Workforce
Engagement. In 2023 the Board focused on how to ensure value is being created for both
the Board and the Workforce Engagement Panel and our employees. In the second half
of 2023 the focus of the Panel shifted to allow for more strategic discussions and effective
challenge by streamlining the Panel membership, absorbing early career representation,
directing the meeting agenda from the top down and reducing the length of the Panel
meetings while increasing their frequency. During 2023 our People Director also regularly
presented to the Board on culture, employees and recruitment. 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 receives
updates on aspects that impact people, including recruitment and retention.
Big trends and
external environment
This is an area that is prominent on the wish lists of most organisations, which recognise
that, whilst the pace of change has never been faster, it is also unlikely to be slower in the
future than it is today. It is therefore crucial that the Board continues to expand its horizons
if it is to anticipate how macro changes and more volatile external environments will
impact SJP’s business model in the future. Inviting experts to meet with the Board to share
their perspectives on topics such as developments in technology and climate transition
provided valuable insight in 2023. Opportunities for Directors have not been limited to
Board engagements, with Directors also attending Technology Advisory Group meetings
where external specialists and internal experts focus on emerging technology trends and
SJP’s own roadmap.
Investment performance
and client outcomes
Throughout 2023 the Board received regular investment performance updates and
also received an in-depth session on the Group’s investment management approach.
The introduction of the Consumer Duty has heightened the focus on consumer outcomes,
a material aspect of which is the performance of their portfolios. As reported earlier in
this report, the Board monitored closely the implementation of the Consumer Duty,
which highlighted opportunities where improvements could help ensure the investment
proposition delivered demonstrable value to clients. Whilst it is the board of our subsidiary,
St. James’s Place Unit Trust Group Limited, which is responsible for approving SJP’s Value
Assessment Statement report, the Board received regular updates on progress and also
reviewed the final draft prior to its publication.
Succession
As part of the project to identify and appoint Mark FitzPatrick as Andrew Croft’s successor
as Chief Executive Officer, the Board received regular verbal updates from Paul Manduca
on the Group Nomination and Governance Committee’s progress. The Group Nomination
and Governance Committee also received updates on the Group governance review,
a component of which looked at the composition of boards and committees across
the Group. Succession planning plays an important part in our governance framework
as it ensures we have the depth and breadth of expertise available to support strong
governance in operation. Further information can be found in the Group Nomination
and Governance Report on page 126 and 127.
The 2023 review
Although the Board was not required to carry out an externally facilitated review in 2023, the Board chose to appoint
Independent Audit to provide support in carrying out its review. The aim of the 2023 review was to review the role of the
Board and the effectiveness of individual committees. Independent Audit was provided an opportunity to comment
on the outline of the review set out on the following page.
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Themes emerging
The 2023 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.
Chairing
The Board is well chaired and is well positioned to exert greater influence and drive rigour
in decision-making. All committees are felt to benefit from strong chairing, with the Chairs
of the Group Audit and Remuneration Committees having settled well into their new
positions.
Board governance
The Company Secretary has supported the transition since Paul Manduca was appointed
Chair of the Board with a formalisation of board governance.
The Board’s contribution
The Board has provided a platform for challenge, where Directors have been able to raise
their perspectives constructively. Disagreement has been handled in a collegiate way
resulting in the Board making informed decisions.
Areas for focus
The areas identified for the Board to focus on in 2024 and beyond are summarised below, together with an overview of
action already taken.
Area of focus Summary
Board environment
2023 was a year of change for St. James’s Place with the appointment of our new Chief
Executive Officer and the introduction of a new pricing structure. With change comes
opportunity and in 2024 the Board will focus on further strengthening the bonds between
the Non-executive and the Executive Directors. The Chair and Chief Executive Officer plan
to build into the Board’s activities opportunities to strengthen existing and form new
relationships, allowing individuals to get to know each other by spending time together
both formally and informally around Board meetings, one-on-one and as a group.
Board composition
The Board recognises that, with the increasing burdens on Directors, particularly in
financial services, it is important to ensure the Board has sufficient depth and breadth of
experience. The process of appointing a new Senior Independent Director is well
underway and, once appointed, the Board will focus on whether further appointments
would benefit the Board. This will be led by the Group Nomination and Governance
Committee and will take account of its ongoing succession planning. As the regulatory
focus and demands on individual subsidiary companies have increased, this will also
form an important part of the Board’s considerations.
Decision-making
It is during times of change that boards learn the most about themselves. 2023 was a
year of change for St. James’s Place and, reflecting on the Board’s role in that change,
it identified opportunities to work with management to further improve the efficiency and
timeliness of decision-making, whilst maintaining an environment that promotes
constructive challenge and open debate. The appointment of a new Chief Executive
Officer will provide a helpful catalyst as he brings a fresh eye, seeing the process from
both the management and Board perspective. The Board has also reviewed its forward
agenda for 2024 to ensure scheduled deep dives place Non-executive Directors in the
best positions from which to challenge.
Stakeholder relationship
In 2024 the Board will focus on strengthening its relationships with all of its stakeholders
including shareholders, advisers, employees, clients, the Regulator and society as a
whole. Key to this will be the effective capture of insight on the views of each stakeholder
group, which can only be achieved through the building of strong relationships with open
communication.
By order of the Board:
Paul Manduca, Chair
27 February 2024
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John Hitchins
Group Audit Committee
membership
Members and date joined Committee
John Hitchins
(Chair from 18 May 2023)
1 January 2022
Rosemary Hilary
17 October 2019
Lesley-Ann Nash
1
31 January 2024
1 Interim member.
Note: Simon Jeffreys was a member/Chair of
the Committee from 1 January 2014 to 18 May
2023, Roger Yates was a member of the
Committee from 1 July 2014 to 18 May 2023,
and Dominic Burke was a member of the
Committee from 1 November 2022 to
21 January 2024.
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/shareholders/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; Group CEO; Chair
of the SJPUK Board; Chief Financial
Officer; Chief Risk Officer; Internal
Audit Director; Chief Actuary;
Director, Financial Reporting;
and Senior Statutory Auditor.
Dear Shareholder,
In my first financial year as Chair, I am
pleased to present the Committee’s
report for the year ended 31 December
2023. The report provides insight into
our work over the year, and details
how we have discharged the
responsibilities delegated to us
by the Board. On behalf of the
Committee, I would like to thank my
predecessor, Simon Jeffreys, for his
valuable service as Committee Chair.
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 continues to be
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 recognising the importance of the
UK Corporate Governance Code (the
Code), the Committee responded to
the Financial Reporting Council (FRC)’s
Code consultation in September 2023
by providing feedback on the proposed
revisions. Whilst the decision from
the FRC in November was to limit
the update with more targeted and
proportionate revisions, management
continued to develop aspects of the
original proposals which it believes
the Group would benefit from. The new
Code was published in January 2024
and was in line with the November
announcement.
The FRC selected the Group’s FY22
Annual Report and Accounts for
review as part of its standard
corporate reporting quality review
process. The FRC queried how the
Group had classified the sale
proceeds from the disposal of
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Partner loans within the Investment
segment of the Consolidated
Statement of Cash Flows. We had
judged that our treatment was
consistent with the requirements
of IAS 7 for the classification of the
disposal of long-term assets, given
that the transaction to dispose of a
large portfolio of Partner loans was
different in nature to the more routine
activity of advance and repayment
of loans which are classified as
Operating cash flows. However,
the FRC determined that the IAS 8
requirement for consistent application
of accounting policies should be
considered a priority and as a
consequence within the FY23
Annual Report and Accounts we have
reclassified the sale proceeds from
“Investing” to “Operating” activities.
The review of the FY22 Annual Report
and Accounts by the FRC does not
provide any additional assurance
regarding the report’s accuracy and
the FRC does not accept any liability
in relation to its review. The Committee
thanks the FRC for its cooperation, and
its contribution towards our continual
efforts to improve the quality of our
Annual Report and Accounts.
Looking ahead to next year, the
Committee will be monitoring the
project to review historic ongoing
servicing activity and assessing the
development of the Ongoing Service
Evidence provision. The Committee
will also be closely monitoring the
implementation of the significant
project in progress to implement the
charge changes announced during
2023. As always the Committee
will continue to monitor for future
developments in relation to
accounting regulation; and will
continue to receive regular progress
updates from management on
applying the revisions to the Code
prior to the relevant application dates.
Finally, following changes to the
composition of the Committee,
I would like to thank Dominic Burke
for his time on the Committee and
welcome Lesley-Ann Nash as an
interim member of the Committee.
John Hitchins
On behalf of the Group Audit Committee
27 February 2024
Operation and performance
of the Audit Committee
The Chair of the Committee discussed
agendas and significant matters
separately with the external auditors
and the Internal Audit Director in
advance of 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
101. The Committee also welcomed
attendance from 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 auditors,
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. During 2023 these
sessions focused on the Group
charging structure changes and
financial crime. Committee members
also attended external briefings and
technical updates, for example those
given by the major accounting firms.
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 the overall
assessment of its effectiveness (see
pages 104 to 105). The Board and the
Committee remain satisfied that the
Committee operated effectively and
that, as a whole, the Committee
members have the experience
and qualifications necessary,
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. With regard to the Audit
Committees and the External Audit:
Minimum Standard published by the
FRC in May 2023, the Committee is
content that it meets the relevant
responsibilities set out in the Standard
as demonstrated by this report.
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 2023.
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The Committee’s activities are centred on a rolling cycle of key areas
of focus and events as summarised in this timeline:
Management present the
Half-Year Report and Accounts
External auditors present their
half-year review report
Internal Audit present their
interim Internal Controls
Evaluation
Internal Audit present their
internal audit plan for the
following year
External auditors present
their year-end plan
July October
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 Money Laundering Reporting
Officer (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 its
terms of reference and evaluates
its performance
May
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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
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
November January
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
February
In addition to the items set out in the diagram above, 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
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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 108 and 109, are supplemented during the year
with informal discussion 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
Significant issues considered How these were addressed by the Committee
Accounting judgements and actuarial assumptions
Following the elevated client complaints experienced
during 2023, on 27 February 2024 the Group made the
decision to review the sub-population of clients that
has been charged for ongoing advice services since
the start of 2018 but where the evidence of delivery
falls below an acceptable standard.
Management judged that this was an adjusting post
balance sheet event and has recognised a provision for
the costs this review of £426 million at 31 December 2023.
In light of the uncertainties that exist in relation to the
provision, it is considered to be a critical accounting
estimate.
In July 2023, SJP announced a reduction to its ongoing
product charges for onshore bonds and pensions after
the tenth anniversary.
In October 2023, SJP announced planned changes to
ongoing charging structures across the Group, including
those written in its life insurance entities, SJPUK and SJPI.
The changes are applicable to in-force business after the
later of exit from the early withdrawal period or 1 July 2025.
The projected monthly cash flows used in the year-
end 2023 Solvency II and EEV results reflect both
these changes.
As part of the year end exercise management provided a
paper to the Committee setting out the key accounting
judgements and actuarial assumptions.
The Committee sought to understand the calculation
of the provision and the key estimates within it.
In relation to the provision, the Committee challenged
management on:
The adequacy of the provision, and
Compliance with the disclosure requirements of IAS 37,
particularly including consideration of the sensitivities.
The Committee concurred that it was appropriate to
recognise an adjusting post balance sheet event in
relation to the costs for the announced review. It was
satisfied with the approach that management had taken,
the judgements made in respect of the key assumptions
and the level of disclosure provided in the notes to the
financial statements.
The Committee noted management’s assumptions
in relation to the treatment of cash flows for Solvency II
and EEV. As both have been the subject of market
announcements, the Committee was in agreement
with the approach taken.
The Committee was satisfied with the judgements
made, in particular with the impairment reviews of the
operational readiness prepayment, partner loans and
goodwill, given the prevailing macro-economic conditions.
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Other matters considered How these were addressed by the Committee
Accounting regulation and audit
The Group implemented IFRS 17 Insurance Contracts
during the year.
The Committee have been appraised of the
implementation at various points over recent years,
leading up to the initial adoption of IFRS 17 in the
Interim accounts and then on a full year basis at
31 December 2023.
The Committee observed that the impacts were relatively
small and broadly in line with their expectations.
Following enquiry of the external auditor they were
satisfied that the disclosures were in line with the
requirements of the standards, in particular for first
time adoption.
Final results and Annual Report and Accounts
The Committee reviewed and provided input into the
periodic financial reporting, including the half-year Report
and accounts and full-year accounts for 2023, including
the final results announcement, and the Group Annual
Report and Accounts for 2023, 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.
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)
Client Asset Sourcebook (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
Task Force on Climate-Related Financial Disclosures
(TCFD) – which encompassed the Group, 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. In particular it noted that following
the Prudential Regulation Authority (PRA)’s announcement,
the requirement for SJPUK to prepare a Regular Supervisory
Report (RSR) requirement had been removed, and the
calibration of the risk margin calculation had been
revised, both effective from 31 December 2023.
The Committee reviewed the 2023 year-end SFCR
and approved its submission to the PRA.
The Committee reviewed and was satisfied with the
CASS external audit reports.
The Committee noted the validation exercise on
the content of the TCFD report, and was satisfied 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 FRC’s 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 2023 were fair, balanced and understandable.
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Matters considered
during the year
continued
External audit
Audit tender
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. 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
and allowing for a smooth transition
between audit firms in order to
mitigate risk for stakeholders.
The FRC’s Audit Committees and
the External Audit: Minimum Standard
sets out the FRC’s expectations and
guidelines regarding the tendering
for external audit and will be used
to support the process.
Auditor activity
To launch PwC’s programme of work,
the Committee received and agreed
their plan for the audit of the 2023
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.
As in previous years, PwC attended
all Committee meetings and the Chair
of the Committee also regularly met
with Gary Shaw, the Group’s Senior
Statutory Auditor (appointed since
May 2022), to receive updates on
progress and discuss any
private matters.
The Committee also asked PwC to pay
particular attention to the assessment
of the Ongoing Service Evidence
provision and its associated
judgements, as well as to the
implementation of IFRS 17 and was
satisfied with the results of PwC’s
work and findings.
Auditor independence, objectivity
and effectiveness
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 2022
audit process. The effectiveness of PwC
and the external audit process were
assessed in various ways, including:
feedback from management involved
in the audit; feedback from the
Committee; assessing audit quality
including a discussion with PwC of how
they had addressed any risks to audit
quality that they had identified;
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 indicators (AQIs)
were discussed and introduced to
the audit plan for the first time this
year. The AQIs were tailored to the
audit to provide quantitative and
qualitative metrics regarding the
audit process. They are intended
to be long-term measures that
are reported over multiple
year-ends to enable trends to be
identified, reported and discussed
with further action and analysis
being undertaken as required.
In their audit report to the Committee,
PwC confirmed that they remain
independent of the Group.
Management presented to
the Committee the results of its
assessment of PwC’s independence
and objectivity, as part of the annual
evaluation of the external auditor
covering six key areas: level of audit
and non-audit fees including audit
fee benchmarking; review of services
against the policy on auditor
independence to confirm adherence;
PwC’s policies and processes for
maintaining independence which
were confirmed via a letter of
independence following PwC’s
own independence assessment,
and additionally management
interrogated client administration
systems and the Company’s share
register to ensure that none of the
senior management team involved
in the audit held any SJP products or
shares; threats to independence and
safeguards PwC have applied which
were communicated via PwC’s letter
of independence, employment of
former PwC employees, and rotation
of key audit personnel. Having
reviewed and discussed the results,
the Committee was in agreement
with management’s assessment
and concluded that PwC remained
independent and objective.
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The Committee carried out its
annual review of the policy on
auditor independence with the review
resulting in minor changes. During
2024 the Committee will monitor for
any potential developments in relation
to the Ethical Standard consultation.
The Committee also noted the results
of the FRC’s review of PwC for the
2022/23 inspection cycle, and were
pleased to observe that, when
compared to the previous year,
PwC maintained their percentage
of audits graded as ‘good or limited
improvements required’ at c.80%.
The continued investment into
improvements to audit quality and
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 2023 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.
The Committee noted in particular
the challenges raised in relation to
the assessment of the Ongoing
Service Evidence provision and the
disclosures required. The Committee
also noted the discussion and
challenge to management in relation
to the Going Concern disclosures in
a year when there was considerable
complexity and change.
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 2023 audit fees. More information
on the audit fees can be found in
Note 5 to the Financial Statements.
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, as this work aligned
closely with the audit work. A copy of
the Policy on Auditor Independence
can be found on our website at
www.sjp.co.uk/shareholders/about-
us/corporate-governance and more
information on non-audit fees can
be found in Note 5 to the Financial
Statements.
Internal audit
The 2023 Internal Audit Plan (the Plan)
was approved by the Committee in
October 2022. 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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Matters considered during the year continued
The key themes addressed by the Plan are summarised below, with examples of audits undertaken:
Theme Description Example audits undertaken
Clients and
the Partnership
The Group’s processes for ensuring good
client outcomes, including implementation
of the Consumer Duty, 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.
Operational fund manager oversight processes
SJP client app IT controls
Administration of self-invested personal pensions
FCA Consumer Duty programme report
Business Assurance operations
Client transfer processes
Interactions with bereaved clients
Marketing Operations
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.
Business continuity
Security incident and event management
Testing processes
User access management
Network architecture
Data strategy approach
Payroll
Change management
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.
Regulatory returns
Third-party management and oversight
Improvements to the Appointed Representatives
Regime
Partner security mandate implementation
FUM, flows and retention reporting
Slavery and human trafficking policy
Climate transition plan development
Social media controls
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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
Committee Chair and the Chair of
the Board. The Committee Chair
Designate attended the one-to-ones
between the Committee Chair and
the Internal Audit Director from the
start of 2023, to ensure a smooth
transition on assuming the role of
Committee Chair. In addition, the
Committee Chair and other Non-
Executive Directors met with members
of the Internal Audit team during the
year to provide input into the scoping
of relevant audits.
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. In October
2023, the Committee considered and
approved the proposed 2024 Internal
Audit Plan.
The internal audit function reports
regularly to the Committee on internal
controls. This includes an annual
Internal Controls Evaluation which
draws together findings from internal
audits over the course of the year
to provide input to the Committee’s
own assessment of the effectiveness
of the internal control framework.
In its recent evaluation, Internal Audit
confirmed that its work throughout
the year continued to evidence that
the Group’s controls keep it within
the Board’s stated risk appetite.
Management has plans in place for
further enhancements to the control
framework in specific areas where
internal audit has identified that
controls require improvement,
with progress being monitored by
internal audit and the Committee.
For example, work is underway
to further enhance the controls
around oversight of third-party
fund managers and to automate
the assessments of Appointed
Representatives required by the
FCA’s Improvements to the
Appointed Representatives Regime.
Following a competitive tender
process completed in late 2021,
Deloitte LLP continues 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.
The effectiveness of the internal
audit function is externally assessed
every five years, 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 most
recent assessment, carried out
by EY in late 2019, 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, with the
exception of ongoing work to continue
to enhance the use of data analytics.
During 2023, data analytics have been
employed in many audits, including
analysis of travel and consultancy
spending and an audit of payroll.
This remains a key priority for the
team and continues to be supported
through co-source engagement.
An internal quality assessment
was carried out and presented
to the Committee in May 2023.
The Committee concluded that
internal audit is effective and meets
the needs of the Group. During 2024,
the Committee will oversee an
external effectiveness assessment
in line with the five-yearly cycle.
Internal audit processes were
updated during the year to reflect
the FCA’s Consumer Duty, in particular
emphasising the consideration within
all audits of controls to ensure the
delivery of good outcomes for
clients. The Internal Audit Charter,
which can be found on our website at
www.sjp.co.uk/about-us/corporate-
governance, was also updated to
reflect this and was reviewed and
approved by the Committee.
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, including any resulting changes
to the Group’s procedures or systems
of control, and that none of the
matters was material to the financial
position or results of the Group.
Following review and challenge
by the Committee, the Annual
Whistleblowing Report and the
whistleblowing policy were considered
by the Board in July 2023. The Board
concluded that the whistleblowing
arrangements were appropriate
and consistently in force across the
entire Group.
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Matters considered
during the year
continued
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 the systems’ operation.
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 its 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.
The Committee, in conjunction with
the Group Risk Committee, seeks
assurance that the Group operates
within a framework of prudent,
effective and proportionate controls
that facilitate the timely identification,
assessment and mitigation of risks.
The controls are designed to manage
each inherent risk down to an
acceptable level of residual risk
which is within tolerance of our
stated risk appetite, rather than
aiming to eliminate the risk altogether.
This approach allows us to recognise
that effective risk management can
also include potential benefits and
enables us to make informed
decisions within a strong control
environment, letting us develop
opportunities that result in positive
business outcomes whilst operating
within our 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.
Further, the Committee receives,
discusses and evaluates quarterly
internal control reports from the
Group Risk function on the
effectiveness of the internal
control model. 2023 saw notable
enhancements to the Group’s
strategic approach to risk
management and the internal control
environment. At the core of this is a
new risk management system which
allows for superior recording, analysis,
reporting and monitoring of risks and
controls. The Group Risk function has
also developed in-house St.-James’s-
Place-specific risk and controls
training to develop and augment
understanding and awareness for
all employees. Enhancements have
extended to an enriched RCSA
process this year, with strategic
developments including a multi-level
review and attestation across the
organisation, ensuring responsibility
and accountability are clearly
articulated and understood, with the
tone from the top setting expectations
for all divisions. An overhaul of our
risk event and incident management
processes that support our internal
control environment has commenced,
with further developments due in 2024
to ensure best practice elements and
a standardised approach is adopted
across the Group.
Internal controls were also reviewed
in 2023 as part of the Consumer Duty
workstream. Changes were made
where appropriate to ensure the
control environment evidences focus
on client outcomes and accurately
reflects the higher and clearer
standards of consumer protection
expected by the new regulation.
This work, which will continually evolve,
will continue in 2024 to ensure the
requirements are embedded together
with a review of closed book products
and their associated controls.
Throughout the year the Committee
has monitored and considered
developments to drive forward
UK corporate governance reform,
including the UK government’s
plans for legislation, and the FRC’s
consultation on updating the UK
Corporate Governance Code. The
Committee supports the intention
of both the FRC and the government
to ensure any changes to corporate
governance requirements are
proportionate, do not reduce
UK competitiveness and avoid
duplication. The Committee will
carefully consider the requirements
of the update to the Corporate
Governance Code published in
January 2024 and continue to
review management’s plans for
implementing the requirements.
We recognise the need to broaden
our internal controls testing regime
and are considering plans to how
to expand our capability.
The Committee also receives and
discusses the assessments of internal
controls from the Internal Audit
function, to support its review of
the internal control system. Actions
identified through internal audits,
compliance monitoring reviews, and
the RCSA process via internal control
updates are monitored, to ensure
suitable improvements are made.
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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 2023, fraud update reports
were 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 fraud attempts 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 saw a small number in 2023.
The Group has seen an increase in cases whereby a Partner or Partner
practice is cloned online, with the intention of deceiving clients into
making investments with profiles that adopt the genuine Partner’s
details. The following actions have been undertaken to counteract
these threats:
fraud prevention training and awareness webinars with 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
a ‘one-pager’ document to increase awareness of how to protect
themselves from a range of investment scams.
As referenced in our previous report,
Salesforce was being embedded
as the primary client relationship
management (CRM) system for
the Partnership. It is now helping to
improve the management of client
documentation and serving as the
primary source of evidence of
ongoing service provided to clients
by Partners, as well as being the key
source of information to maintain
centralised oversight. The rollout
of Salesforce has enabled the
introduction of additional controls,
enhanced monitoring, and improved
data availability and timeliness
regarding client servicing. As a result,
we are in a position to identify clients
who have not received an appropriate
ongoing service and have initiated
communications and a process to
switch off and refund ongoing advice
charges for those clients who have
not been serviced within an
acceptable period of time.
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. RCSAs
identified areas in which
management are making control
improvements. The Committee
continues to track progress on these
items throughout the year to ensure
actions are completed.
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Rosemary Hilary
Group Risk Committee
membership
Members and date joined Committee
Rosemary Hilary (Chair)
17 October 2019 and became
Chair on 19 August 2020
Emma Griffin
22 July 2020
John Hitchins
1 January 2022
Lesley-Ann Nash
16 September 2020
Note: Dominic Burke was a member
of the Committee from 1 November
2022 to 31 January 2024.
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
(the Company) and its wholly
owned subsidiaries (together
the SJP Group), which include
its regulated companies.
Regular attendees at meetings
Chair of the Board, Chief Executive
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.
Dear Shareholder,
I am pleased to present this report
to you as Chair of the Committee
and would like to take this opportunity
to thank all the members for their
contribution during the year. Simon
Jeffreys and Roger Yates ceased to be
members of the Committee following
their retirement as Directors of the
Company at the AGM in May 2023
and Dominic Burke stepped down
from the Committee and the
Company on 31 January 2024.
Throughout 2023, a key area of
the Committee’s focus was on risks
associated with changes that have
affected the Group including the
Financial Conduct Authority (FCA)’s
Consumer Duty regime, changes
to the client charging models and
continued macroeconomic and
geopolitical uncertainty. The
Committee has also considered risks
related to key areas such as delivery
of change, data, operational
resilience, management of
outsourcing and other third and
fourth parties, cyber risks and the
Group’s decision to undertake a
comprehensive review to analyse
and assess historic client servicing
records since 2018.
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The Committee has monitored
the macroeconomic situation, in
particular in relation to changing
inflation and interest rates and the
cost-of-living crisis. In light of these
challenges which impact our clients,
the Group endeavours to continue to
support them through the provision
of sound financial advice, to assist
in building their financial confidence
and resilience.
The continued economic and political
uncertainty have increased the
likelihood of clients finding themselves
in vulnerable circumstances and
therefore the Committee continued
to focus on the Group’s approach
to identifying and supporting such
clients, including through our
approach to the Consumer
Duty programme.
The Committee has also monitored
the progress made towards our
responsible business ambitions.
In particular the Committee
considered the key risk areas of
investing responsibly, climate change
and Inclusion and Diversity. More
details on our Responsible Business
Framework can be found on pages
24 to 49.
Prior to the implementation of
Consumer Duty in July 2023 the Group
conducted a rigorous assessment of
its implications for a wide range of
elements across the business. The
Committee reviewed and challenged
the Group’s approach to ensuring
compliance with the Duty and
monitored progress of the
implementation plan ahead of the
July 2023 deadline. Since then, the
Committee reviewed the compliance
of the new client charging models
and continues to monitor the
embedding of Consumer Duty
in order to identify and mitigate
any foreseeable harm for clients.
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 assess whether 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 conducted
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 continued supply chain
pressures, the conflict in Ukraine,
changes in inflation and interest
rates and volatile financial markets.
It also assisted in informing the
Group’s dividend decisions.
Focused reports from senior
executives have contributed
to the Committee’s evaluation
of the Group’s principal risks.
During the year, the Committee
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 risk management activities
should be prioritised. Specifically,
these ‘deep dives’ included strategic
risks associated with changes to
the Group’s charging model and
emerging risks relating to blackouts
due to energy shortages, artificial
intelligence, macroeconomic factors
and sustainability disclosures.
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 2024 the Committee will continue
to probe and evaluate the Group’s risk
profile to assess whether it remains
within the Board’s risk appetite, and
to monitor emerging risks to evaluate
whether the Group is ready for the
challenges which lie ahead.
Rosemary Hilary, Chair of
the Group Risk Committee
27 February 2024
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Operation and performance
of the Committee
The Committee Chair regularly meets
the CRO, the Chief Executive Officer,
the Chief Financial Officer and
individual members of the Group
Executive Committee 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 by the Board as part of the
overall assessment of its effectiveness
(see pages 104 to 105). The Board
remains satisfied that the Committee
operated effectively and that, as
a whole, the Committee members
have the experience and
qualifications necessary.
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
considered progress on and approved
the Compliance Monitoring Plan.
The Committee sought assurance
on 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 2023, the Group’s principal risks
and emerging risks evolved with the
changing regulatory, macroeconomic
and geopolitical situation. The Group
uses technology and data analytics
tools and implemented the Riskonnect
platform to support areas such as risk
reporting to ensure it operates
effectively.
Assessing risk mitigation is another
area which the Committee reviews
and challenges. Where risks
crystallise, the Committee reviews
the circumstances, root causes
and 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
74 to 84. 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
(PRA), the Financial Conduct Authority
(FCA), the Information Commissioner’s
Office, the Central Bank of Ireland,
the Monetary Authority of Singapore,
the Hong Kong Securities and Futures
Commission, the Hong Kong
Insurance Authority and the Dubai
Financial Services Authority; and
monitors progress of any actions
required.
Activities during the year
On an ongoing basis the Committee
receives regular reports on a number
of areas, including:
reporting on the Group’s principal
risk areas;
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,
including progress updates on
the implementation of and
ongoing compliance with
the Consumer Duty;
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;
the oversight of Appointed
Representatives; 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 and the
corresponding conclusions which were reached, 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 evolution of the centralised Investment Risk
Management team, which monitors investment risk-taking
across SJP’s appointed fund managers, which in turn
contributes to continued positive client outcomes.
Consumer Duty – The Committee received regular reports
monitoring the progress of the implementation plan and
scrutinised the approach taken by the Group to assess
whether the Duty’s principles had been considered
appropriately. The Consumer Duty regulation sets
significantly higher standards for consumer protection
across financial services and has required the Group to
undertake a robust and challenging review of all its client-
focused activities. The Committee has challenged risks which
could inadvertently lead to client harm to assess whether
they have been sufficiently mitigated, including levels of
consumer understanding and value of advice. Additionally,
the Committee reviewed how key elements such as value
assessments and distribution arrangements for third-party
products would be implemented and embedded.
The Committee also oversaw the implementation of
Consumer Duty for its regulated subsidiaries and reviewed
the Group’s risk management framework and risk appetite
statement to assess whether they were fully aligned with
the Duty.
Client charging models – In line with the principles of
Consumer Duty, the Committee reviewed the risks associated
with the changes that were made to the Group’s client
charging model. The Committee undertook a ‘deep dive’
review of the different elements of the changes, and the
specific consequences they could have on all stakeholders
and the affected regulated subsidiaries within the Group.
The Committee was encouraged by the increasing
capabilities of the Investment Risk Management team.
It noted how sustainability risk was assessed using
the Responsible Investment team’s in-depth analysis.
The Committee challenged how technology solutions
could assist the team to achieve their objectives and
good client outcomes.
The Committee recognised both the challenge and
opportunities presented by Consumer Duty to assess
the Group’s business model and increase focus on
achieving good client outcomes. The Committee
challenged actions that were being taken to provide
more consistent, centralised evidence for the
provision of ongoing advice provided to clients by the
Partnership, supported by the continued development
of the Salesforce CRM platform, and assessed whether
actions being taken to develop the Group’s culture
reflected the Duty’s principles. The challenges
presented by the review necessitated it to focus on
the Group’s compliance with the Duty and recognise
that certain practices would develop over time.
The Committee will continue to monitor the progress
of ongoing compliance and review conclusions from
testing whether clients are achieving good outcomes.
In challenging the proposals for changing the client
charging model, the Committee was satisfied that the
proposed model had assessed the risks associated
with it and that adequate mitigating actions were
being taken to align the proposed changes with
the principles of the Duty and achieve good
client outcomes.
Conduct
Clients in vulnerable circumstances – The Committee
reviewed the Group’s approach to supporting clients
in vulnerable circumstances. Progress included the
appointment of an SJP Vulnerability Champion who
supported the Media team to increase awareness and
education on how to recognise and support clients with
characteristics of vulnerability. Additionally, our online
resources were refreshed and made available to the
Group and its wider community.
Complaints handling – The Committee received reports on
the Group’s complaints handling operations which showed
increased complaints from clients via a claims management
company, predominantly in relation to historic ongoing
servicing. The Committee expects high standards in relation
to the provision of ongoing advice and challenged the
Group to ensure that firstly this was the case and that
secondly evidential records were able to demonstrate it.
The Committee also received reports on key data and
analysis regarding trends such as the effect of volatile
market conditions and the cost-of-living crisis.
Supervision of Partner businesses – The Committee received
an update on the risk transformation programme which
improved how risks in certain areas of the Partnership
were identified, assessed, managed and monitored.
The Committee also received an update on the oversight
and management of Partners’ non-SJP business interests.
The Committee discussed the actions being taken to
continuously develop the approach to identifying and
supporting clients in vulnerable circumstances and it
was assured that enhancements made continued to
increase awareness and assist with evolving a culture
to facilitate clients being supported in this complex
area. The Committee will monitor the enhancements
being made to capture data in respect of clients in
vulnerable circumstances.
The Committee challenged whether sufficient
resource was being made available to manage the
increasing number of complaints in a timely manner.
The working practices of the team were adapted in
response to the increased volumes and additional
resource was brought on board. However, we
recognise that increases in resource have continued
to lag behind the increases in complaint volumes. As
such, the Committee will continue in 2024 to monitor
the volume of complaints and the Group’s strategy to
manage them, including the adequacy of resource
and developing trends.
The Committee carefully scrutinised the actions
being taken to minimise and mitigate client detriment
through enhanced focus on improving the evidencing
of client servicing using the Salesforce CRM platform
and the availability of vulnerable client information.
The Committee challenged the depth and frequency
of monitoring by the Field Risk team of risks posed to
client outcomes, and was encouraged by the positive
developments to manage these. The Committee
reviewed the supervision of Partner businesses to
assess its compliance with the FCA’s Improvements
to the Appointed Representatives Regime (IARR).
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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 detailed stress
and scenario testing activity which supports the assessment
of financial resilience indicators such as liquidity and
solvency ratios for the Group and the UK and Irish insurance
entities, as well as analysis and challenge of reverse stress
testing.
Liquidity risk management – The Committee reviewed
the approach to corporate liquidity risk management for
the Group and St. James’s Place UK plc (SJPUK), including
contingency funding, which aims to avoid foreseeable
risk to clients and the Group. The Committee noted that
the assets of SJPUK remained sufficiently liquid and that
liquidity risks were closely monitored.
The Committee actively challenged the
comprehensiveness and depth of stress and scenario
tests including those relating to current topical
stresses. It 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.
Following scrutiny by the Committee, the ORSA was
developed to give early insight into the quantification
of specific material risk developments, including
the changes made to the client charging structure.
The Committee supported the Group’s approach to
liquidity risk management and contingency funding
for the Group and SJPUK.
Partner
proposition
Partner remuneration – The Committee received an update
on the Group’s approach to Partner remuneration, which
provides a consistent method for remunerating Partners
for the advice they provide and the potential risks posed
by the model. The Committee also noted how the model
is being continually developed to maintain alignment with
good client outcomes.
Technology support – The Committee received regular
reports on the high levels of adoption of cyber security
solutions which were mandated for Partner practices
by the Group, and noted the continued implementation
of Salesforce by Partner businesses.
The Committee challenged the approach used to
assess that Partners always provide and sufficiently
evidence client servicing. The Committee was
encouraged by developments being made to
strengthen controls which will provide enhanced
ability to assess that clients consistently receive value
for the advice charges they pay. The Committee also
assessed the Group’s response to situations where
evidence could not be found that clients were
receiving adequate ongoing servicing, and
challenged the remedial actions being taken to
enhance client outcomes.
The Committee closely scrutinised and challenged
the progress of the project to mandate that Partner
practices adopt the Group’s cyber security solutions.
People
The Committee received updates on people risks, which
highlighted the challenge of managing significant and
complex change across the business and the corresponding
need to focus on culture, engagement and wellbeing.
Progress had been made against the objectives to embed
the culture vision and to place increased focus on employee
engagement, wellbeing and psychological safety, including
via both face-to-face training and digital content.
Additionally, culture was being reviewed to assess whether
the Consumer Duty principles were embedded throughout
the employee lifecycle.
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 how best to align 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 recognised that further actions were
required to enhance employee culture, engagement
and wellbeing and that these included: improving
support tools; recognising high performance; and
continuing to embed a diverse and inclusive culture.
The Committee supported the actions taken to
embed measures to ensure the continued
compliance of our remuneration policies and
practices with regulatory requirements.
The CRO attended meetings of the Group
Remuneration Committee to provide a view of
risk culture 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.
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 and implementation of regulatory
changes such as Consumer Duty and IARR, and
management’s responses to them. The Committee provided
oversight of and reviewed the controls in place to assess
the Group’s compliance with its regulatory obligations.
Client money and client assets – The Committee reviewed
and approved the Client Asset Sourcebook (CASS) Annual
Report for 2022, 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 to clients is of a high
standard and supports advisers to achieve good client
outcomes. The Committee noted the developments made
in respect of providing assurance over ongoing advice and
the increased volumes of cases being reviewed.
Supervision of Appointed Representatives – In relation
to IARR, the Committee reviewed St. James’s Place Wealth
Management plc’s (SJPWM) as principal, annual Self-
Assessment report which highlighted the work conducted
to complete the new annual firm reviews.
The Committee probed and received updates on
each area and continues to monitor closely the
Group’s compliance with regulatory requirements
and the progress made against each area of
regulatory change.
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. These included the control reviews
conducted during the year which provide assurance
on continued compliance with the CASS regime.
The Committee discussed and agreed the actions
being taken to address both firm-specific and
industry-wide themes identified by regulators.
The Committee noted that the business assurance
function continued to demonstrate that it played a
valuable role in helping to assess the quality of advice
and associated documentation and the optimal
approach for higher risk products. The Committee
assessed the process to provide assurance for the
quality of documentation that supports the provision
of ongoing advice and noted that actions had been
taken to develop an automated risk-based
methodology for the selection of cases for review,
which was assisted by the utilisation of the Salesforce
CRM platform.
The Committee recommended enhancements
to the Appointed Representatives Self-Assessment
of Compliance report before it was approved by
the board of SJPWM.
Security and
resilience
Operational resilience – The Committee reviewed how the
Group’s approach to operational resilience and compliance
with the FCA and PRA requirements had progressed, including
the annual self-assessment and review of the policy and
framework which set out the processes used to assess
whether the Group remains operationally resilient.
Cyber risks – The Committee received regular updates
on cyber risks, including the changing threat levels and
corresponding mitigation actions taken to protect clients,
the Partnership and the wider Group. 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 the operation of
the policy framework and its compliance with the
regulations. The Committee receive regular assurance
on the resilience of our important business services
and important support services which confirmed that
appropriate preventative action is taken to address
any vulnerabilities identified.
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 from
ransomware attacks, artificial intelligence and
potential vulnerabilities in the supply chain.
The Committee challenged whether the
implementation timeline was ambitious enough but
was encouraged by the robustness of the approach
and the high numbers of Partner practices that were
self-accredited to CE+ or accredited through the use
of our DaaS offer.
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Risk area What did we do? What were the conclusions?
Strategy,
competition
and brand
Strategy impact – As part of the ongoing assessment
of the Group’s progress towards achieving its strategy, the
Committee reviewed the different risks faced by the business
in meeting its stated goals. In particular the Committee
conducted in-depth assessments of the changes to the
client charging model and their impact on risks affecting
the strategy. More details can be found on pages 18 to 23.
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 and ‘deep dive’
risk reviews during the year. In 2023, the reviews centred on
risks associated with artificial intelligence, energy ‘blackouts’
and environmental, social and governance (ESG) disclosures.
Responsible business – The Committee received an update
on the Group’s progress towards its responsible business
ambitions and reviewed the risks associated with the plan
to achieve this strategic priority. The Committee noted the
increasing importance of incorporating climate risks into
wider business objectives.
The Committee was reassured by the actions and
developments evidenced to mitigate the identified
risks to delivering the strategy, which included the
changes to the client charging model.
The Committee was satisfied that emerging risks
had been appropriately identified and were being
monitored and managed accordingly. Reporting
of these risks continues to be enhanced to facilitate
rigorous debate on the potential implications for
the Group. Appropriate time is set aside to allow
consideration and challenge of emerging risks,
including ‘deep dives’ and updates on specific
areas such as artificial intelligence.
The Committee scrutinised the approach being
taken in relation to climate transition planning
and the heightened expectations in respect of
both gender and ethnic diversity in the workforce.
Third parties
Administration performance – The Committee reviewed the
risks to the provision of administration services to Partners
and clients. It was reported that the overall risk environment
remained stable and focus would be on further digitising
administration processes and enhancing the service
provided to clients and Partners by our third-party
administrators and centres to ensure the risk remained
at an acceptable level.
Outsourcing – The Committee received an update on the
Group’s outsourcer and supplier management approach
including how the outsourcer and supplier management
policy had been embedded to maintain continued
compliance with the regulations regarding oversight of
outsourcing.
The Committee also reviewed the Group’s arrangements for
managing cyber security risk across its material outsourcers,
and the third and fourth parties to whom they sub-contract.
The Committee was satisfied that the risks affecting
the administration service provided to Partners
and other stakeholders were being managed
appropriately, including enhancements to
governance and oversight and reductions in
the average time taken to close incidents.
The Committee was provided with regular reporting
which included information on outsourcing and
supplier management developments. The Committee
was encouraged by the progress made with
developing data collection processes and a
management database to provide a single source for
that data. 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 the long-term success of the Group, its clients and the wider SJP community.
Particular emphasis will be placed on monitoring compliance with the Consumer Duty principles and assessing how
they are embedded into culture throughout the SJP community to ensure the Group consistently delivers positive client
outcomes. Further areas of focus will include monitoring the programme to deliver the changes to charging structures
announced in October 2023, continuing to assess the risk impact of the Group’s decision to undertake a comprehensive
review to analyse and assess historic client servicing records since 2018, assessing the adequacy of our response to
emerging risks and the actions taken to ensure ongoing operational resilience and the Group’s oversight of Appointed
Representatives. 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 and services continue to meet the needs of clients and the Partnership.
Key matters considered during the year continued
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Paul Manduca
Group Nomination and
Governance Committee
membership
Members and date joined Committee
Paul Manduca (Chair)
1 January 2021
Emma Griffin
18 May 2023
Rosemary Hilary
22 July 2020
John Hitchins
18 May 2023
Note: Dominic Burke was a member
of the Committee from 18 May 2023
to 31 January 2024.
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, knowledge,
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, knowledge and experience
to direct the Group in the successful
execution of its strategy.
Regular attendees at meetings
Chief Executive Officer, Company
Secretary and representatives
of external consultants.
Dear Shareholder,
During 2023 we saw further changes
to the membership of the Board,
starting with the planned retirements
of Simon Jeffreys and Roger Yates.
The Committee was also made aware
of Andrew Croft’s intention to retire
from his position as Chief Executive
Officer and, in line with succession
plans, it worked with Russell Reynolds
Associates to successfully identify
and appoint Mark FitzPatrick as his
successor. The Committee also
commenced the search for a new
Senior Independent Director, ahead
of Dominic Burke’s stepping down on
31 January 2024. It is still early days for
Mark, but the Committee will be keen
to hear his thoughts around executive
succession planning and key roles in
due course.
As the governance landscape evolves,
so do the role and make-up of boards
and committees. Many of the key
attributes of a successful board
have remained unchanged but
organisations are increasingly
recognising the challenges associated
with having to balance the need for
depth of experience with access to
specialist knowledge in a growing
number of areas. Organisations have
also become acutely aware of the
value of diversity in every sense and
this adds yet a further lens. Alongside
diversity, there has been greater
emphasis placed on independence
and all of these factors point to the
importance of having robust and
continuous succession plans.
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Whilst the Board as a whole has a
keen interest in Inclusion and Diversity
(I&D), the Committee continues to be
a focal point for monitoring progress
and considering policy change.
During the year we reviewed the
Group’s Inclusion and Diversity Policy
and our own Board Diversity Policy
and continued to monitor progress
against our I&D strategy and stated
public commitments. For the first time
this year we are reporting against the
new Listing Rules relating to board
diversity, and this information can
be found on page 128.
Alongside the Committee’s
‘nomination’ responsibilities sits its
oversight of governance across the
Group. Building on the work that the
Committee has overseen in recent
years, a comprehensive review of
the Group’s governance framework
was carried out in 2023, focusing
in particular on governance at
subsidiary level. Changes that
have been agreed by the Committee
include strengthening the body of
independent Non-executive Directors
on subsidiaries, whilst also looking to
leverage the expertise around the plc
Board table by increasing the overall
non-executive presence on
subsidiary boards.
Although we were not required to
carry out an externally facilitated
Board evaluation in 2023, having
last had one in 2021, we 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 90 to 105.
I look forward to reporting on further
progress as we continue our work
in 2024.
Paul Manduca, On behalf of the
Group Nomination and Governance
Committee
27 February 2024
Activities during the year
Topic Summary of activity Find out more
Board
composition
The Committee remained focused on the
longer-term succession planning for Non-
executive Directors but also took action to
address the impact of unforeseen changes.
See
overleaf
Committee
and
subsidiary
board
compositions
The composition of the Board’s principal
committees and subsidiaries is kept under
regular review and changes were made
during the year to ensure an appropriate
balance of membership.
See
overleaf
Management
succession
The Committee identified and recommended
to the Board the appointment of Mark
FitzPatrick as Andrew Croft’s successor as
Chief Executive Officer. The Committee
continues to monitor the plans for members
of the Group Executive Committee and
key personnel.
See
overleaf
Inclusion and
diversity
The Committee continued to assess the
progress made against the I&D strategy and
SJP’s commitments. The Board Diversity Policy
and the Group’s Inclusion and Diversity Policy
have also been reviewed.
See page
127
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
2022 Board effectiveness review and agreed
the scope of the 2023 exercise.
See pages
128 and 104
to 105
Operation and performance
of the Committee
During 2023 the Committee comprised
the Chair of the Board and four
independent Non-executive Directors,
who between them were 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 in 2023
and following the departure of Simon
Jeffreys and Roger Yates at the AGM in
May, Dominic Burke, Emma Griffin and
John Hitchins joined the Committee.
The Committee’s effectiveness was
considered as part of the Board’s
overall assessment of its effectiveness
(see pages 104 to 105). The Board
remains satisfied that, as a whole,
the Committee has the experience
and qualifications necessary.
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 were the last
of these Directors and stepped down
from their Board positions at the
conclusion of the AGM in 2023.
Following their departures, the
Committee recommended that
Dominic Burke be appointed as
the Senior Independent Director,
alongside changes to the chairs
and composition of the Board’s
committees. When making these
recommendations, the Committee
noted the responsibilities attaching
to each role and ensured that those
put forward had the necessary
experience to fulfil the roles effectively.
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Longer-term succession planning is
an ongoing exercise and remains at
the forefront of the Committee’s
consciousness and activities, but it
also has a key role to play when
unforeseen events result in changes
to the Board. In November 2023 we
announced that, following only a short
time with SJP, Dominic Burke would
step down from the Board. A change
in Dominic’s circumstances meant
that he would no longer be able to
commit the time required to the Board
of St. James’s Place plc and the
Committee was required to
accelerate existing plans to recruit
further Directors and begin the search
for a new Senior Independent Director.
We remain comfortable that the size,
structure and composition of the
Board is appropriate but we also
recognise that the demands on
boards have increased, especially in
the financial services sector. Against
this backdrop it is important that
boards are able to absorb unplanned
changes and we will continue to
monitor the make-up and workload
of the Board, addressing any potential
gaps we identify.
Executive succession
The selection of a new Chief Executive
Officer or Chair is amongst the most
significant responsibilities of a
nomination committee and this is no
different at SJP. When the Committee
began to prepare for the search for
Andrew Croft’s successor as Chief
Executive Officer, the Committee
chose to appoint Russell Reynolds
Associates (RRA). RRA is a sponsor of
the 30% Club and is accredited in the
FTSE 350 of the Enhanced Voluntary
Code of Conduct for Executive Search
Firms. RRA provided the Committee
with access to the networks and
expertise required to establish the
appropriate success criteria and then
identify and evaluate internal and
external candidates for the role. Once
the success criteria had been
approved by the Committee, RRA
undertook research and presented to
the Committee a long-list of external
candidates to consider alongside
internal candidates. The long-list was
refined and the remaining candidates
were assessed by RRA against the
success profile, involving
psychometric testing where
appropriate. From the short-list of
candidates, Mark FitzPatrick was
identified by the Committee as the
outstanding candidate and, as a
result of the Chair’s past relationship
with Mark, it was agreed that Dominic
Burke in his capacity as Senior
Independent Director should take
a prominent role in the interview
process. Mark met all members of
the Committee, as well as the other
Directors on the Board, and the
Committee agreed that Mark
FitzPatrick was the preferred
candidate to succeed Andrew Croft.
Mark joined the Board on 1 October
2023 and, following receipt of
the requisite regulatory approvals,
succeeded Andrew as Chief Executive
Officer on 1 December 2023.
When making their recommendation,
the Committee recognised the value
that a fresh perspective could bring,
but also was extremely mindful of the
importance of retaining aspects of
our culture that have been so integral
to our success. The Committee
remains clear that having the right
people is critical to our long-term
success and will continue to support
Mark and his team to enable them
to identify talent and manage
succession, enabling the business
to attract, develop and retain the
right people.
Group governance
The complexity of governance within
the financial services sector has
increased significantly in recent years,
not least as a result of developments
in regulation and an increase in the
demands of other stakeholders
(e.g. for additional reporting). This has
inevitably led to the establishment of
a number of procedures and other
mechanisms that make up a group’s
governance operating model. It is not
unusual for the evolution of these
models to lack the cohesion and
organisation that provide boards,
executives and employees with the
consistent guidance and incentives
they require, particularly when, like SJP,
the business has grown rapidly. The
right governance operating model
has the potential to enhance
management’s ability to implement
strategy and a board’s ability to
exercise proper oversight.
In 2023 we took the opportunity to step
back and review both our corporate
structure and the governance
framework that underpins it. The
Committee plays an important role
in overseeing governance, particularly
as it applies to our regulated
subsidiaries, and has considered and
recommended to the Board changes
aimed at ensuring our approach to
governance remains right-sized,
effective and efficient for the future
of SJP. One key area has been the
balance between independent and
executive directors, where we have
chosen to reinforce the capacity for
independent challenge by appointing
independent chairs and increasing
the non-executive presence on
subsidiary boards. One such
example is our UK-based unit
trust management company,
St. James’s Place Unit Trust Group
Limited, where the Committee
oversaw the appointment of an
independent chair to work alongside
the existing non-executives on its
board. The revisions to the governance
framework and corporate structure
will take time to complete and the
Committee will continue to
oversee progress.
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, they must form part
of our formal plans. During 2023 the
Committee reviewed 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
continues to be a challenge
throughout the financial services
sector, and whilst we are seeing
progress against our stated targets
and evidence that a commitment to
diversity is embedded in our culture,
we remain focused on how we can
achieve the progress we desire. In
2023, 48.3% of all senior hires were
female and the total proportion of
women in senior roles increased
to 34.4%.
Also during 2023, 16.4% of external hires
identified as minority ethnic, which
has resulted in the total proportion of
minority ethnic employees increasing
to 8.2%. Whilst this means we were
slightly below our target of 10%
minority ethnic representation by
2023, we are still encouraged by
our progress and know that these
incremental changes are important
steps in the right direction. Our latest
Pay Gap Report is available on our
website at www.sjp.co.uk, while
further information on how the
Inclusion and Diversity policy has
been implemented can be found
in the responsible business section
of the Strategic Report on pages
24 to 49.
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The Board diversity policy sets out our own approach and commitment to
diversity at board level. It applies to the Board of the Company, but also recognises
the implications more widely for the Board’s committees and material
subsidiaries whose compositions are reflective of the make up of the Board
and the organisation as a whole. The Board’s commitment can be seen in the
Committee’s terms of reference and forms an important part of the Board’s
succession plans and the process for recruiting new Directors. The Board continues
to meet the Listing Rule LR9.8.6 (9)(a) (iii) requirement for at least one of its members
to be from an ethnic minority. Whilst the percentage of women on the Board
began the year at 30%, the Board knew this was a temporary position, and the
percentage increased to 37.5% when both Simon Jeffreys and Roger Yates
stepped down after the AGM in May 2023. This means that the Company did
not meet the 40% target in Listing Rule LR9.8.6R (9)(a)(i) at 31 December 2023,
although when Dominic Burke stepped down on 31 January 2024 the percentage
increased to 42.9%. The size of our current 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.
As mentioned above, we are actively searching for a Senior Independent Director,
but there are no short-term plans to replace the Chair, Chief Executive Officer or
Chief Financial Officer, all of which roles are currently occupied by men. This means
we did not comply with Listing Rule LR9.8.6R (9)(a)(ii) at 31 December 2023. However,
the chair of the Group Risk Committee, chair of the Group Remuneration Committee
and nominated Non-executive Director for Workforce Engagement are all
women and the Board views 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 those in other sectors, as demonstrated by the
level of scrutiny and focus it receives from the financial services regulators. The
information required under Listing Rule LR9.8.6R (10) and (11) can be found below.
# of Board
members
% of the
Board
# of senior positions
on the Board (CEO,
CFO, SID & Chair)
# in executive
management
% of executive
management
Men 5 62.5% 4 6 75.0%
Women 3 37.5% 0 1 12.5%
Not specified/
prefer not to say 0 0.0% 0 1 12.5%
Total population 8 100.0% 4 8 100.0%
# of Board
members
% of the
Board
# of senior positions
on the Board (CEO,
CFO, SID & Chair)
# in executive
management
% of executive
management
White British
or other White
(including minority-
white groups) 7 87.5% 4 7 87.5%
Mixed/multiple
ethnic groups 1 12.5% 0 0 0.0%
Asian/Asian British 0 0% 0 0 0.0%
Black/African/
Caribbean/
Black British 0 0% 0 0 0.0%
Other ethnic group,
including Arab 0 0% 0 0 0.0%
Not specified/
prefer not to say 0 0% 0 1 12.5%
Total Population 8 100% 4 8 100.0%
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 they 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 2024 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.
In 2023, Independent Audit was
asked to review the role of the Board
and the effectiveness of individual
committees. Rather than using a
questionnaire as in 2022, Independent
Audit conducted more targeted
interviews with all Board members.
The review of the Board focused
on how the role of the Board
was understood throughout the
organisation and how it could
best add value. It also focused
on the effectiveness of the
committee structure.
The Committee has monitored
progress against the actions that
arose from the 2022 Board
effectiveness review during 2023
and is satisfied that they have been
addressed. Further details of the
progress made and the 2023 review
are set out on pages 104 to 105.
For details on the training and
development provided to Directors
(including induction programmes)
please see pages 94 and 103.
Data on the diversity of the individuals on the Board and Group Executive Committee as at 31 December 2023 as required by Listing Rule 9.8.6R(10) is
set out above. Data is collected from Group Executive Committee members through our voluntary employee diversity survey and from other Board
members by self-disclosure directly from the individuals concerned.
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Group Remuneration Committee
membership
Member and date joined Committee
Emma Griffin (Chair)
22 July 2020
Lesley-Ann Nash
1 January 2022
Rosemary Hilary
1 August 2022
Note: Dominic Burke was a member
of the Committee from 18 May 2023
to 31 January 2024.
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,
the Chair of the Board 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
Officer, Chief Financial Officer,
Chief Risk Officer and People
Director.
Emma Griffin
Dear Shareholder,
On behalf of the Committee, I am
pleased to present the Directors’
Remuneration Report for 2023
(the Remuneration Report).
The Remuneration Report is in
three sections:
Committee Chair’s annual
statement;
Annual Report on Remuneration
for 2023, including an ‘at a glance’
summary; and
Summary of the Directors’
Remuneration Policy for the
2023-25 period.
The sections are set out in
accordance with the UK Directors’
Remuneration Report Regulations
2013, as amended in 2018 and 2019.
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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Introduction
This is my first report as Chair of the
Group Remuneration Committee,
following my appointment to the role in
May 2023. On behalf of the Committee,
I would like to like to thank my
predecessor, Roger Yates, for his many
years’ service as Committee Chair.
2023 has been a challenging year
for the Company, as fully explained
in other parts of the Annual Report
and Accounts. The Committee’s
approach has been to align incentive
plan outcomes for executives with
Company performance, and this can
be clearly seen from the information
set out in this report for 2023. Among
the Executives there have been strong
personal contributions and
achievements in many performance
areas. However, recognising the overall
performance of the Company and
that of the share price in 2023, the
impact on our shareholders and
other stakeholders, the Committee
has used its discretion to substantially
reduce annual bonus award outcomes
for executives from the calculated
outcomes according to the bonus
targets and to reduce the 2024
PSP grants. Further details are
provided below.
Directors’ Remuneration
Policy (the Policy)
The Policy was approved in the
triennial vote at the 2023 AGM with
97.35% of votes in favour, following
an extensive consultation with major
shareholders. The Policy approved
in 2023 contained modifications
compared to the previous Policy,
including refinements of the metrics
and weightings in the incentive plans,
a further strengthening of the
requirement for Executive Directors
to retain shares after leaving service,
and reduced pension allowances for
Executive Directors. There was also
an increase in the maximum that
Executive Directors could receive in
performance-related annual bonus, to
align this with market norms – but this
change is phased in over two years,
and any bonus award continues to
depend on performance outcomes.
We applied this Policy during 2023 and
are not seeking to make any changes
to the Policy at the 2024 AGM.
Shareholder consultation
following the 2023 AGM
The Directors’ Remuneration Report for
2022 received 77.85% of votes in favour
at the 2023 AGM. Although more than
three-quarters of votes had been cast
in favour, the Committee undertook
a further consultation after the AGM
to understand the reasons for votes
against. The primary reason was that
the Committee had decided not to
apply a downward adjustment to the
long-term Performance Share Plan
(PSP) award that was granted in 2020
and vested in 2023. The Committee
had permitted the award to vest to
the extent of the performance
achieved. Some shareholders
felt that the performance-based
outcome should have been further
reduced, as share prices in 2020
had been depressed due to COVID-19
causing more shares to be granted for
the same percentage of base salary.
We had provided an explanation
in the Remuneration Report of the
reasons for not applying a downward
adjustment, including that the
Committee had already exercised
discretion to award zero annual
bonuses across the Company for
2020 despite a resilient performance
in that year, and had also capped the
2020 PSP grants 20% below the level
approved in the 2020 Policy vote.
The Committee is grateful for
the feedback received from those
shareholders who responded to the
consultation. This has been further
considered in the approach to grants
in 2024 and further explanation is
provided later in this statement
and report.
Annual bonus outcomes for 2023
Annual bonus for 2023 was based on
a combination of financial criteria
(60% weighting) and strategic criteria
(40% weighting). As set out in the Policy,
the maximum annual bonus for 2023
was 175% of base salary. The financial
metrics were underlying Cash Result
profits, net funds flow and controllable
expenses. Strategic criteria covered
six elements including key
performance indicators relating to
investment proposition for clients,
client service, colleague engagement,
brand and reputation, and
environmental performance.
The Committee undertook a
robust assessment against all
the performance criteria, and then
considered the wider performance
of the Company for 2023.
As explained in other parts of the
Annual Report and Accounts, the
financial performance of the Company
was resilient. Positive net fund flows
and underlying Cash Result profits
were both close to the level required
for a bonus award. Performance in
managing controllable expenses was
at the upper end of the performance
range which could have resulted in
a pay-out of 40% of the financial
element. However, the Committee
determined that downward discretion
should be applied to the financial
component of the bonus, recognising
that the significant costs associated
with the management of increased
client complaints were incurred
during the year, and therefore the
Committee agreed that zero bonus
should be payable to executives for
that component.
The Committee assessed performance
for the strategic criteria taking into
account views of the Chief Executive
Officer, the Committee members and
the Committee’s remuneration adviser
and determined that a total of 39%
percent of salary had been earned
for this element, out of a maximum
70% of salary. The Committee also
considered the personal performance
of each Executive Director and the
degree of overall accountability that
accompanies their respective roles, in
exercising its final overriding discretion.
This resulted in the Chief Financial
Officer being eligible for a total annual
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Report of the Group Remuneration Committee continued
Section 1
Chair’s annual statement (unaudited)
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bonus award for 2023 of 22.3% of
maximum, which is 39% of base salary.
The pro-rata award for Andrew Croft,
for his 11 months as Chief Executive
Officer, was assessed to be zero,
taking account of the significant
over-arching responsibility for
company performance that goes
with the Chief Executive Officer role.
The new Chief Executive Officer, Mark
FitzPatrick was not eligible to receive
an annual bonus for 2023 in line with
the Company’s bonus scheme
eligibility rules, as he was new in role.
Performance Share Plan (PSP)
outcome for 2021-2023
The PSP awards granted in 2021
reached the end of their three-year
performance period in 2023. The
performance metrics for these
awards were earnings per share
growth and relative total shareholder
return against a peer group of
companies in the FTSE 350. The
performance outcomes on these
metrics were below the threshold
vesting level. The total vesting
outcome was zero, which further
reinforces the alignment of executives
with the outcomes for shareholders.
Change of Chief Executive Officer
Andrew Croft stepped down as
Chief Executive Officer effective
30 November 2023, after more than
30 years’ service to the Company,
including 13 years as its Chief Financial
Officer and nearly 6 years as Chief
Executive Officer. Mr Croft is eligible for
base salary and contractual benefits
for the remainder of his notice period
that expires 13 September 2024,
12 months from the announcement
that he was to step down. Mr Croft
remained eligible for an annual
bonus for 2023 pro rated for the
period he was a member of the
Board and subject to the performance
conditions; as explained above,
the Committee determined that the
bonus award for 2023 should be zero.
He is not eligible for an annual bonus
in respect of the financial year ending
31 December 2024. Mr Croft retained
his deferred bonuses earned in
respect of previous financial years,
vesting at the normal three year
vesting dates, and his PSP awards
from prior years, subject to time
pro-rating and performance, with
vesting dates unchanged and also
subject to the normal two year
post-vesting holding period. He is
required to retain a shareholding
in the Company of 300% of his base
salary for two years post cessation.
Malus and clawback provisions
continue to apply to all awards
under the relevant plans.
Mark FitzPatrick was appointed Chief
Executive Officer effective 1 December
2023, having been Chief Executive
Officer Designate from 1 October 2023.
Mr FitzPatrick was previously interim
group chief executive officer for
Prudential plc, and his total
remuneration package with SJP has
been set more than 20% below the
level in his previous role. His base
salary with SJP was set at £840,000,
which, although higher than Andrew
Croft’s base salary, was lower than
the base salary Mr FitzPatrick received
at Prudential, and is appropriate for
a company of the size and scope of
St. James’s Place. It is also important
to note that the Committee reported
to shareholders in last year’s
Remuneration Report that there
could be a need to re-position the
base salary for the SJP Chief Executive
Officer role, as it was materially below
benchmark levels. Mr FitzPatrick’s
pension level is 10% of base salary
in line with other new joiners to the
Company. His maximum annual
bonus is set at 200% of base salary
for 2024, and his maximum PSP grant
is 250% of base salary, both in line with
the approved Policy. Mr FitzPatrick also
received PSP awards over SJP shares
with a value of £644,163 to replace
the portion of awards he held at
Prudential that he forfeited in order to
take up his role with SJP on 1 October
2023. These replacement awards are
subject to performance conditions
and vest in 2024 and 2025, in line
with the vesting dates of the awards
he forfeited.
Other Board changes
Roger Yates and Simon Jeffreys retired
from the Board on 18 May 2023 having
both served as Directors for nine years,
and Dominic Burke stepped down
from the Board on 31 January 2024.
Salary reviews for 2024
The Committee has reviewed base
salaries for Executive Directors for
2024 and determined that the Chief
Financial Officer’s base salary should
be increased by 4% at the 1 March
2024 review date, which is below
the average 5% increase for SJP
employees overall. The Committee
also determined that the Chief
Executive Officer’s base salary
should remain unchanged at this
2024 review date.
Annual bonus metrics for 2024
The new Chief Executive Officer, Mark
FitzPatrick, has been undertaking with
the Board a review of the priorities for
the business for 2024 and beyond.
This has an important bearing on the
selection of performance metrics for
the annual bonus for 2024, and the
Committee has been considering
these. The key principles for selecting
performance metrics, as set out in
the Policy, remain, a twin emphasis
on robust financial performance
and on strategic goals. As in previous
years, at least 50% of any annual
bonus award for Executive Directors
will be deferred into shares. The full
set of metrics, targets and outcomes
will be reported to shareholders in the
Remuneration Report for 2024, in the
usual way. The financial metrics will
make up 60% of the annual bonus
and will be unchanged from 2023,
with suitable targets taking account
of the 2024 business plan. The
non-financial element of the annual
bonus will be split between Strategic
targets (20% of maximum bonus)
and individual performance criteria
(20% of the maximum bonus).
PSP grants in 2024
We have also considered the metrics
for the 2024 grants of the PSP, taking
account of the Board’s review of
business priorities for the next one
to three years. This has included
considering the choice of financial
metrics, the weighting on relative TSR,
and whether environmental, social
and governance (ESG) targets should
form a part of the scorecard. We have
concluded that the metrics for the
2024 grant should remain unchanged,
including one third based on relative
TSR and two thirds based on EPS. We
will consider potential changes to
metrics prior to the 2025 grant once
the new Chief Executive Officer’s
strategy review is concluded.
The Committee has also considered
whether grant sizes in 2024 should be
reduced, considering the significant
fall in the share price since the last
round of grants. Executives have,
like other shareholders, already
experienced substantial reductions
in the value of shares, deferred bonus
share awards and PSP awards they
hold, and there has been zero vesting
in 2024 of 2021 PSP awards. However,
mindful of the views of shareholders
on this issue, the Committee will
reduce the 2024 PSP grant for the
Chief Financial Officer to 215% of
base salary, from 250% of base
salary in 2023, a 35 percentage
points reduction.
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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.
A summary of the Policy can
be found on pages 154 to 157.
Mark FitzPatrick is new in role, effective
1 December 2023, and therefore did
not receive a PSP grant in 2023 and
has not been in post over the period
when the share price declined. It is
also important that he be given an
appropriate award to align him with
the future success and share price
growth of the Company in the
2024-2026 period. The Committee
therefore decided that he should
receive an award of 250% of base
salary, as permitted in the Policy.
Vesting of these awards will be
subject to demanding performance
conditions and the Committee also
retains additional discretion to make
downwards adjustment at vesting
should this be considered
appropriate.
Malus and clawback
SJP has a clear malus and clawback
policy applying to Executive Directors
and other identified roles under the
relevant Financial Conduct Authority
(FCA) Remuneration Codes. The
Committee regularly reviews whether
there is a case for the application of
malus or clawback to any previous
awards under the annual bonus or
PSP, taking input from the Group Risk
Committee of the Board, and an
incentives committee constituted
from the heads of relevant
independent control functions.
Board Chair fee, and Non-
executive Director fees for 2024
The Committee reviewed the Board
Chair fee level. The current fee has
been unchanged at £375,000 since
Paul Manduca was appointed in 2021.
The Committee considered the time
commitment and complexity of the
role, which has grown since Paul
Manduca was first appointed. We also
assessed the market benchmark data
for comparable chair roles in financial
services companies; the benchmarking
indicated that SJP’s fee level was below
the median for similar companies.
The Committee decided to increase
the fee to £400,000 effective 1 January
2024. The fee level will be reviewed
again from 1 January 2025.
The Board (excluding Non-executive
Directors) reviewed the Non-executive
Director fee rates and concluded that
a modest increase of 1% should be
applied to the base fee, but more
significant increases should be
applied to the Committee Chair and
Committee member fees to reflect
time commitment and market
benchmarks in similar financial
services companies.
Diversity and pay gaps
The Board monitors the gender and
ethnic diversity amongst employees.
We have achieved 30% female
representation in senior management
roles in 2023 and we are also working
towards at least 10% minority ethnic
representation in our UK employee
population. We also track the total
gender pay gap, which is an
indication of whether we are moving
closer to a broadly equal number
of men and women at each job level
in the Company. Over the six years
since 2017, we have made substantial
progress on this: the median and
mean hourly pay gaps have reduced
by 13 and 12.9 percentage points
respectively over that time.
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 session
held during 2023 which discussed
the proposed changes to the Policy
and took account of the views of the
Workforce Engagement Panel before
the proposals were finalised, which
I and Roger Yates also attended.
Another remuneration session will
be held in 2024 which will discuss
the Policy and practice for Executive
Directors and how the underlying
principles and structure align to
the wider employee workforce.
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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 FCA Remuneration Codes that apply to regulated subsidiaries within the Group.
The Committee considers that our Remuneration Policy effectively addresses the following principles set out in the Code:
Factors Approach taken in Remuneration Policy
Clarity
Our 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 Executive 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 remuneration. The actual
outcomes depend on the performance achieved against the specific performance metrics.
Proportionality
The 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
that 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 these include elements specifically aligning with cultural indicators.
Conclusion
Remuneration outcomes for 2023 reflect the Committee’s robust approach to performance assessment – with
total remuneration substantially lower than for 2022. We align Executive Directors with the long-term interests of our
shareholders: over 75% of the total remuneration package is ‘at risk’ by being subject to performance criteria. Shares
constitute around 60% of the total package, through deferral of bonus over three years and PSP awards that are subject to
a total five-year vesting and holding period. This closely aligns Executive Directors with sustained share price performance.
I thank shareholders who assisted the Committee in the consultation process following the AGM, and I continue to very
much welcome constructive feedback on the Committee’s Remuneration Report.
I encourage you to vote for the Directors’ Remuneration Report for 2023.
Emma Griffin
On behalf of the Group Remuneration Committee
27 February 2024
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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 single total figure of remuneration for 2023 and 2022 for the Executive Directors.
Andrew Croft,
Chief Executive Officer
1
£’000
2022
2023
754
0 696
2,361 3,141
696
Fixed VariableVariable
2023 2022
Base salary 563,862 587,161
Benefits 47,104 49,705
Pension 84,579 117,432
Other – 176
Annual bonus
(cash)
3
– 339,379
Annual bonus
(deferred)
3
– 339,379
Total 695,545 1,433,232
PSP vested
4
– 1,682,174
Mark FitzPatrick,
Chief Executive Officer
2
£’000
2022
Fixed VariableVariable
2023
257
N/A
257
2023 2022
Base salary 210,000 –
Benefits 26,469 –
Pension 21,000 –
Other – –
Annual bonus
(cash)
3
– –
Annual bonus
(deferred)
3
– –
Total 257,469 –
PSP vested
4
– –
Craig Gentle,
Chief Financial Officer
£’000
2022
2023
549
174 798
1,707 2,256
624
Fixed VariableVariable
2023 2022
Base salary 445,104 424,561
Benefits 112,146 39,397
Pension 66,766 84,912
Other 179 –
Annual bonus
(cash)
3
86,816 245,396
Annual bonus
(deferred)
3
86,816 245,396
Total 797,827 1,039,662
PSP vested
4
– 1,216,326
1 Andrew Croft stepped down as Chief Executive Officer and from the Board on 30 November 2023. The figures shown are his remuneration
for services as a Director.
2 Mark FitzPatrick was appointed as Chief Executive Officer Designate and to the Board on 1 October 2023 and became Chief Executive Officer
on 1 December 2023.
3 The annual bonus awards are in respect of performance during the years ending 2022 and 2023 respectively.
4 The value of the PSP vested corresponds to the long-term incentives in the Total remuneration table on page 135.
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 2023
(max 175% of
base salary)
Underlying cash result 10% 0.0 0%
Net funds under management flows 20% 0.0 0%
Annual growth in controllable expenses 20% 24.0 42%
Strategic and operational KPIs 50% 22.3 39%
Total calculated payout before exercise of discretion 100% 46.3 81%
Total bonus award after exercise of discretion: Andrew Croft 0.0 0%
Total bonus award after exercise of discretion: Craig Gentle 22.3 39%
PSP (2021 award)
(max 200% of
base salary)
1
Relative TSR 33.3% 0.0 0%
Average annual adjusted earnings per share (EPS) growth
in excess of RPI
2
66.7% 0.0 0%
Total PSP opportunity 100% 0.0 0%
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 European Embedded Value (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.
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Remuneration
5
Report of the Group Remuneration Committee continued
Section 2
Remuneration at a glance and annual report on 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 2024 AGM. This part of the Remuneration Report explains the work of the Remuneration Committee and sets
out how we implemented our Policy during 2023. The information on pages 134 to 153 has been audited where indicated.
This part also sets out how we intend to implement the Directors’ Remuneration Policy in 2024. A summary of the Policy
is set out on pages 154 to 157.
2.1 How the Remuneration Policy was applied in 2023
2.1.1 Remuneration payable in respect of performance in 2023 (audited)
Summary of total remuneration
The remuneration received by Executive Directors in respect of the years ended 31 December 2023 and 2022 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 2023 563,862 47,104 – – 84,579 – 695,545 695,545 –
2022 587,161 49,705 678,758 1,682,174 117,432 176 3,115,406 754,298 2,361,108
Mark FitzPatrick 2023 210,000 26,469 – – 21,000 – 257,469 257,469 –
2022 – – – – – – – – –
Craig Gentle 2023 445,104 112,146 173,632 – 66,766 179 797,827 624,017 173,811
2022 424,561 39,397 490,792 1,216,326 84,912 – 2,255,988 548,870 1,707,118
The remuneration received by Non-executive Directors in respect of the years ended 31 December 2023 and 2022 is set
out below.
Non-executive Director
Fees Benefits Total
£ £ £
Dominic Burke
1
2023 147,109 – 147,109
2022 21,208 – 21,208
Emma Griffin 2023 139,363 10,617 149,980
2022 124,125 6,584 130,709
Rosemary Hilary 2023 159,252 419 159,671
2022 154,021 – 154,021
John Hitchins 2023 142,472 118 142,590
2022 122,042 – 122,042
Simon Jeffreys
2
2023 105,743 1,683 107,426
2022 181,537 1,699 183,236
Paul Manduca 2023 375,000 2,880 377,880
2022 375,000 4,784 379,784
Lesley-Ann Nash 2023 111,996 113 112,109
2022 111,000 85 111,085
Roger Yates
2
2023 66,516 – 66,516
2022 167,042 534 167,576
1 Dominic Burke was appointed to the Board on 1 November 2022 and stepped down on 31 January 2024.
2 Simon Jeffreys and Roger Yates retired from the Board on 18 May 2023.
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2.1.1 Remuneration payable in respect of performance in 2023 (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 Craig Gentle, they also
include a location allowance of £72,000 per
annum, to allow him to work increased
amounts of time in SJP’s London office away
from his normal place of work at SJP’s
Cirencester office (2022: Nil). 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.
Non-executive Directors are not paid a
pension and do not participate in any of
the Company’s variable incentive schemes.
Pension allowance
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
allowances 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 155, 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.
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 vesting from 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,
to the vested shares. The long-term incentive
values for 2023 are £0 for all Executive
Directors. For Andrew Croft and Craig Gentle,
this is due to the performance conditions
not being met for the PSP award granted on
25 March 2021. These awards will lapse in full
and no shares will vest and for Mark FitzPatrick
it is because he has not been granted any LTIP
awards yet. The figures for 2022 have been
updated from the three-month average
figures used in last year’s report (being
£1,814,958 for Andrew Croft and £1,312,337 for
Craig Gentle) to the Company’s share price
on the date of vesting on 27 March 2023,
being £11.80.
The LTIP figure for 2022 in the table on the
previous page includes the following: £642,858
for Andrew Croft and £464,833 for Craig Gentle,
which are attributable to the movement in the
share price between the grant date and the
date of vesting. This amounts to 35.42% of
the vesting amount shown in the table for
Andrew Croft 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 Craig Gentle, 15 matching shares were
awarded on 24 March 2023 at £11.93 per share.
Employees making contributions to the Save
As You Earn scheme receive a 20% discount
on shares under option. None of the Directors
started a savings contract in 2023.
Subsidiary board fees
Emma Griffin received £29,688 for chairing
St. James’s Place Unit Trust Group Limited until
13 December 2023 after which she continued
as a Non-executive Director. Sheila Nicoll
received £3,629 for chairing St. James’s Place
Unit Trust Group Limited from 14 December
2023. Simon Jeffreys received €50,781 for
chairing St. James’s Place International plc
(SJPI) until he retired from the Board on 18 May
2023. Dominic Burke, Rosemary Hilary, Simon
Jeffreys, John Hitchins and Roger Yates
received the following fees as Non-executive
Directors of St. James’s Place UK plc during
2023: £31,250 for Dominic Burke; £31,250 for
Rosemary Hilary; £12,070 for Simon Jeffreys
until he retired on 18 May 2023; £32,813 for
John Hitchins; and £11,719 for Roger Yates
until he retired on 18 May 2023.
Annual Report and Accounts 2023
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2.1.2 Remuneration arrangements for change of Chief Executive Officer (audited)
Termination arrangements for Andrew Croft
As we announced on 13 September, Andrew Croft stepped down from the Board and from the position of Chief Executive
Officer of St. James’s Place plc (Company) on 30 November 2023. Payments and remuneration arrangements relating to
loss of office are set out below.
Mr Croft will continue to receive his base salary and contractual benefits until the end of his notice period on 13 September
2024 when he ceases to be an employee and will be paid in accordance with his service agreement and the Policy.
Mr Croft was eligible for an annual bonus award for the financial year ending 31 December 2023, pro-rated for the period
he was a member of the Board of the Company. The Committee determined that the bonus award in respect of 2023 is
zero. He will not be eligible for annual bonus in respect of the financial year ending 31 December 2024.
Mr Croft will be treated as a good leaver in respect of his outstanding awards under the DBP and the PSP, and accordingly
the unvested awards under these plans will vest on the normal vesting dates. PSP awards will be subject to the achievement
of performance conditions and pro-rating in respect of his period of employment. He will not receive a PSP award in 2024.
PSP awards will continue to be subject to post-vesting holding periods in accordance with the rules of the PSP.
Mr Croft’s unvested Company Share Option Plan (CSOP) awards will vest on the normal vesting dates, subject to the
achievement of performance conditions and pro-rating in respect of his period of employment. He will not receive a CSOP
award in 2024 and CSOP awards will continue to be subject to post-vesting holding periods in accordance with the rules of
the CSOP.
Malus and clawback provisions will apply to any awards or payments made to Mr Croft under any of the above award
and share plans.
Mr Croft will retain his unvested Sharesave options and shares held in the Share Incentive Plan (SIP) in accordance with
the respective plan rules.
In line with the Policy, Mr Croft will be required to maintain a shareholding equivalent to 300% of his base salary from the
date he stepped down from the Board for two years post cessation.
Mr Croft will receive no additional compensation or payment for the termination of his service contract or his ceasing
to be a director of the Company or any other Group Company. The Company contributed towards his legal fees in
connection with the termination of his service contract.
Joining arrangements for Mark FitzPatrick
Mark Fitzpatrick was appointed Group Chief Executive effective 1 December 2023, having been Chief Executive
Officer Designate (and appointed to the Board) from 1 October 2023. Mr FitzPatrick receives a base salary of £840,000.
Mr FitzPatrick’s pension level is 10% of base salary, in line with other new joiners to the Company. His maximum annual bonus
is set at 200% of base salary for 2024, and his maximum PSP grant is 250% of base salary, both in line with the approved
Policy. Mr FitzPatrick also received Buyout awards over SJP shares with a value of £644,163 to replace the portion of awards
he held at Prudential that he forfeited to take up the role with SJP on 1 October 2023. The first tranche of these replacement
awards will vest in 2024 and are subject to the following performance conditions which apply to the Prudential plc Long
Term Incentive Plan 2021: Prudential plc’s relative total shareholder return for 50% of the awards; Prudential plc’s return on
embedded value for 30% of the award; and sustainability scorecard for 20% of the award. The second and third tranches
vest in April 2025 and May 2025 and are subject to SJP’s total shareholder return against the comparator group used for
SJP’s annual PSP awards. These replacement awards vest in line with the vesting dates of the awards he forfeited.
2.1.3 Summary of total annual bonus for 2023 performance (audited)
Bonus scorecard
The performance conditions (both financial and non-financial targets) and weightings which applied to the annual bonus
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 21% 12% £410m £458m £384.7m 0.0% 0.0%
Net funds under
management flows 42% 24% £7.40bn £9.09bn £5.1bn 0.0% 0.0%
Annual growth in
controllable expenses 42% 24% £377.3m £370.4m £370.4m 42.0% 24.0%
Strategic 70% 40% Assessment by the Committee of the
performance of the Executive Directors
39.0% 22.3%
Total calculated payout
before exercise of discretion 81.0% 46.3%
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2.1.3 Summary of total annual bonus for 2023 performance (audited) continued
Strategic targets performance assessment
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 guide 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 during the year.
A number of the business priorities were achieved and progress was made in meeting or exceeding certain business plan
objectives. The category entitled ‘Our culture and being a responsible business’ is made up entirely of environmental,
social and governance (ESG) targets and has been progressing to plan. In addition, other factors throughout the objectives
also recognise our aim to be a responsible business.
Business priority
(scorecard weighting – total 70%) Measure/target Outcome
Score (out
of 11.67%)
Building community (11.67%)
7
Net manpower growth
Grow adviser numbers in line with plan 3% growth achieved
Attainment of competent
adviser status
Reduce the time taken to reach competent
adviser status in line with plan
Time taken to reach competent adviser
status was reduced. Further reductions
required to achieve plan goal
Partner sentiment
Achieve strong overall scores based on a basket
of criteria in Partner engagement surveys
Improvements to Partner sentiment
required to achieve stronger scores
Partner feedback from
engagement events
Achieve positive Partner feedback from
engagement events
Positive feedback achieved
Employee engagement
Achieve strong employee engagement scores
based on colleague survey results
Engagement score of 87% achieved, in line
with plan
Being easier to do business with (11.67%)
9
Administration
performance
% of key performance indicators used to track the
performance of our administrators showing a
positive outcome
Target exceeded. Achieved 90% over the
whole year. Further work required to
optimise the benefit Partners receive from
improved administrator performance
Administration error rate
Improve administration service by reducing error
rates in line with plan
Achieved in line with plan
Salesforce integration
and satisfaction levels
Continue to embed Salesforce across corporate
functions and increase Partner sentiment
Partner sentiment and experience
improving with the rollout of new Salesforce
functionality
Enhancement of digital
client proposition
Increase client app features and assess client
satisfaction
Exceeded target
Client adoption of
digital tools
Increase the use of digital technologies by clients Achieved close to target
Data governance and
quality
Improve data governance and quality Material improvements achieved. Further
work required
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Business priority
(scorecard weighting – total 70%) Measure/target Outcome
Score (out
of 11.67%)
Delivering value to advisers and clients through our investment proposition (11.67%)
7
Client sentiment on
investment proposition
Achieve positive client sentiment on the
investment proposition
Improvement required. Plans underway
to enhance sentiment alongside broader
investment outperformance goals
Investment performance
Further improve aggregate relative performance,
as measured by the Value Assessment
methodology
Change to the Value Assessment
Statement methodology affected fund
ratings. Fund outperformance improved
alongside Partner sentiment
Investment proposition
changes
Successful delivery of planned fund and
portfolio changes
Achieved in line with plan
Carbon footprint
Reduce carbon footprint of investment
proposition in line with plan
Exceeded target
Building and protecting our brand and reputation (11.67%)
4: below
bonus
threshold
Client sentiment
Achieve positive client sentiment Positive sentiment achieved in certain
areas. Enhancements required to improve
overall sentiment
Reputation
Enhance SJP’s external reputation External challenges experienced during the
year. Further work planned to enhance SJP’s
external reputation
Client servicing
Deliver client servicing in line with expectations Significant progress achieved in line
with plan
Cyber security
Increase % of Partnership using DaaS or who are
CE+ accredited
Achieved target
Media sentiment
Achieve positive media sentiment External challenges experienced during the
year. Further work planned to enhance SJP’s
external reputation
Client complaints
Achieve low levels of complaints, relative to
volume of clients
Complaint volumes increased
Regulator relationships
Maintain a constructive relationship with the PRA
and FCA
Relationship continues to improve and will
be developed further in 2024
Risk management
Maintain effective risk management, compliance
oversight and internal audit framework
While control framework remains robust
some areas of improvement are required
Our culture and being a responsible business (ESG) (11.67%)
8
Culture vision
Focus on inclusion and belonging within the SJP
community and engaging with and embedding
the culture vision within the Partnership
Year on year improvement in employee
engagement score for inclusion and
belonging
Carbon emissions
Improve carbon emissions data collation and
support, becoming carbon positive in operations
by 2025
Have been progressing to plan in 2023 with
continued enhancements planned in 2024
to enable achievement of target
Financial resilience
Improve financial resilience in society and with
our employees through financial education
Exceeded target
Community impact
SJP Charitable Foundation to raise at least £9.2
million with Company matching
Goal exceeded. £9.5m raised during 2023
Inclusion and Diversity
30% representation of females in senior roles and
10% ethnic minority employee representation by
September 2023
34.4% representation of females in senior
roles achieved. Ethnic representation
increasing
Continued financial strength (11.67%)
8
Partner lending
Manage the existing Partner loan book and
maintain lending to cash utilisation targets
Behind plan due to challenging external
conditions
Risk appetite of capital
Manage capital within risk appetite Achieved
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2.1.3 Summary of total annual bonus for 2023 performance (audited) continued
2023 performance against bonus scorecard (including Committee discretion)
The table below sets out performance against financial and non-financial targets under the bonus scorecard, and the
effect of the Committee’s overriding discretion on the final outcome. The table also shows the portion of the annual bonus
awarded in cash and the portion awarded in deferred shares.
Andrew Croft Craig Gentle
Bonus scorecard (0% – 175%) 81% 81%
Committee discretion -81% -42%
Final outcome (% of base salary) 0% 39%
Maximum opportunity for 2023 (% of salary) 175% 175%
Final bonus outcomes
% of salary 0% 39%
% of maximum 0% 22%
Cash amount – £86,816
Deferred amount – £86,816
2.1.4 Long-term incentive awards (audited)
Vesting of Performance Share Plan awards
On 31 December 2023, the awards made on 25 March 2021 under the PSP reached the end of their three-year performance
period. As outlined below these awards did not meet the minimum performance hurdles and therefore no shares will vest.
The performance conditions which applied to the 2021 PSP awards, and the actual performance achieved against these
conditions, are set out in the tables below:
TSR relative to the FTSE 51 to 150
1
Average annual adjusted
EPS growth in excess of RPI
2
Performance hurdle 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% 5% 25%
Stretch or above Upper quartile or above 100% 12% or above 100%
Actual achieved 66 out of 80 companies 0% 0% 0%
1 FTSE 51 to 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.
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Granting of PSP awards in 2023
Details of PSP awards (nil-cost options) granted to the Executive Directors in 2023 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 £620,494 £11.9683 129,612 1,551 25%
Craig Gentle Nil-cost option 250% of salary of £448,665 £11.9683 93,719 1,122 25%
1 The number of shares awarded was calculated based on the average of the mid-market share prices over a period of three days prior to the date
of grant on 3 May 2023, being £11.9683 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 £11.9683.
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 2023 were based on the achievement of three 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 a straight-line relationship to 100% vesting for upper quartile performance; (b) EPS CAGR % using EEV
adjusted profit for one third of the award. 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, for one third
of the award; and (c) EPS CAGR % using Cash result profits for one third of the award. For the EPS performance metric elements, 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 (EPS CAGR of 5%) and maximum (EPS CAGR of at least 12%) targets. These awards also have a post-vesting
holding period of two years from the vesting date.
3 Andrew Croft’s award is subject to pro-rating in respect of his period of employment until 13 September 2024.
2.1.5 Share awards (audited)
The tables below set out details of share awards that have been granted to individuals who were Executive Directors
during 2023 and which had yet to vest or be exercised at some point during the year. With the exception of the awards
granted to Mark FitzPatrick, the performance periods for share awards run for a period of three years, ending on
31 December of the year immediately preceding the vesting date.
Buyout awards outstanding
Director Date of grant
Market
price at
grant
Shares
originally
awarded
Face value
(£)
1
Shares
vested Vesting date
Dividend
equivalents
added to
vested awards
Shares exercised
including
dividend
equivalents
Shares
lapsed
Remaining
unexercised at
31 Dec 2023
Mark
FitzPatrick
24 Oct 2023 6.4388 14,873 95,764 – 17 May 2024 – – – 14,873
24 Oct 2023 6.4388 34,513 222,222 – 4 April 2025
2
– – – 34,513
24 Oct 2023 6.4388 50,658 326,177 – 27 May 2025
2
– – – 50,658
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 five-days prior to the date of grant).
2 The performance period for the awards which vest on 4 April 2025 and 27 May 2025 is from 1 October 2023 to 31 December 2024.
3 The awards are in the form of nil-cost options granted under the rules of the Performance Share Plan and are subject to the performance
conditions outlined in section 2.1.2 (page 137). Vested awards will be subject to a two-year holding period from the relevant vesting date.
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2.1.5 Share awards (audited) continued
Performance Share Plan awards outstanding
Director Date of grant
Market
price at
grant
Shares
originally
awarded
Face value
(£)
1
Shares
vested Vesting date
Dividend
equivalents
added to
vested awards
Shares exercised
including
dividend
equivalents
5
Shares
lapsed
Remaining
unexercised at
31 Dec 2023
Andrew
Croft
25 Mar 2019 9.92 107,537 1,066,767 100,454 25 Mar 2022 – 100,454 – –
25 Mar 2020 7.13 159,387 1,136,429 137,657 25 Mar 2023 21,328 153,740 21,800
6
5,175
25 Mar 2021 12.67 89,695 1,136,436 – 25 Mar 2024
3
– – – 89,695
25 Mar 2022
4
14.64 100,947 1,477,359 – 25 Mar 2025 – – – 100,947
3 May 2023
2,4
11.9683 129,612 1,551,235 – 3 May 2026 – – – 129,612
Craig
Gentle
25 Mar 2019 9.92 77,757 771,349 72,635 25 Mar 2022 – 72,635 – –
25 Mar 2020 7.13 115,249 821,725 99,536 25 Mar 2023 11,679 111,009 15,919
7
–
25 Mar 2021 12.67 64,856 821,726 – 25 Mar 2024
3
– – – 64,856
25 Mar 2022 14.64 72,992 1,068,238 – 25 Mar 2025 – – – 72,992
3 May 2023
2
11.9683 93,719 1,121,657 – 3 May 2026 – – – 93,719
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). All awards are in the form of nil-cost options.
2 The performance conditions for the awards granted on 3 May 2023 are outlined in the “Granting of PSP awards in 2023” section on page 141.
3 The three-year performance period for the awards which are due to vest on 25 March 2024 ended on 31 December 2023.
4 Andrew Croft’s awards are subject to pro-rating in respect of his period of employment until 13 September 2024, as detailed on page 137.
5 Andrew Croft exercised options on 22 May 2023 at a market price of £11.46 per share and Craig Gentle exercised options on 28 March 2023 at a
market price of £11.62 per share. A sufficient number of shares were sold to cover the income tax and National Insurance Contributions due on
the exercise of these options and the retained shares are subject to post-vesting holding periods of two years from the applicable vesting date.
Dividend equivalents were paid in cash for the awards granted on 25 March 2019 as these awards were granted under the terms of the 2017
Remuneration Policy. Andrew Croft received a payment of £223,680.92 on 25 June 2023 and Craig Gentle received a payment of £134,723.40
on 25 April 2023. Both payments were subject to income tax and National Insurance Contributions.
6 21,730 shares lapsed due to the performance conditions not being met in full and 70 shares lapsed following the exercise of the linked Company
Share Option Plan (CSOP) option and is equivalent to the gain on the CSOP exercise.
7 15,713 shares lapsed due to the performance conditions not being met in full and 206 shares lapsed following the exercise of the linked CSOP option
and is equivalent to the gain on the CSOP exercise.
Company Share Option Plan options outstanding (linked to PSP awards)
Director Date of grant
Option price
(£)
Share options
originally
awarded
Grant value
(£)
2 1
Share options
vested Vesting date
Share
options
exercised
3
Share
options
lapsed
4
Remaining
unexercised at
31 Dec 2023
Andrew Croft 25 Mar 2020 7.13 212 1,512 182 25 Mar 2023 182 30 –
25 Mar 2022
5
14.635 1,946 28,480 – 25 Mar 2025 – – 1,946
3 May 2023
5
11.9683 2,525 30,220 – 3 May 2026 – – 2,525
Craig Gentle 25 Mar 2020 7.13 617 4,399 532 25 Mar 2023 532 85 –
25 Mar 2022 14.635 1,749 25,597 – 25 Mar 2025 – – 1,749
3 May 2023 11.9683 2,874 34,397 – 3 May 2026 – – 2,874
1 All share options are in the form of tax-advantaged Company Share Option Plan (CSOP) options which are linked to the PSP award granted on
the same date shown in the Performance Share Plan awards outstanding table above. The CSOP options are subject to the same performance
conditions as the linked PSP award. On the exercise of vested CSOP options, shares will lapse from the linked PSP award equivalent in value to
the gain achieved on the exercise of the CSOP options.
2 The grant value of the award is calculated by multiplying the number of shares options awarded by the option price (the average share price
figure over a period of three days prior to the date of grant).
3 Andrew Croft exercised CSOP options on 22 May 2023 at an option price of £7.13 and a market price of £11.51 per share and Craig Gentle exercised
CSOP options on 28 March 2023 at an option price of £7.13 and a market price of £11.60 per share. A sufficient number of shares were sold to cover the
option costs for these exercises and the retained shares are subject to post-vesting holding periods of two years from the applicable vesting date.
3 CSOP options lapsed prior to the vesting date due to the performance conditions of the linked 2020 PSP award not being met in full.
4 Andrew Croft’s unexercised CSOP options are subject to pro-rating in respect of his period of employment until 13 September 2024, as detailed
on page 137.
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Deferred Bonus Scheme – shares held during 2023
The table below sets out details of the awards held by the Executive Directors under the deferred element of the annual
bonus scheme during 2023:
Director
Balance at
1 January
2023
Released in
year
1
Awarded in
year
Balance at
31 December
2023
2
Vesting date
Andrew Croft 15,346 15,346 – – 25 March 2023
31,934 – – 31,934 25 March 2025
– – 28,445 28,445 24 March 2026
Craig Gentle 11,096 11,096 – – 25 March 2023
23,091 – – 23,091 25 March 2025
– – 20,567 20,567 24 March 2026
1 These deferred share awards were awarded on 25 March 2020 and were equal in value to 50% of each Directors’ 2019 total annual bonus
The shares were released and sold on 27 March 2023 at a market price of £11.76 per share.
2 Outstanding awards at the year-end relate to deferred shares awarded in 2022 and 2023 which were earned in 2021 and 2022 respectively.
The share price used to calculate the 2022 award was £12.90 (the average of the mid-market share prices for 1, 2 and 3 March 2022) and for
the 2023 award was £11.93 (the average of the mid-market share prices for 21, 22 and 23 March 2023).
3 Deferred share awards are held as Restricted Shares in the Group’s Employee Share Trust until the vesting date.
Further details of the deferred element of the annual bonus scheme are set out on page 155. Dividends accrue to the
Executive Directors during the three-year period that the shares are subject to forfeiture, and details of these dividends are
set out on page 155.
Save As You Earn (SAYE) share option scheme – shares held during 2023
Details of the options held by the Directors in 2023 under the SAYE scheme and any movements during the year are as follows:
Director
Options held at
1 January
2023
Granted
in year
Lapsed
in year
Exercised
in year
Options held at
31 December
2023
Exercise
price Dates from which exercisable
Andrew Croft 1,148 – – – 1,148 £9.40 1 May 2024 to 31 October 2024
Craig Gentle 843 – – – 843 £12.81 1 November 2024 to 30 April 2025
At 31 December 2023 the mid-market price for the Company’s shares was £6.84. The range of prices between 1 January
2023 and 31 December 2023 was between £6.11 and £13.05.
Share Incentive Plan – shares held during 2023
The table below sets out details of the awards held by the Directors under the Share Incentive Plan during 2023:
Director
Balance at
1 January
2023
Partnership shares
allocated in year
1
Matching shares
allocated in year
2
Dividend shares
allocated in year
3
Balance at
31 December
2023 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
134 – – – 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
– 150 15 – 165 24 March 2023 to 24 March 2026
1 Partnership shares are shares awarded in return for an investment of between £10 and £1,800. Partnership shares were purchased on behalf
of Craig Gentle on 24 March 2023 at a price of £11.93 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 24 March 2023
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 2024 and 27 February 2024 there were no exercises or other dealings in the Company’s share awards
by the Directors.
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2.1.6 Shareholding requirements and Directors’ share interests (audited)
Shareholding requirements
To align the long-term interests of Executive Directors and shareholders Executive Directors are required to build up a
shareholding in Company shares. The Chief Executive Officer is required to build up a shareholding equivalent to 300% of
salary and the Chief Financial Officer is required to build up a shareholding equivalent to 200% of salary. The table sets out
the shareholdings of the Executive Directors. Mark FitzPatrick’s shareholding will build as his awards start to vest from 2024
onwards and Craig Gentle’s shareholding had previously exceeded the requirements, but has fallen below the minimum
requirement due to a fall in the Company’s share price during 2023. Until the shareholding requirements are met, at least
50% of vested shares from the PSP and other share awards (less tax liability) will normally be retained by the Executive
Director.
Director
Shares held at
1 January
2023
Shares held at
31 December
2023
Percentage of
base salary
held in SJP
shares as at
31 December
2023
1
Mark FitzPatrick – – 0%
Andrew Croft
2
732,395 919,636
982%
Craig Gentle 96,631 141,652 185%
Dominic Burke – –
Emma Griffin 2,164 2,275
Rosemary Hilary – –
John Hitchins – –
Simon Jeffreys
3
18,364 18,364
Paul Manduca 17,000 27,000
Lesley-Ann Nash – –
Roger Yates
3
50,000 50,000
1 Calculated using the mid-market price at 31 December 2023 of £6.84 and the base salary as at 31 December 2023. The overall percentage of
base salary excludes the value of shares that would need to be sold to meet the notional tax and employee National Insurance contributions
on Deferred Bonus Scheme (DBS) awards that remained in their periods of deferral.
2 Andrew Croft stepped down (see page 131) from the Board on 30 November 2023. He is subject to a post-cessation shareholding requirement
which requires him to hold shares equivalent to 300% of his salary as at 30 November 2023 up to the second anniversary of his departure date.
3 Simon Jeffreys and Roger Yates retired from the Board on 18 May 2023.
4 The interests of the Executive Directors set out above include the gross number of shares held in trust for the Directors for DBS awards which
are subject to a three-year continuous service requirement, details of which are set out on page 155. The interests of the Executive Directors
also include awards under the Share Incentive Plan, details of which are set out on page 155. They also include shares which are beneficially
owned and are subject to a post-vesting holding period following the exercise of PSP options. Unexercised share options are not included.
5 The Company’s register of Directors’ interests contains full details of Directors’ shareholdings and any share awards under the Company’s various
share schemes.
6 Disclosure of the Directors’ interests in share awards is made on pages 141 to 143 and also in Note 27 – Related party transactions.
7 The details of any shares released from DBS awards and any share options exercised during 2023 are outlined in section 2.1.5 on pages 141 to 143.
Between 1 January 2024 and 27 February 2024 there were no transactions in the Company’s shares by the Directors.
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Executive Directors’ shareholdings and outstanding share awards
Beneficially
owned at
31 December
2023
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
6
919,636 325,429 1,148 60,379 1,128
Mark FitzPatrick – 100,044 – – –
Craig Gentle 141,652 231,567 843 43,658 701
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 142.
3 Details of the SAYE options (including options that are vested but have not been exercised) are set out on page 143.
4 Details of DBS awards are set out on page 143.
5 Details of the SIP shares are set out on page 143.
6 Andrew Croft’s shareholdings and outstanding share awards are as at the date he stepped down as a Director (30 November 2023).
2.1.7 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 2023, 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 2023.
Share scheme
Number of new
ordinary
shares of
15 pence each
Percentage of
total issued
share capital
as at
31 December
2023
SAYE schemes 3,158,778 0.58%
Executive share schemes 14,541,027 2.65%
Partners’ share schemes 10,862,512 1.98%
Total 28,562,317 5.21%
In addition, as at 31 December 2023, the Group’s Employee Share Trust held 2,949,167 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 2023 was 497,742.
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2.1.8 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 comparator index, given the broad nature
of the index and the companies within it.
This graph shows the value, by 31 December 2023, of £100 invested in St. James’s Place on 31 December 2013, 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.
31/12/13 31/12/2331/12/2231/12/2131/12/2031/12/1931/12/1831/12/1731/12/1631/12/15
600
500
400
300
200
100
0
31/12/14
Value (£) (rebased)
St. James’s Place
FTSE All-Share
2.1.9 Total shareholder return performance and CEO pay over the same period (unaudited)
The table below shows the total remuneration figure for the Chief Executive Officer 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
David Bellamy Andrew Croft
Mark
FitzPatrick
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2023
Total
remuneration (£) 3,646,514 3,115,230 2,631,667 2,458,020 1,886,774 1,421,729 812,678 3,141,423 3,115,406 695,545 85,823
Annual bonus
(% of maximum) 95% 93.3% 96.67% 96.67% 62% 37.5% 0% 96.7% 77.1% 0% –
LTIP vesting
(% of maximum) 96% 100% 100% 87.94% 85.3% 62.9% 9% 93.4% 86.4% 0% –
The 2022 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 annual report by a revised figure based on the Company’s share price on the date of vesting on 27 March 2023,
being £11.80.
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2.1.10 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 four years.
Remuneration element
Average
employee
(% change)
Executive Directors (% change)
A Croft C Gentle
Salary/fee
1
2023 7.5 (4.0) 4.8
2022 7.4 3.3 3.3
2021 – 5.8 5.8
2020 5.0 (2.2) (2.2)
Benefits
2
2023 8.6 (5.2) 184.7
2022 3.3 1.1 1.1
2021 5.6 1.7 1.6
2020 3.1 – (6.1)
Bonus 2023 (28.7) (100) (64.6)
2022 9.5 (17.6) (17.6)
2021 – – –
2020 (100) (100) (100)
Remuneration element
Average
employee
(% change)
Non-executive Directors (% change)
3
D Burke
5,6
E Griffin
5
R Hilary
6
J Hitchins
5,6
S Jeffreys
5
P Manduca L-A Nash
5
R Yates
5
Salary/fee
1,4
2023 7.5 593.6 12.3 3.4 16.7 (41.8) – 0.9 (60.2)
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 – – 686.2 – 14.5 – – 13.5
Benefits
2
2023 8.6 – 61.3 100 100 (0.9) (39.8) 32.9 (100)
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 – – – – – (34.2) – – –
Bonus 2023 (28.7) – – – – – – – –
2022 9.5 – – – – – – – –
2021 – – – – – – – – –
2020 (100) – – – – – – – –
1 The change in the salary for average employees is higher in 2022 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 136 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 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.
Simon Jeffreys and Roger Yates retired from the Board on 18 May 2023.
6 The significant increase in a) Rosemary Hilary’s fee in 2020 was due to her not having served a full year in 2019; b) John Hitchins’ fee in 2022
was due to him having not served a full year in 2021 and c) Dominic Burke’s fee in 2023 was due to him having not served a full year in 2022.
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2.1.11 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 2023, compared to the year ending 31 December 2022.
2023 2022
Percentage
change £’Million £’Million
Executive Directors’ remuneration
1
1.8 5.4 -67%
IFRS profit after tax
2
(9.9) 407.2 -102%
European Embedded Value (EEV) operating profit before tax
2
(1,891.60) 1,589.7 -219%
Dividends 269.3 287.1 -6%
Employee remuneration costs 253.4 254.2 0%
1 Calculated on the same basis as the Single total figure of remuneration on page 134 for Executive Directors in office as at 31 December 2023.
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 pages 276 to 278), 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 54 to 73.
2.1.12 CEO pay ratio (unaudited)
Year Methodology
25th percentile
pay ratio
Median pay
ratio
75th percentile
pay ratio
2023 Option C 19:1 13:1 7:1
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 633,862 31,583 47,500 65,000
Total pay 776,762 40,828 59,600 105,450
For 2023, we have continued to calculate 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.
To calculate the ratio in accordance with the regulations we ranked all our UK employees by their annualised full-time
equivalent salary as at 31 December 2023. 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 2023, 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
Officer’s remuneration. We believe the three identified employees are representative of the 25th, 50th and 75th percentiles.
For 2023, the Chief Executive Officer is receiving zero annual bonus and the total vesting of the PSP award was zero; and
hence this has significantly changed the CEO pay ratio compared to previous years. 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 Officer.
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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 2024 and agreed
the bonus outcomes from 2023.
See pages
137 to 140
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 141
Assessing risk
The Committee assessed the alignment of the Group’s remuneration policies
with risk appetite and regulatory requirements. Assurance was sought from the
Chief Risk Officer and relevant management from across the business, that the
remuneration outcomes were in line with the policies and were appropriate.
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 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.
Shareholder
engagement
Following the Company’s Annual General Meeting held on 18 May 2023, where the
advisory vote to approve the Directors’ Remuneration Report for the year ended
31 December 2022 received a vote of more than 20% against, the Committee
engaged with shareholders. The Committee noted that most shareholders
supported the resolution and will keep in mind the views expressed by
shareholders on the matters raised.
See pages 130
Governance
and other
matters
The Committee reviewed the Gender and Ethnicity Pay Gap Reports, 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
104 to 105) and the Board remains satisfied that, as a whole, the Committee has the experience and qualifications
necessary.
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2.2.2 Committee membership and attendance in 2023
This is set out on page 101. No Director was present when their own remuneration was considered or agreed.
2.2.3 Advisers to the Committee
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
might compromise their independence or objectivity.
The total fees paid to A&M for the advice provided to the Committee during the year was £173,167. Fees are charged on a
‘time spent’ basis.
2.2.4 Voting at annual general meetings
The votes cast at the 2023 Annual General Meeting in respect of the resolutions on the Directors’ Remuneration Report
and the Directors’ Remuneration Policy are summarised below.
2023 Directors’
Remuneration
Report vote
Percentage of
votes cast
2023 Directors’
Remuneration
Policy vote
Percentage of
votes cast
Votes for 334,253,454 77.85% 421,579,842 97.35
Votes against 95,081,071 22.15% 11,475,885 2.65
Total votes cast 429,334,525 433,055,727
Total votes withheld 3,775,589 54,287
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2.3. Implementation of the Remuneration Policy in 2024 (unaudited)
2.3.1 2024 salaries
The base salaries of the Executive Directors were reviewed in 2024. The current salaries as at 1 March 2023 and from 1 March
2024 are as shown below. These percentage increases are below the average increase levels for other employees of the
Company.
Executive Director
Salary from
March 2023
Salary from
March 2024
Percentage
increase £ £
Mark FitzPatrick 840,000 840,000 0%
Craig Gentle 448,665 466,612 4%
To simplify the remuneration package for Executive Directors, the Company intends to review car allowances during 2024.
2.3.2 Annual bonus for 2024
The Executive Directors’ maximum bonus opportunity for 2024 has increased following approval of the two stage increase
in the Policy at the 2023 AGM to 200% of salary. 60% of the annual bonus will be determined by a scorecard of financial
performance metrics, and 40% by strategic and individual performance objectives. Malus and clawback provisions apply
to both the cash and deferred elements of the bonus.
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 120%) Alignment with strategy
Underlying cash result 24% Recognises annual cash profitability, which is an important driver
of dividends and future investment in the business.
Net funds under
management flows
48% Reflects both new business and client retention, and is a driver
of sustained profit growth.
Annual growth in
controllable expenses
48% Keeping cost growth below the rate of growth in revenues
is a key determinant of profit growth.
Annual bonus performance targets for the 2024 metrics set out here will be disclosed in the Directors’ Remuneration
Report for 2024, as disclosing them in the Report for 2023 could have commercial disadvantages for the Company.
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2.3.2 Annual bonus for 2024 continued
Strategic and individual performance objectives
For 2024, the Committee has set the Executive Directors strategic and individual performance objectives which will each
have a weighting of 20% of maximum (40% of base salary). The strategic objectives align to the six business priorities
underpinning our annual business plan. Each priority is equally weighted and is made up of objectives 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 strategic objectives. The individual performance objectives include a range of objectives which are designed to
support the achievement of certain strategic outcomes.
Business priority (scorecard weighting – % of base salary – total 40%)
Building community
Partner sentiment
Employee engagement
Being easier to do business with
Digital sentiment
Administration performance
Our culture and being a responsible business
Inclusion and diversity
Culture
Continued financial strength
Financial performance targets
Delivering value to advisers and clients through
our investment proposition
Investment performance
Investment risk and controls
Building and protecting our brand and reputation
Risk and control environment
Client sentiment
2.3.3 Performance Share Plan awards for 2024
The Policy sets the maximum award capacity at 250% of base salary. In 2024, the Chief Executive Officer will receive a PSP
award of 250% of salary (2023: n/a) and the Chief Financial Officer will receive a PSP award of 215% of salary, following a
reduction having considered the fall in share price since the last grant (2023: 250%). These awards will be subject to a
relative TSR performance condition for one third of the award; EPS in 2026 using Cash result profits for one third and EPS
in 2026 using EEV adjusted profits for the final third, as follows:
Performance level hurdle
TSR relative to
FTSE 51 to 150
1
EPS in 2026 using
Cash result profits
2
EPS in 2026 using
EEV adjusted profit
3
Performance
required
Percentage of
one third of
award vesting
Performance
required (pence
per share)
Percentage of
one third of
award vesting
Performance
required (pence
per share)
Percentage of
one third of
award vesting
Below threshold Below median 0% below 45.38 0% below 116.06 0%
Threshold Median 25% 45.38 25% 116.06 25%
Stretch or above Upper quartile or above 100% 55.86 100% 143.65 100%
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 in 2026 using Cash Result profits.
3 One third of the award is based on EPS in 2026 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.
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2.3.4 Shareholding requirement
The Chief Executive Officer 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 Duration of contracts
The details of existingexisting Executive Directors’ service contracts are summarised in the table below:
Executive Director Date of service agreement Notice period from Company Notice period from Executive Director
Mark FitzPatrick 1 October 2023 12 months 12 months
Craig Gentle 9 January 2018 12 months 12 months
Executive Directors’ service contracts do not have fixed end dates. The Board of the Company is proposing that each of the
Executive Directors be elected or re-elected at the Company’s forthcoming AGM.
2.3.6 Fees for the Board Chair and Non-executive Directors for 2024
The fees for the Board Chair and Non-executive Directors for 2023 and 2024 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. The fees
paid to Non-executive are set in line with individual responsibilities, which the Board believes will ensure that the fees paid
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 changes were required for 2024 in order to reflect the increased responsibility and commitments for those roles and
to ensure the fees remained competitive with comparable roles elsewhere. The Board therefore agreed that the following
increases should be made, commencing on 1 January 2024. The fees for Committee Chairs will increase to £30,000 (2023:
£26,000) and for Committee members (other than Committee Chairs) will increase to £14,000 (2023: £10,500). These fees
would not apply to the Chair or members of the Nomination and Governance Committee, which will increase to £7,000
(2023: £5,000). 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 to £400,000 (2023: £375,000). When setting the fees
paid to our Non-executive Directors and the Chair for 2024, the Board and Remuneration Committee sought to ensure that
they were comparable with those for listed financial services companies of comparable size.
Fees from
1 January to
31 December
2023
Fees from
1 January to
31 December
2024
Percentage
increase from
2023
£ £
Board Chair 375,000 400,000 7%
Base fee 76,000 77,000 1%
Committee Chair (excluding Nomination and Governance Committee) 26,000 30,000 15%
Audit, Risk and Remuneration Committee member (per Committee membership) 10,500 14,000 33%
Nomination and Governance Committee member 5,000 7,000 40%
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:
Emma Griffin, Chair of the Group Remuneration Committee
27 February 2024
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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 on 18 May 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 2024 AGM. The Policy will apply to remuneration in respect of the three-year period from
2023 to 2025. The Policy can be found on the corporate website at www.sjp.co.uk/about-us/corporate-governance.
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.
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
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St. James’s Place plc
Remuneration
5
Report of the Group Remuneration Committee continued
Section 3
2023 Summary Directors’ Remuneration Policy
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Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
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
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.
Fifty per cent 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.
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Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
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.
Minimum
shareholding
requirements
To ensure
alignment of the
long-term interests
of Executive
Directors and
shareholders.
Executive Directors are required to build and maintain a
minimum shareholding equivalent to 300% of base salary for
the Chief Executive Officer and 200% of base salary for other
Executive Directors, to be achieved normally within five years
of appointment.
Until the threshold is reached, at least 50% of vested shares
from the Performance Share Plan 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.
Executive Directors 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
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Remuneration
Report of the Group Remuneration Committee continued
5
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Element
Purpose and link to
strategy Operation including maximum opportunity Performance metrics
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.
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.
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The Directors present their report together with the audited Consolidated Financial Statements of the Group for the year
ended 31 December 2023. 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 2023 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 74
to 84 of the Strategic Report;
details of branches operated by
the Company on page 242; and
the Group’s impact on the
environment, including those
disclosures required regarding
greenhouse gas emissions,
on pages 30 to 37 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 26 to the Financial
Statements.
Going concern
In conjunction with its assessment
of longer-term viability as set out
on pages 82 to 84, 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 2023, the
Company’s issued and fully paid-
up share capital was 548,604,794
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 23 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.
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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 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 144.
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 is available on the Company’s website.
As at 31 December 2023 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. 9.32%
BLS Capital 6.36%
Norges Bank 3.08%
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.
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Results and dividends
The financial review on pages 54 to 73
sets out the consolidated results for
the year.
An interim dividend of 15.83 pence per
share, which equates to £86.8 million,
was paid on 22 September 2023 in
respect of the year ended 31 December
2023 (2022: 15.59 pence per
share/£84.7million). The Directors
recommend that shareholders
approve a final dividend of 8.00
pence per share, which equates to
£43.9 million (2022: 37.19 pence per
share/£202.4 million), in respect of the
year ended 31 December 2023, to be
paid on 24 May 2024 to shareholders
on the register at close of business
on 26 April 2024.
Details of the Dividend Reinvestment
Plan (DRIP) are set out on page 262.
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 24 to 49.
Details of how the Board engages with
employees can be found on page 96
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
2023 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 90 to 97. In many cases the
Group’s primary point of engagement
with 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
90 to 97.
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 £746 million as at 27 February
2024 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 £374 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 20 to the Financial Statements.
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Directors and Directors’
indemnities
Details of the Directors of the
Company at the date of this
report and during the year ended
31 December 2023 can be found in
the corporate governance report
on pages 88 and 89. Details of the
indemnity provisions in place for the
Directors, including qualifying third-
party indemnity provisions, can be
found on page 102.
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 £5.5 million
to the St. James’s Place Charitable
Foundation, more details of which
can be found on pages 38 and 39.
Annual General Meeting
The Company plans to hold its Annual
General Meeting on Wednesday 15 May
2024. 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 2023
can be found in the Chief Executive
Officer’s report on pages 14 to 16.
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:
Mark FitzPatrick, Chief Executive
Officer
Craig Gentle, Chief Financial Officer
27 February 2024
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The Directors are responsible for
preparing the Annual Report and
Accounts 2023 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 2023
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 88
and 89 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 2024
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Financial
Statements
Independent Auditors’ Report to the
Members of St. James’s Place plc 164
Consolidated Statement
of Comprehensive Income 172
Consolidated Statement
of Changes in Equity 173
Consolidated Statement
of Financial Position 174
Consolidated Statement
of Cash Flows 175
Notes to the Consolidated
Financial Statements under
International Financial
Reporting Standards 176
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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 2023 and of the Group’s loss
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 2023;
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, comprising material accounting policy
information and other explanatory information.
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 or its controlled
undertakings in the period under audit.
Our audit approach
Overview
Audit scope
The Consolidated Financial Statements comprise the
consolidation of approximately 75 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 70% 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 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)
Provision for redress in respect of ongoing service
evidence (Group)
Recoverability of Parent Company’s investment in the
subsidiaries (Parent)
Materiality
Overall Group materiality: £19,600,000 (2022: £20,700,000)
based on 5% of underlying cash generated in the year.
Specific Group overall materiality: £820,000,000
(2022: £720,000,000) based on 0.5% of Assets held to
cover linked liabilities applies to assets held to cover
linked liabilities, investment contract liabilities and
associated income Statement line items.
Overall Parent Company materiality: £15,700,000
(2022: £13,800,000) based on 1% of total assets.
Performance materiality: £14,700,000 (2022: £15,500,000)
(Group) and £10,775,000 (2022: £10,350,000)
(Parent Co
mpany).
Specific performance materiality: £615,000,000
(2022: £540,000,000) applied to assets held to cover
linked liabilities, investment contract liabilities and
associated income Statement line items.
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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 provision for redress in respect of Ongoing service evidence (Group) and carrying value of investments in subsidiaries
(Parent Company) are new key audit matters this year. Otherwise, the key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation of level 3 investments, being
investment properties and equities and fixed
income securities in the Diversified Assets Fund
(Group)
As disclosed in Note 20 (Page 228) as at
31 December 2023, the Group held £167.0 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, £3.1 billion of these
investments are in investment properties
(£1.1 billion), level 3 equities (£1.6 billion) and
fixed income securities (£0.4 billion) held within
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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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 110) and Note 15 (Page 207).
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 2023 was £283.5 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
Evaluated 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.
Provision for redress in respect of ongoing
service evidence (Group)
As disclosed in the Group Audit Committee
Report (Page 110) and Note 18 (page 216) to
the Financial Statements. During the year the
Group has recognised a provision related to
the review of a sub-population of clients that
has been charged for ongoing advice services
since the start of 2018 but where the evidence
of delivery of the ongoing advice service falls
below the acceptable standard (the Ongoing
Service Evidence provision).
As at 31 December 2023 the total provision
in respect of the review was £426m which
represents the estimated refund of charges,
interest and the administration costs
associated with completing the exercise. The
estimation of the provision involves significant
judgement and subjectivity to be applied in
relation to key assumptions.
Management has estimated the provision based
on a sample of case record reviews undertaken
by a Skilled Person (and management’s expert
for the purpose of our audit) with the results
from the sample applied to the wider population
under review. Management had determined
that the period under review is from 2018.
Significant assumptions include:
the estimation of the population of
clients where evidence is not available
to demonstrate that ongoing advice
was provided;
the amount of redress based on average
client funds under management for the
period subject to refund;
the response rate from customers; and
the administration costs of running the
review programme.
We have assessed and challenged the Group’s methodology
and the assumptions applied in arriving at the provision.
We obtained management’s calculation and tested the
mathematical accuracy and agreed the calculation back to
source data.
We reviewed the scope, methodology and results of the procedures
undertaken on the sample population of clients by management’s
expert to assess whether it was an appropriate basis for the
calculation of a provision. As part of our procedures we selected
a sample of the findings from management’s expert and assessed
whether the reported finding was appropriate.
We engaged PwC regulatory experts (auditor experts for the purpose
of our audit) to assess the work of management’s experts and to
evaluate and challenge the basis of significant estimates including
the period over which the review was being undertaken, the
estimated response rate and the costs of running the redress
programme.
We independently performed sensitivity analysis on the significant
assumptions and considered alternative scenarios which could be
considered reasonably possible.
We obtained and reviewed relevant regulatory correspondence with
the Financial Conduct Authority and Prudential Regulation Authority,
discussing the content of any correspondence considered to be
pertinent to our audit with management. We met with each regulator
to discuss their correspondence with the entity.
Given the inherent uncertainty in the estimation of the provision
and its judgemental nature, we evaluated the disclosures made in
the Financial Statements. In particular, we focused on challenging
management around whether the disclosures were sufficiently clear
in highlighting the significant uncertainties that exist in respect of
the provision and the sensitivity of the provision to changes in the
underlying assumptions.
Based on the procedures performed and evidence obtained, we found
management’s assumptions to be appropriate.
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Key audit matter How our audit addressed the key audit matter
Recoverability of Parent Company’s
investment in the subsidiaries (Parent)
The carrying value of directly held investments in
subsidiaries is £1,296.7m as at 31 December 2023
(2022: £1,104.7m), accounting for 75.3% (2022:
66.4%) of the Parent Company’s total assets.
The investments in subsidiaries are carried
at cost stated after any impairment losses.
Management is required by IAS 36 ‘Impairment
of assets’ to review at least annually for
impairment, or when circumstances or events
indicate there may be uncertainty over its value.
The determination of recoverable amounts for
subsidiaries requires assumptions to be made
and the key assumptions used are the value of
in-force business and the discount rate applied.
The carrying value of these investments is not
at a higher risk of significant misstatement or
subject to significant judgement. However, due
to their materiality in the context of the Parent
Company Financial Statements, this is the area
that had the greatest effect on our overall
Parent Company audit.
We challenged management on key elements of the assessments
including the value of in-force-business and the discount rate.
The total investment of £1,296.7m (2022: £1,104.7m) is made up of
investment in St. James’s Place Wealth Management Group Limited
with a carrying value of £1,189.1m (2022: £1,004.1) and St. James’s Place
DFM Holdings Limited with a carrying value of £107.6m (2022: £100.6m).
We evaluated the past profitability of St. James’s Place Wealth
Management Group which we have audited in the past. This entity
represents 91.7% (2022: 90.9%) of the total investments in subsidiaries
and generated a profit of £1,123.5m cumulatively from 2023 and 2022
representing a value equivalent to 94.4% of the investment in St. James’s
Place Wealth Management Group Limited. We considered future
profitability of the two investments and did not identify any impairment
indicators. We further obtained and understood management’s
sensitivity calculations over the carrying value assessments, as well
as performing further sensitivity scenarios ourselves.
Overall, we are satisfied that there is sufficient evidence to support the
key assumptions made by management within their assessments and
agree with the Parent Company’s conclusion that there is no
impairment of its investment in subsidiaries.
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 financially 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.
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
Consolidated 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 reviewed 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.
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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
£19,600,000 (2022: £20,700,000). £15,700,000 (2022: £13,800,000).
How we
determined it
5% of underlying cash generated in the year 1% of total assets
Rationale for
benchmark
applied
The engagement team concluded that £19.6 million is the most
appropriate figure when setting an overall materiality on the
engagement. The quantum of £19.6 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. £19.6 million represents 5% of the underlying cash generated
in the year.
The purpose of the Parent
Company is to hold investments
in other Group companies.
As such we concluded it
appropriate to use total assets
as the benchmark for overall
materiality.
We agreed with the Group Audit Committee that we would
report to them misstatements identified during our audit
above £980,000 (Group audit) (2022: £1,000,000) and
£780,000 (Parent Company audit) (2022: £690,000) 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 £19,600,000
(2022: £20,700,000).
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:
Obtaining the Directors’ going concern assessment for
the Group and Company Financial Statements and
gaining an understanding of the Directors’ going
concern assessment process, including the preparation
of the budget.
Obtaining the budget covering the period of the going
concern assessment and evaluating the forecasting
method adopted by the Directors in assessing going
concern.
Testing the mathematical accuracy of the model and
evaluating the key assumptions using our understanding
of the Group and external evidence where appropriate.
We also performed a comparison of the 2023 budget
and the actual results to assess the historical accuracy
of the budgeting process.
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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
between £3,800,000 and £18,200,000.
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% (2022: 75%%) of overall materiality, amounting
to £14,700,000 (2022: £15,500,000) for the Consolidated
Financial Statements and £10,775,000 (2022: £10,350,000)
for the Parent Company 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
£615,000,000 (2022: £540,000,000) for the Consolidated
Financial Statements.
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Evaluating the results of management’s analysis of the
relevant solvency requirements and liquidity position of
the Group, including forward looking plausible downside
scenarios within the Group’s Own Risk and Solvency
Assessment;
Evaluating the reasonableness of management’s
downside assumptions using our understanding of
the Group and the external environment. We evaluated
management’s assumptions by performing independent
stress testing to determine whether a reasonable
alternative stressed scenario would result in a breach
of minimum regulatory requirements or the Group’s
liquidity requirements.
Evaluating the mitigating actions that management
identified and assessing whether these were in the
control of management and possible in the going
concern period of assessment.
Evaluating 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.
Assessing the adequacy of disclosures in the Going
Concern Statement in note 1 of the Consolidated
and Company Financial Statements and within the
Assessment of going concern section of the Directors’
report on page 158.
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. 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 2023
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.
Directors’ Remuneration
In our opinion, the part of 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.
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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 and Parent Company 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.
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
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
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Independent Auditors’ Report to the Members
of St. James’s Place plc
continued
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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, 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.
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 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
15 years, covering the years ended 31 December 2009 to
31 December 2023.
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 2024
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| Year ended | Year ended | ||
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| Note | £’Million | £’Million | |
| Fee and commission income | 4 | ||
| Expenses | 5, 18 | ( | ( |
| Investment return | 6 | ( | |
| Movement in investment contract benefits | 6 | ( | |
| Insurance revenue | 7 | ||
| Insurance service expenses | 8 | ( | ( |
| Net reinsurance expense | ( | ( | |
| Insurance service result | ( | ||
| Net insurance finance (expense)/income | ( | ||
| Other finance income | 9 | ||
Profit before tax | 3 | ||
Tax attributable to policyholders’ returns | 10 | ( | |
(Loss)/profit before tax attributable to shareholders’ returns | ( | ||
Total tax (charge)/credit | 10 | ( | |
Less: tax attributable to policyholders’ returns | 10 | ( | |
Tax attributable to shareholders’ returns | 10 | ( | ( |
(Loss)/profit and total comprehensive income for the year | ( | ||
Profit attributable to non-controlling interests | |||
(Loss)/profit attributable to equity shareholders | ( | ||
(Loss)/profit and total comprehensive income for the year | ( | ||
Note | Pence | Pence | |
Basic earnings per share | 23 | ( | |
Diluted earnings per share | 23 | ( |
1,2,3
2
1,3
1,3
2
1
1
1
1
1
3
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
2 Restated to reclassify revenue from investment and insurance business. See Note 1a.
3 Restated to reclassify Other finance income. See Note 1a.
The results relate to continuing operations.
The Notes and information on pages 176 to 246 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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Financial Statements
Consolidated Statement of Comprehensive Income
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| Equity attributable to owners of the Parent Company | Non- | ||||||||
| Share | Share | Shares in | Misc. | Retained | controlling | Total | |||
| capital | premium | trust reserve | reserves | earnings | Total | interests | equity | ||
| Note | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million | |
At 1 January 2022 | ( | ||||||||
| Impact of the adoption | |||||||||
| of IFRS 17 | |||||||||
At 1 January 2022 (restated) | ( | ||||||||
Profit and total comprehensive income for the year | |||||||||
Dividends | 23 | ( | ( | ( | ( | ||||
Issue of share capital | 23 | ||||||||
Exercise of options | 23 | ||||||||
Consideration paid for own shares | ( | ( | ( | ||||||
Shares sold during the year | ( | ||||||||
Retained earnings credit in respect of share option charges | |||||||||
| Non-controlling interests arising | |||||||||
| on the part-disposal | |||||||||
of subsidiaries | |||||||||
| At 31 December 2022 | ( | ||||||||
| (Loss)/profit and total | |||||||||
| comprehensive income | |||||||||
for the year | ( | ( | ( | ||||||
Dividends | 23 | ( | ( | ( | ( | ||||
Exercise of options | 23 | ||||||||
Consideration paid for own shares | ( | ( | ( | ||||||
Shares sold during the year | ( | ||||||||
Retained earnings credit in respect of share option charges | |||||||||
| Retained earnings debit arising | |||||||||
on disposal of subsidiary | ( | ( | ( | ||||||
At 31 December 2023 | ( |
1
1
1
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
The number of shares held in the Shares in trust reserve is given in Note 23 Share capital, earnings per share and dividends.
Miscellaneous reserves represent other non-distributable reserves.
The Notes and information on pages 176 to 246 form part of these Consolidated Financial Statements.
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Consolidated Statement of Changes in Equity
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| As at | As at | ||
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| Note | £’Million | £’Million | |
| Assets | |||
Goodwill | 11 | ||
| Deferred acquisition costs | 11 | ||
| Intangible assets | |||
– Purchased value of in-force business | 11 | ||
– Computer software | 11 | ||
Property and equipment, including leased assets | 12 | ||
| Deferred tax assets | 10 | ||
Investment in associates | 26 | ||
| Reinsurance assets | 17 | ||
| Other receivables | 15 | ||
Income tax assets | |||
| Investments | |||
– Investment property | 14 | ||
– Equities | 14 | ||
– Fixed income securities | 14 | ||
– Investment in Collective Investment Schemes | 14 | ||
– Derivative financial instruments | 14 | ||
Cash and cash equivalents | 14 | ||
Total assets | |||
| Liabilities | |||
Borrowings | 19 | ||
Deferred tax liabilities | 10 | ||
| Insurance contract liabilities | 17 | ||
Deferred income | 11 | ||
Other provisions | 18 | ||
| Other payables | 16 | ||
Investment contract benefits | 14 | ||
Derivative financial instruments | 14 | ||
Net asset value attributable to unit holders | 14 | ||
Income tax liabilities | |||
Total liabilities | |||
Net assets | |||
| Shareholders’ equity | |||
Share capital | 23 | ||
Share premium | |||
Shares in trust reserve | ( | ( | |
Miscellaneous reserves | |||
Retained earnings | |||
Equity attributable to owners of the Parent Company | |||
Non-controlling interests | |||
Total equity | |||
Pence | Pence | ||
Net assets per share |
1
1
1
1
1
1
1
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
The Consolidated Financial Statements on pages 172 to 246 were approved by the Board on 27 February 2024 and signed
on its behalf by:
Mark FitzPatrick, Chief Executive Officer Craig Gentle, Chief Financial Officer
The Notes and information on pages 176 to 246 form part of these Consolidated Financial Statements.
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Financial Statements
Consolidated Statement of Financial Position
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| Year ended | Year ended | |||
| 31 December | 31 December | |||
| 2023 | 2022 | |||
| Note | £’Million | £’Million | ||
| Cash flows from operating activities | ||||
| Cash generated/(used in) from operations | 21 | ( | ||
Interest received | ||||
Interest paid | ( | ( | ||
Income taxes paid | 10 | ( | ( | |
Contingent consideration paid | ( | ( | ||
Net cash inflow/(outflow) from operating activities 1 | ( | |||
| Cash flows from investing activities | ||||
Payments for property and equipment | 12 | ( | ( | |
Payment of software development costs | 11 | ( | ( | |
Payments for acquisition of subsidiaries and other business combinations, net of cash acquired | ( | ( | ||
Payments for associates | ( | |||
Proceeds from sale of shares in subsidiaries and other business combinations, net of cash disposed | ||||
Net cash outflow from investing activities 1 | ( | ( | ||
| Cash flows from financing activities | ||||
Proceeds from the issue of share capital and exercise of options | ||||
Consideration paid for own shares | ( | ( | ||
Proceeds from borrowings | 19 | |||
Repayment of borrowings | 19 | ( | ( | |
Principal elements of lease payments | 13 | ( | ( | |
Dividends paid to Company’s shareholders | 23 | ( | ( | |
Dividends paid to non-controlling interests in subsidiaries | ( | ( | ||
Net cash outflow from financing activities | ( | ( | ||
Net decrease in cash and cash equivalents | ( | ( | ||
Cash and cash equivalents at 1 January | 14 | |||
Effects of exchange rate changes on cash and cash equivalents | ( | |||
Cash and cash equivalents at 31 December | 14 | |||
1 | Restated to reclassify Proceeds from sale of financial assets held at amortised cost from net cash flows from investing activities to net cash flows |
1
1
from operating activities. See Note 1a.
The Notes and information on pages 176 to 246 form part of these Consolidated Financial Statements.
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Consolidated Statement of Cash Flows
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
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iv. Summary of significant accounting policies
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1. Accounting policies continued
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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1. Accounting policies continued
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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1. Accounting policies continued
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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1. Accounting policies continued
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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1. Accounting policies continued
| Restated | |||||
| Year ended | (Decrease)/increase | year ended | |||
| 31 December | 31 December | ||||
| 2022 | Adj 1 | Adj 2 | Adj 3 | 2022 | |
£’Million | £’Million | £’Million | £’Million | £’Million | |
Insurance premium income | 33.7 | (33.7) | – | – | – |
Less premiums ceded to reinsurers | (23.3) | 23.3 | – | – | – |
Net insurance premium income | 10.4 | (10.4) | – | – | – |
Fee and commission income | 1,954.2 | – | (24.6) | – | 1,929.6 |
Investment return | (13,771.9) | 41.6 | – | (27.6) | (13,757.9) |
Net expense | (11,807.3) | 31.2 | (24.6) | (27.6) | (11,828.3) |
| Policy claims and benefits | |||||
– Gross amount | (48.0) | 48.0 | – | – | – |
– Reinsurers’ share | 14.6 | (14.6) | – | – | – |
Net policyholder claims and benefits incurred | (33.4) | 33.4 | – | – | – |
| Change in insurance contract liabilities | |||||
– Gross amount | 88.8 | (88.8) | – | – | – |
– Reinsurers’ share | (16.0) | 16.0 | – | – | – |
Net change in insurance contract liabilities | 72.8 | (72.8) | – | – | – |
Movement in investment contract benefits | 13,734.8 | – | 24.6 | – | 13,759.4 |
Expenses | (1,966.2) | 4.5 | – | 12.5 | (1,949.2) |
Insurance revenue | – | 26.5 | – | – | 26.5 |
Insurance service expenses | – | (13.5) | – | – | (13.5) |
Net reinsurance expense | – | (9.6) | – | – | (9.6) |
Net insurance finance income | – | 2.4 | – | – | 2.4 |
Other finance income | – | – | – | 15.1 | 15.1 |
Profit before tax | 0.7 | 2.1 | – | – | 2.8 |
Tax attributable to policyholders’ returns | 501.1 | – | – | – | 501.1 |
Profit before tax attributable to shareholders’ returns | 501.8 | 2.1 | – | – | 503.9 |
Total tax credit | 404.7 | (0.3) | – | – | 404.4 |
Less: tax attributable to policyholders’ returns | (501.1) | – | – | – | (501.1) |
Tax attributable to shareholders’ returns | (96.4) | (0.3) | – | – | (96.7) |
Profit and total comprehensive income for the year | 405.4 | 1.8 | – | – | 407.2 |
Profit attributable to non-controlling interests | 0.4 | – | – | – | 0.4 |
Profit attributable to equity shareholders | 405.0 | 1.8 | – | – | 406.8 |
Profit and total comprehensive income for the year | 405.4 | 1.8 | – | – | 407.2 |
Pence | Pence | ||||
Basic earnings per share | 74.6 | 75.0 | |||
Diluted earnings per share | 73.9 | 74.3 |
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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| Equity attributable to owners | |||
| of the Parent Company | |||
| Retained | |||
earnings | Total | Total equity | |
| Increase | £’Million | £’Million | £’Million |
At 1 January 2022 | 9.6 | 9.6 | 9.6 |
Profit and total comprehensive income for the year | 1.8 | 1.8 | 1.8 |
At 31 December 2022 | 11.4 | 11.4 | 11.4 |
| (Decrease)/ | Restated | Restated | ||
| 31 December | increase | 31 December | 1 January | |
| 2022 | Adj 1 | 2022 | 2022 | |
£’Million | £’Million | £’Million | £’Million | |
| Assets | ||||
Deferred acquisition costs | 337.3 | (0.7) | 336.6 | 378.9 |
Deferred tax assets | 13.9 | (1.4) | 12.5 | 19.5 |
Reinsurance assets | 66.4 | (11.8) | 54.6 | 74.8 |
Other receivables | 2,982.8 | (5.6) | 2,977.2 | 2,913.1 |
Total assets | 151,705.0 | (19.5) | 151,685.5 | 155,710.6 |
| Liabilities | ||||
Insurance contract liabilities | 483.5 | (13.0) | 470.5 | 568.6 |
Other payables | 2,198.6 | (17.9) | 2,180.7 | 2,579.3 |
Total liabilities | 150,444.6 | (30.9) | 150,413.7 | 154,581.8 |
Net assets | 1,260.4 | 11.4 | 1,271.8 1,128.8 |
| Increase/ | Restated | ||
| 31 December | (decrease) | 31 December | |
| 2022 | Adj 4 | 2022 | |
£’Million | £’Million | £’Million | |
| Cash flows from operating activities | |||
Cash (used in)/generated from operations | (975.1) | 262.5 | (712.6) |
Net cash outflow from operating activities | (1,053.1) | 262.5 | (790.6) |
| Cash flows from investing activities | |||
Proceeds from sale of financial assets held at amortised cost | 262.5 | (262.5) | – |
Net cash inflow/(outflow) from investing activities | 232.5 | (262.5) | (30.0) |
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1. Accounting policies continued
| Restated | |
| 1 January | |
| 2022 | |
| £’Million | |
| Assets | |
Goodwill | 29.6 |
Deferred acquisition costs | 378.9 |
| Intangible assets | |
– Acquired value of in-force business | 14.4 |
– Computer software | 27.0 |
Property and equipment | 154.5 |
Deferred tax assets | 19.5 |
Investment in associates | 1.4 |
Reinsurance assets | 74.8 |
Other receivables | 2,913.1 |
| Investments | |
– Investment property | 1,568.5 |
– Equities | 106,782.3 |
– Fixed income securities | 29,305.9 |
– Investments in Collective Investment Schemes | 5,513.2 |
– Derivative financial instruments | 1,094.6 |
Cash and cash equivalents | 7,832.9 |
Total assets | 155,710.6 |
| Liabilities | |
Borrowings | 433.0 |
Deferred tax liabilities | 649.8 |
Insurance contract liabilities | 568.6 |
Deferred income | 562.6 |
Other provisions | 44.1 |
Other payables | 2,579.3 |
Investment contract benefits | 110,349.8 |
Derivative financial instruments | 1,019.5 |
Net asset value attributable to unit holders | 38,369.0 |
Income tax liabilities | 6.1 |
Total liabilities | 154,581.8 |
Net assets | 1,128.8 |
| Shareholders' equity | |
Share capital | 81.1 |
Share premium | 213.8 |
Treasury shares reserve | (8.5) |
Miscellaneous reserves | 2.5 |
Retained earnings | 839.9 |
Shareholders' equity | 1,128.8 |
Non-controlling interests | – |
Total equity | 1,128.8 |
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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2. Critical accounting estimates and
judgements in applying accounting
policies
Estimates
Critical accounting estimates are those which give rise
to a significant risk of material adjustment to the balances
recognised in the Financial Statements within the next
12 months. The Group’s critical accounting estimates
relate to:
and reinsurance assets;
securities and equities; and
provision.
Estimates are also applied in calculating other assets of
the Financial Statements, including determining the value
of deferred tax assets, investment contract benefits, the
operational readiness prepayment and other provisions.
Determining the value of insurance contract liabilities
and reinsurance assets
In accordance with IFRS 17, the Group has used the following
assumptions in the calculation of insurance contract
liabilities and reinsurance assets:
on current risk-free swap rates;
the results of an investigation of experience during the
year;
is based on actual expenses in 2023 and expected rates
in 2024 and over the long term;
investigation of experience during the year; and
of capital approach with a 3% charge (2022: 3%). There
has been no change during the period.
Further details of the valuation of insurance contract
liabilities and reinsurance assets, including sensitivity
analysis, are set out in Note 17.
Determining the fair value of investment property
In accordance with IAS 40, the Group initially recognises
investment properties at cost, and subsequently
remeasures its portfolio to fair value in the Statement of
Financial Position. Fair value is determined at least monthly
by professional external valuers. It is based on anticipated
market values for the properties in accordance with the
guidance issued by the Royal Institution of Chartered
Surveyors (RICS), being the estimated amount that would
be received from a sale of the assets in an orderly
transaction between market participants.
The valuation of investment property is inherently
subjective as it requires, among other factors, assumptions
o be made regarding the ability of existing tenants to meet
their rental obligations over the entire life of their leases, the
estimation of the expected rental income into the future,
the assessment of a property’s potential to remain as
an attractive technical configuration to existing and
prospective tenants in a changing market and a
judgement on the attractiveness of a building, its location
and the surrounding environment. Wherever appropriate,
sustainability and environmental matters are an integral
part of the valuation approach. In a valuation context,
sustainability encompasses a wide range of physical,
social, environmental and economic factors that can affect
value. The range of issues includes key environmental risks,
such as flooding, energy efficiency and climate, as well as
design, configuration, accessibility, legislation, management
and fiscal considerations – and, additionally, current and
historical land use. As such, investment properties are
classified as Level 3 in the IFRS 13 fair value hierarchy
because they are valued using techniques which are not
based on observable inputs.
Further details of the valuation of investment properties,
including sensitivity analysis, are set out in Note 20.
Determining the fair value of Level 3 fixed income
securities and equities
In accordance with IFRS 9, the Group elects to classify
its portfolio of policyholder fixed income securities at fair
value through profit and loss to match the accounting for
policyholder liabilities. Its portfolio of equities is required to
be held at fair value through profit and loss. As a result, all
fixed income securities and equities are held at fair value,
with the best evidence of the fair value at initial recognition
typically being the transaction price, i.e. the fair value
of the consideration given or received.
A number of investments are held in private credit and
private equity assets, which are recognised within fixed
income securities and within equities, respectively, on the
Consolidated Statement of Financial Position. The fair value
of these assets is determined following a monthly valuation
process which uses two different valuation models and
includes verification by professional external valuers. The
models use suitable market comparatives and an estimate
of future cash flows expected to flow from the issuing entity.
The valuations are inherently subjective as they require a
number of assumptions to be made, such as determining
which entities provide suitable market comparatives and
their relevant performance metrics (for example earnings
before interest, tax, depreciation and amortisation),
determining appropriate discount rates and cash flow
forecasts to use in models, the weighting to apply to each
valuation methodology, and the point in the range of
valuations to select as the fair value. As the inputs to the
valuation models are unobservable, the investments
in private credit and private equity assets are classified
as Level 3 in the IFRS 13 fair value hierarchy.
Following the invasion of Ukraine by Russia, sanctions
and trading restrictions were placed on foreign investors.
As a result, fair value pricing was applied to Russian assets
that represents a significant markdown in the value of
these assets.
Further detail about the valuation models, including
sensitivity analysis, is set out in Note 20.
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2. Critical accounting estimates and
judgements in applying accounting
policies
continued
Determining the value of an Ongoing Service Evidence
provision
The Group has committed to review the sub-population of
clients that has been charged for ongoing advice services
since the start of 2018 but where the evidence of delivery
falls below the acceptable standard. Where the standard
of evidence is deemed by the Group to be marginal the
Group will invite clients to join the review (the “Opt-In
population”), but where the standard of evidence is
deemed to be poor the Group will include clients in the
review unless instructed otherwise (the “Opt-Out
population”).
In accordance with IAS 37, and reflecting an initial
assessment of a statistically credible representative cohort
of clients undertaken by a skilled person, the Group has
quantified the Ongoing Service Evidence provision as the
best estimate of the amount necessary to settle the
present obligation, taking into account the associated
risks and uncertainties.
The period for the review has been determined by the
Group to commence from 2018 following an assessment
of the regulatory regime in force during this period and the
requirement to retain evidence of delivery for this period
of time.
Key estimates and assumptions in assessing the estimated
value are:
initial assessment, of a statistically credible representative
cohort of client records, can be extrapolated to the
wider review population;
invitation, taking into account industry experience; and
and wider market experience of similar exercises can be
used to estimate the cost to fulfil the exercise.
Further details of the provision, including sensitivity
analysis, are set out in Note 18.
Judgements
The primary areas in which the Group has applied
judgement are as follows:
Consolidation
Entities are consolidated within the Group Financial
Statements if they are controlled by the Group. Control
exists if the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and the Group
has the ability to affect those returns through its power
over the entity. Significant judgement can be involved in
determining whether the Group controls an entity, such
as in the case of the structured entity set up for the Group’s
securitisation transaction, SJP Partner Loans No.1 Limited,
and for the Group’s unit trusts.
A structured entity is one that has been designed so that
voting or similar rights are not the dominant factor in
deciding who controls the entity. As a result, factors such
as whether a Group entity is able to direct the relevant
activities of the entity and the extent to which the Group is
exposed to variability of returns are considered. In the case
of SJP Partner Loans No.1 Limited, it was determined that the
Group does control the entity and hence it is consolidated.
This is due to an entity in the Group holding the junior
tranche of loan notes, hence being subject to variability
of returns, and the same entity being able to direct the
relevant activities of the structured entity through its role
of servicer to the securitised portfolio.
Unit trusts are consolidated when the Group holds more
than 30% of the units in that unit trust. This is the threshold
at which the Group is considered to achieve control, having
regard to factors such as:
St. James’s Place Unit Trust Group Limited, the unit trust
manager;
manager; and
holdings in the unit trusts and its ability to influence
the unit trust manager’s remuneration.
Determining non-performing business loans
to Partners
Business loans to Partners are considered to be non-
performing (Stage 3), in the context of the definition
prescribed by IFRS 9, if they are in default. This is defined
as a loan to either:
significant risk of leaving the Partnership and where
an orderly settlement of debt is considered to be in
question.
Determining the derecognition of business loans
to Partners
Business loans to Partners are derecognised, in the context
of the definition prescribed by IFRS 9, when:
without material delay to a third party under a ‘pass-
through’ arrangement; and
and rewards of owning the assets.
See Note 15 for further information on the derecognition
of business loans to Partners.
Determining the value of insurance contract liabilities
and reinsurance assets on transition to IFRS 17
The fair value on transition has been derived in accordance
with IFRS 13 Fair Value Measurement and represents the price
a market participant would require to assume the liabilities
in an orderly transaction. Fair value has been determined
based on the Solvency II best estimate liability, together
with an additional margin for risk calculated using a cost
of capital approach. The Solvency II best estimate liability
utilises economic assumptions based on relevant market
information, together with non-economic assumptions
including lapse rates, expenses and mortality rates.
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3. Segment reporting
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the Board, in order to allocate resources to each segment and
assess its performance.
The Group’s only reportable segment under IFRS 8 is a ‘wealth management’ business – which is a business providing
support to our clients through the provision of financial advice and assistance through our Partner network, and financial
solutions including (but not limited to) wealth management products manufactured in the Group, such as insurance
bonds, pensions, unit trust and ISA investments, and a discretionary fund management (DFM) service.
Separate geographical segmental information is not presented since the Group does not segment its business
geographically. Most of its customers are based in the United Kingdom, as is management of the assets. In particular,
the operation based in Asia is not yet sufficiently material for separate consideration.
Segment revenue
Revenue received from fee and commission income is set out in Note 4, which details the different types of revenue
received from our wealth management business.
Segment profit
Two separate measures of profit are monitored on a monthly basis by the Board. These are the post-tax Underlying cash
result and the pre-tax European Embedded Value (EEV) profit, both of which are alternative performance measures.
Further details can be found within the Glossary of Alternative Performance Measures section.
Underlying cash result
The measure of cash profit monitored on a monthly basis by the Board is the post-tax Underlying cash result. This reflects
emergence of cash available for paying a dividend during the year. Underlying cash is based on the IFRS result excluding
the impact of intangibles, principally DAC, DIR, PVIF, goodwill, deferred tax, and strategic expenses. As the cost associated
with equity-settled share-based payments is reflected in changes in shareholder equity, they are also not included in the
Underlying cash result.
More detail is provided in Section 2.2 of the financial review.
The Cash result should not be confused with the IFRS Consolidated Statement of Cash Flows, which is prepared in
accordance with IAS 7.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Underlying cash result after tax | 392.4 | 410.1 |
Equity-settled share-based payments | (5.4) | (20.5) |
Deferred tax impacts | (24.9) | (30.5) |
Ongoing Service Evidence provision | (323.7) | – |
Impact in the year of DAC/DIR/PVIF | 3.1 | (9.3) |
Impact of policyholder tax asymmetry (see Note 4) 1 | (44.4) | 50.6 |
| Other | (7.0) | 6.8 |
IFRS (loss)/profit after tax | (9.9) | 407.2 |
| Shareholder tax | 5.4 | 96.7 |
(Loss)/profit before tax attributable to shareholders’ returns | (4.5) | 503.9 |
Tax attributable to policyholder returns | 444.1 | (501.1) |
IFRS profit before tax | 439.6 | 2.8 |
1
2
2
1 Further information on policyholder tax asymmetry can also be found in Section 2.1 of the financial review.
2 Restated to reflect the adoption of IFRS 17. See Note 1a.
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3. Segment reporting continued
EEV operating profit
EEV operating profit is monitored on a monthly basis by the Board. The components of the EEV operating profit are included
in more detail in the financial review within the Annual Report and Accounts.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
EEV operating (loss)/profit before tax after exceptional items | (1,891.6) | 1,589.7 |
Investment return variance | 501.7 | (1,314.0) |
Economic assumption changes | 2.5 | 235.1 |
EEV (loss)/profit before tax | (1,387.4) | 510.8 |
| Adjustments to IFRS basis: | ||
Deduct: amortisation of purchased value of in-force business | (3.2) | (3.2) |
Movement of balance sheet life value of in-force business (net of tax) 1 | 2,769.6 | 105.6 |
Movement of balance sheet unit trust and DFM value of in-force business (net of tax) | 226.0 | (94.9) |
Movement of balance sheet other value of in-force business (net of tax) | (1,918.9) | – |
Tax on movement in value of in-force business | 309.4 | (14.4) |
(Loss)/profit before tax attributable to shareholders’ returns | (4.5) | 503.9 |
Tax attributable to policyholder returns | 444.1 | (501.1) |
IFRS profit before tax | 439.6 | 2.8 |
1
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
The movement in life, unit trust and DFM, and other value of in-force business is the difference between the opening and
closing discounted value of the profits that will emerge from the in-force book over time, after adjusting for DAC and DIR
impacts which are already included under IFRS.
Segment assets
Funds under management (FUM)
FUM, as reported in Section 1 of the financial review, is the measure of segment assets which is monitored on a monthly
basis by the Board.
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Investment | 35,990.0 | 33,290.0 |
Pension | 87,320.0 | 73,860.0 |
Unit trust/ISA and DFM | 44,890.0 | 41,220.0 |
Total FUM | 168,200.0 | 148,370.0 |
Exclude client and third-party holdings in non-consolidated unit trusts and DFM | (4,360.4) | (4,407.3) |
Other | 3,968.2 | 4,153.6 |
Gross assets held to cover unit liabilities | 167,807.8 | 148,116.3 |
| IFRS intangible assets | 399.6 | 476.9 |
Shareholder gross assets | 4,085.7 | 3,092.3 |
Total assets | 172,293.1 | 151,685.5 |
1
1
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
Other represents liabilities included within the underlying unit trusts. The unit trust liabilities form a reconciling item
between total FUM, which is reported net of these liabilities, and total assets, which exclude these liabilities.
More detail on IFRS intangible assets and shareholder gross assets is provided in Section 2.2 of the financial review.
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4. Fee and commission income
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Advice charges (post RDR) | 954.3 | 987.6 |
Third-party fee and commission income | 132.4 | 131.9 |
| Wealth management fees | 1,065.0 | 1,014.4 |
Investment management fees | 68.4 | 60.8 |
Fund tax deductions/(refunds) | 444.1 | (501.1) |
Policyholder tax asymmetry | (44.4) | 50.6 |
Discretionary fund management fees | 23.6 | 23.4 |
Fee and commission income before DIR amortisation | 2,643.4 | 1,767.6 |
Amortisation of DIR | 145.5 | 162.0 |
Total fee and commission income | 2,788.9 | 1,929.6 |
1
1
1 Restated to reclassify balances between wealth management fees and movement in investment contract benefits. See Note 1a.
Advice charges are received from clients for the provision of initial and ongoing advice in relation to a post-Retail
Distribution Review (RDR) investment into a St. James’s Place or third-party product.
Third-party fee and commission income is received from the product provider where an investment has been made
into a third-party product.
Wealth management fees represent charges levied on manufactured business.
Investment management fees are received from clients for the provision of all aspects of investment management.
Broadly, investment management fees match investment management expenses.
Fund tax deductions/(refunds) represent amounts credited to, or deducted from, the life insurance business to match
policyholder tax credits or charges. Market conditions will impact the level of fund tax deductions/(refunds). This may lead
to significant year on year movements when markets are volatile.
Life insurance tax incorporates a policyholder tax element, and the financial statements of a life insurance group need
to reflect the liability to HMRC, with the corresponding deductions incorporated into policy charges (‘Fund tax deductions/
(refunds)’ in the table above). 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 IFRS Consolidated Statement of Financial Position between the deferred tax position and the
offsetting client balance. The net tax asymmetry 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.
Market conditions and other macroeconomic factors will impact the level of asymmetry experienced in a year and may be
significant where there is volatility. These drivers in 2023 resulted in a significant negative movement reversing the positive
impact seen in 2022.
Discretionary fund management fees are received from clients for the provision of DFM services.
Where an investment has been made in a St. James’s Place product, the initial product charge and any dealing margin
is deferred and recognised as a deferred income liability. This liability is extinguished, and income recognised, over the
expected life of the investment. The income is the amortisation of DIR in the table above.
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| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Payments to Partners | 1,013.2 | 1,011.8 |
| Fees payable to the Company’s auditors and its associates: | ||
For the audit of the Company and Consolidated Financial Statements | 0.4 | 0.4 |
| For other services: | ||
– Audit of the Company’s subsidiaries (excluding unit trusts) | 0.9 | 0.6 |
– Audit of the Company’s unit trusts | 0.8 | 0.7 |
– Audit-related assurance services | 0.7 | 0.5 |
– Other assurance services | 0.2 | 0.1 |
Total fees payable to the Company’s auditors and its associates | 3.0 | 2.3 |
| Employee costs: | ||
Wages and salaries | 208.2 | 194.9 |
Social security costs | 21.8 | 22.3 |
Other pension costs | 18.2 | 15.9 |
Cost of employee share awards and options | 5.2 | 21.1 |
Total employee costs | 253.4 | 254.2 |
Average monthly number of persons employed by the Group during the year | 2,942 | 2,669 |
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| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| Attributable to unit-linked investment contract benefits: | £’Million | £’Million |
Rental income | 69.9 | 70.1 |
Loss on revaluation of investment properties | (44.9) | (244.5) |
Net investment return on financial instruments classified as fair value through profit and loss 1 | 13,013.4 | (9,416.3) |
13,038.4 | (9,590.7) | |
Income/(expense) attributable to third-party holdings in unit trusts | 3,092.5 | (4,168.7) |
Investment return on net assets held to cover unit liabilities | 16,130.9 | (13,759.4) |
Net investment return on financial instruments classified as fair value through profit and loss 2 | 60.2 | (8.2) |
| Net investment return on financial instruments held at amortised cost | 6.5 | 9.7 |
Investment return on shareholder assets | 66.7 | 1.5 |
Total investment return | 16,197.6 | (13,757.9) |
2023 | 2022 | |
£’Million | £’Million | |
Balance at 1 January | 106,964.7 | 110,349.8 |
Deposits | 11,842.3 | 12,194.6 |
Withdrawals | (7,459.6) | (5,645.1) |
Movement in unit-linked investment contract benefits | 13,038.4 | (9,590.7) |
Fees and other adjustments | (1,236.0) | (343.9) |
Balance at 31 December | 123,149.8 | 106,964.7 |
Current | 6,584.5 | 5,546.3 |
Non-current | 116,565.3 | 101,418.4 |
| Movement in unit liabilities | 123,149.8 | 106,964.7 |
Unit-linked investment contract benefits | 13,038.4 | (9,590.7) |
Third-party unit trust holdings | 3,092.5 | (4,168.7) |
Movement in investment contract benefits in the Consolidated Statement of Comprehensive Income | 16,130.9 | (13,759.4) |
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7. Insurance revenue
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| Amounts relating to changes in liabilities for remaining coverage | £’Million | £’Million |
– Expected incurred claims and other insurance service expenses | 23.3 | 24.5 |
– Change in risk adjustment for non-financial risk for risk expired | 0.7 | 0.7 |
– CSM recognised for services provided | 1.3 | 1.3 |
Total insurance revenue | 25.3 | 26.5 |
8. Insurance service expenses
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| Amounts relating to changes in liabilities for remaining coverage | £’Million | £’Million |
– Incurred claims and other insurance service expenses | (24.5) | (13.5) |
Total insurance services expenses | (24.5) | (13.5) |
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Interest received on cash and cash equivalents | 17.8 | 5.2 |
Interest received on business loans to Partners | 31.0 | 22.3 |
Finance income | 48.8 | 27.5 |
Interest paid on external borrowings | (13.9) | (9.4) |
Interest paid on lease liabilities | (3.4) | (3.0) |
Finance costs | (17.3) | (12.4) |
Other finance income | 31.5 | 15.1 |
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| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
| Current tax | ||
| UK corporation tax | ||
– Current year charge | 222.8 | 66.0 |
– Adjustment in respect of prior year | (0.5) | 3.5 |
| Overseas taxes | ||
– Current year charge | 2.9 | 10.2 |
– Adjustment in respect of prior year | 0.1 | – |
| Deferred tax | 225.3 | 79.7 |
Unrealised capital gains/(losses) in unit-linked funds | 243.4 | (504.0) |
| Unrelieved expenses | ||
– Additional expenses recognised in the year | – | (9.9) |
– Utilisation in the year | 11.3 | 11.4 |
| Capital losses | ||
– Revaluation in the year | – | 4.0 |
– Utilisation in the year | 2.2 | 25.2 |
– Adjustment in respect of prior year | (0.1) | (4.5) |
DAC, DIR and PVIF | (7.8) | (8.5) |
Share-based payments | 8.1 | 3.3 |
Renewal income assets | (1.4) | (3.0) |
Fixed asset timing differences | 2.6 | 1.0 |
UK trading losses | (36.1) | – |
| Other items | 1.8 | (1.2) |
Overseas losses | 0.3 | 0.1 |
Adjustment in respect of prior year | (0.1) | 2.0 |
224.2 | (484.1) | |
Total tax charge/(credit) for the year | 449.5 | (404.4) |
| Attributable to: | ||
– policyholders | 444.1 | (501.1) |
– shareholders | 5.4 | 96.7 |
449.5 | (404.4) |
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10. Income and deferred taxes continued
| Year ended | Year ended | |||
| 31 December | 31 December | |||
| 2023 | 2022 | |||
£’Million | £’Million | |||
| Profit before tax | 439.6 | 2.8 | ||
Tax attributable to policyholders’ returns | (444.1) | 501.1 | ||
(Loss)/profit before tax attributable to shareholders’ returns | (4.5) | 503.9 | ||
Shareholder tax (credit)/charge at corporate tax rate of 23.5% (2022: 19%) | (1.1) | 23.5% | 95.7 | 19.0% |
| Adjustments: | ||||
Lower rates of corporation tax in overseas subsidiaries | (1.8) | 39.4% | (1.3) | (0.3%) |
Expected shareholder tax | (2.9) | 62.9% | 94.4 | 18.7% |
| Effects of: | ||||
Non-taxable income | (2.5) | (1.5) | ||
Revaluation of historic capital losses in the Group | – | 4.0 | ||
| Adjustment in respect of prior year | ||||
– Current tax | 1.0 | (3.8) | ||
– Deferred tax | (0.2) | (2.5) | ||
| Differences in accounting and tax bases in relation to employee | ||||
share schemes | 0.3 | 2.5 | ||
Impact of difference in tax rates between current and deferred tax | (2.3) | (3.0) | ||
Disallowable expenses | 4.3 | 5.6 | ||
Provision for future liabilities | 5.1 | 0.5 | ||
Tax losses not recognised | 1.9 | 2.2 | ||
| Other | 0.7 | (1.7) | ||
8.3 | (182.9%) | 2.3 | 0.5% | |
Shareholder tax charge | 5.4 | (120.0%) | 96.7 | 19.2% |
Policyholder tax charge/(credit) | 444.1 | (501.1) | ||
Total tax charge/(credit) for the year | 449.5 | (404.4) |
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| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Current tax charge for the year | 225.3 | 79.7 |
Refunds due to be received in future years in respect of current year | 1.7 | 39.5 |
(Refunds received)/payments made in current year in respect of prior years | (39.7) | 1.6 |
Other | (7.9) | 0.3 |
Tax paid | 179.4 | 121.1 |
| Tax paid can be analysed as: | ||
– Taxes paid in UK | 156.4 | 110.1 |
– Taxes paid in overseas jurisdictions | 6.2 | 3.9 |
– Withholding taxes suffered on investment income received | 16.8 | 7.1 |
Total | 179.4 | 121.1 |
| Credit/(charge) to | |||||||
| the Statement of | Expected | ||||||
| Comprehensive Income | utilisation period | ||||||
| As at | Utilised and | Reanalysis to | As at | As at | |||
| 1 January | created in | Total credit/ | Impact of | deferred tax | 31 December | 31 December | |
| 2023 | year | (charge) | acquisitions | liabilities | 2023 | 2023 | |
£’Million | £’Million | £’Million | £’Million | £’Million | £’Million | ||
Deferred acquisition costs (DAC) | (20.4) | 1.8 | 1.8 | – | – | (18.6) | 14 years |
Deferred income (DIR) | 37.7 | (2.6) | (2.6) | – | – | 35.1 | 14 years |
Fixed asset temporary differences | 3.9 | (2.6) | (2.6) | – | – | 1.3 | 6 years |
Renewal income assets | (20.7) | 1.5 | 1.5 | (0.7) | – | (19.9) | 20 years |
Share-based payments | 12.9 | (8.1) | (8.1) | – | – | 4.8 | 3 years |
UK trading losses | – | 36.1 | 36.1 | – | – | 36.1 | 1 years |
| Other temporary differences | (0.9) | (2.3) | (2.3) | 0.9 | – | (2.3) | – |
Total | 12.5 | 23.8 | 23.8 | 0.2 | – | 36.5 | |
| (Charge)/credit to | |||||||
| the Statement of | Expected | ||||||
| Comprehensive Income | utilisation period | ||||||
| As at | Utilised and | Total | Reanalysis to | As at | As at | ||
| 1 January | created in | (charge)/ | Impact of | deferred tax | 31 December | 31 December | |
| 2022 | year | credit | acquisitions | liabilities | 2022 | 2022 | |
£’Million | £’Million | £’Million | £’Million | £’Million | £’Million | ||
Deferred acquisition costs (DAC) | (21.6) | 1.2 | 1.2 | – | – | (20.4) | 14 years |
Deferred Income (DIR) | 37.8 | (0.1) | (0.1) | – | – | 37.7 | 14 years |
Fixed asset temporary differences | 7.8 | (3.9) | (3.9) | – | – | 3.9 | 6 years |
Renewal income assets | (19.4) | 3.1 | 3.1 | (4.4) | – | (20.7) | 20 years |
Share-based payments | 16.2 | (3.3) | (3.3) | – | – | 12.9 | 3 years |
| Other temporary differences | (1.3) | 0.9 | 0.9 | – | (0.5) | (0.9) | – |
Total | 19.5 | (2.1) | (2.1) | (4.4) | (0.5) | 12.5 |
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10. Income and deferred taxes continued
| Charge/(credit) to the statement | Expected | |||||||
| of Comprehensive Income | Reanalysis | utilisation period | ||||||
| As at | Utilised and | Total | Impact of | from | As at | As at | ||
| 1 January | created in | charge/ | tax rate | Impact of | deferred tax | 31 December | 31 December | |
| 2023 | year | (credit) | change | acquisitions | assets | 2023 | 2023 | |
£’Million | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million | ||
| Capital losses | ||||||||
(available for future relief) | (2.1) | 2.1 | 2.1 | – | – | – | – | – |
Deferred acquisition costs (DAC) | 20.2 | (7.9) | (7.9) | – | – | – | 12.3 | 14 years |
| Purchased value of in-force | ||||||||
business (PVIF) | 2.8 | (0.8) | (0.8) | – | – | – | 2.0 | 2 years |
Unrealised capital gains on life insurance (BLAGAB) assets | ||||||||
backing unit liabilities | 180.1 | 243.3 | 243.3 | – | – | – | 423.4 | 6 years |
| Unrelieved expenses on life | ||||||||
insurance business | (37.5) | 11.3 | 11.3 | – | – | – | (26.2) | 5 years |
Other temporary differences | (0.6) | 0.1 | 0.1 | – | 0.7 | – | 0.2 | – |
Total | 162.9 | 248.1 | 248.1 | – | 0.7 | – | 411.7 | |
| Charge/(credit) to the statement | Expected | |||||||
| of Comprehensive Income | Reanalysis | utilisation period | ||||||
| As at | Utilised and | Total | Impact of | from | As at | As at | ||
| 1 January | created in | charge/ | tax rate | Impact of | deferred tax | 31 December | 31 December | |
| 2022 | year | (credit) | change | acquisitions | assets | 2022 | 2022 | |
£’Million | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million | ||
| Capital losses | ||||||||
(available for future relief) | (26.8) | 20.7 | 24.7 | 4.0 | – | – | (2.1) | 1 year |
Deferred acquisition costs (DAC) | 28.0 | (7.8) | (7.8) | – | – | – | 20.2 | 14 years |
| Purchased value of in-force | ||||||||
business (PVIF) | 3.4 | (0.6) | (0.6) | – | – | – | 2.8 | 3 years |
Unrealised capital gains on life insurance (BLAGAB) assets | ||||||||
backing unit liabilities | 684.1 | (504.0) | (504.0) | – | – | – | 180.1 | 6 years |
| Unrelieved expenses on life | ||||||||
insurance business | (39.1) | 1.6 | 1.6 | – | – | – | (37.5) | 6 years |
Other temporary differences | 0.2 | (0.3) | (0.3) | – | – | (0.5) | (0.6) | – |
Total | 649.8 | (490.4) | (486.4) | 4.0 | – | (0.5) | 162.9 | |
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| Computer | |||||
| Purchased | software and | ||||
| value of | other specific | ||||
| in-force | software | ||||
| Goodwill | business | developments | DAC | DIR | |
£’Million | £’Million | £’Million | £’Million | £’Million | |
| Cost | |||||
| At 1 January 2022 | 31.1 | 73.4 | 55.3 | 1,143.5 | (1,599.1) |
| Additions | 5.5 | – | 16.1 | 37.2 | (129.8) |
| Disposals | – | – | (0.5) | (130.1) | 93.9 |
At 31 December 2022 | 36.6 | 73.4 | 70.9 | 1,050.6 | (1,635.0) |
Additions | – | – | 10.9 | 39.9 | (106.6) |
Disposals | – | – | (16.2) | (144.7) | 105.3 |
At 31 December 2023 | 36.6 | 73.4 | 65.6 | 945.8 | (1,636.3) |
| Accumulated amortisation and impairment | |||||
At 1 January 2022 | 1.5 | 59.0 | 28.3 | 764.6 | (1,036.5) |
| Charge for the year | 1.5 | 3.2 | 9.8 | 79.5 | (162.0) |
| Eliminated on disposal | – | – | (0.5) | (130.1) | 93.9 |
At 31 December 2022 | 3.0 | 62.2 | 37.6 | 714.0 | (1,104.6) |
Charge for the year | – | 3.2 | 15.4 | 72.1 | (145.5) |
Eliminated on disposal | – | – | (15.4) | (144.7) | 105.3 |
At 31 December 2023 | 3.0 | 65.4 | 37.6 | 641.4 | (1,144.8) |
| Carrying value | |||||
At 1 January 2022 | 29.6 | 14.4 | 27.0 | 378.9 | (562.6) |
At 31 December 2022 | 33.6 | 11.2 | 33.3 | 336.6 | (530.4) |
At 31 December 2023 | 33.6 | 8.0 | 28.0 | 304.4 | (491.5) |
Current | – | 3.2 | 5.3 | 63.3 | (137.0) |
Non-current | 33.6 | 4.8 | 22.7 | 241.1 | (354.5) |
| Outstanding amortisation period | 33.6 | 8.0 | 28.0 | 304.4 | (491.5) |
At 31 December 2022 | N/A | 3 years | 5 years | 14 years | 6 to 14 years |
At 31 December 2023 | N/A | 2 years | 5 years | 14 years | 6 to 14 years |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Edwards Wealth Ltd (formerly JEWM Ltd) | 4.8 | 4.8 |
Lewington Wealth Management Limited | 0.5 | 0.5 |
Policy Services companies | 7.7 | 7.7 |
Rowan Dartington companies | 1.8 | 1.8 |
SJP Asia companies | 10.1 | 10.1 |
Technical Connection Limited | 3.7 | 3.7 |
Thompson Private Clients Limited | 0.7 | 0.7 |
Willson Grange businesses | 4.3 | 4.3 |
Total goodwill | 33.6 | 33.6 |
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| Fixtures, fittings | ||||
| and office | Computer | Leased assets: | ||
| equipment | equipment | properties | Total | |
£’Million | £’Million | £’Million | £’Million | |
| Cost | ||||
At 1 January 2022 | 56.1 | 6.7 | 158.6 | 221.4 |
Additions | 2.0 | 2.0 | 9.8 | 13.8 |
Acquisition of subsidiary | – | – | 0.2 | 0.2 |
Disposals | (1.9) | (0.1) | (0.6) | (2.6) |
At 31 December 2022 | 56.2 | 8.6 | 168.0 | 232.8 |
Additions | 9.7 | 1.5 | 24.4 | 35.6 |
Revaluations | – | – | (2.3) | (2.3) |
Acquisition of subsidiary | 0.3 | 0.1 | 0.3 | 0.7 |
Disposals | (2.3) | (0.2) | (9.5) | (12.0) |
At 31 December 2023 | 63.9 | 10.0 | 180.9 | 254.8 |
| Accumulated depreciation | ||||
At 1 January 2022 | 23.9 | 4.7 | 38.3 | 66.9 |
Charge for the year | 5.2 | 1.3 | 15.2 | 21.7 |
Acquisition of subsidiary | – | – | 0.2 | 0.2 |
Eliminated on disposal | (1.5) | (0.1) | (0.1) | (1.7) |
At 31 December 2022 | 27.6 | 5.9 | 53.6 | 87.1 |
Charge for the year | 5.9 | 1.7 | 16.4 | 24.0 |
Acquisition of subsidiary | 0.3 | – | – | 0.3 |
Eliminated on disposal | (2.0) | (0.1) | (7.6) | (9.7) |
At 31 December 2023 | 31.8 | 7.5 | 62.4 | 101.7 |
| Net book value | ||||
At 1 January 2022 | 32.2 | 2.0 | 120.3 | 154.5 |
At 31 December 2022 | 28.6 | 2.7 | 114.4 | 145.7 |
At 31 December 2023 | 32.1 | 2.5 | 118.5 | 153.1 |
| Depreciation period (estimated useful life) | ||||
At 31 December 2022 | 5 to 15 years | 3 years | 1 to 19 years | |
At 31 December 2023 | 5 to 15 years | 3 years | 1 to 19 years |
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13. Leases
This note provides information on leases where the Group is a lessee. For information on leases where the Group is a lessor,
refer to Note 14.
The Group’s leasing activities and how these are accounted for
The Group leases a portfolio of office properties, equipment and vehicles. The exemptions available under IFRS 16 for
low-value or short-term leases have been applied to all leased equipment and vehicles, and so the leased assets and
lease liabilities on the Consolidated Statement of Financial Position, and the depreciation charge for leased assets and
interest expense on lease liabilities in the Consolidated Statement of Comprehensive Income, relate to the Group’s
portfolio of office properties only.
Leases are negotiated on an individual basis and hence contain a variety of different terms and conditions. They contain
covenants and restrictions but generally these are standard and to be expected in a modern, commercial lease created
under open-market terms. Typical covenants include paying the annual rent, insurance premiums, service charge,
rates and VAT and keeping the property in good repair and condition throughout the lease. Typical restrictions include
permitting office use only and not transferring or assigning the lease to a third party without the lessor’s consent. There
are no residual value guarantees.
The Group is exposed to variability in lease payments, as a number of leases include rent reviews during the lease term
which are linked to an index or to market rates. In accordance with IFRS 16, these variable lease payments are initially
measured based on the index or rate at the commencement date of the lease. Estimates of future rent changes are
not made; these changes are taken into account in the lease liabilities and leased assets only when the lease payments
change and so the variability is resolved. There are no variable lease payments which are not linked to an index or to
market rates.
The Group has not entered into any sale and leaseback transactions.
Details regarding the accounting policies applied to leases are set out in Note 1: refer to policies (c)(ii) Lease expenses,
(n) Property and equipment and (aa) Other payables.
Amounts recognised in the Consolidated Statement of Financial Position
The following amounts are recognised in the Consolidated Statement of Financial Position.
| 31 December | 31 December | |
| 2023 | 2022 | |
| Within the property and equipment balance – refer to Note 12 | £’Million | £’Million |
Leased assets: properties | 118.5 | 114.4 |
| Within the other payables balance – refer to Note 16 | ||
Lease liabilities: properties | 120.5 | 116.6 |
A movement schedule for leased assets, setting out additions during the year and depreciation charged, is presented
in Note 12. A movement schedule for lease liabilities is presented below.
Amounts recognised in the Consolidated Statement of Comprehensive Income
The following amounts relating to leases are recognised within expenses in the Consolidated Statement of
Comprehensive Income.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Depreciation charge for leased assets: properties | 16.4 | 15.2 |
Interest expense on lease liabilities: properties | 3.4 | 3.0 |
Lease expense relating to short-term leases | 0.4 | 0.2 |
Lease expense relating to low-value assets | 2.1 | 1.4 |
Total lease expense for the year | 22.3 | 19.8 |
Total cash outflow for leases during the year | 17.6 | 16.8 |
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Reconciliation of lease liabilities: properties
The following movement schedule reconciles the opening and closing lease liabilities relating to properties in the
Consolidated Statement of Financial Position.
2023 | 2022 | |
£’Million | £’Million | |
Balance at 1 January | 116.6 | 124.1 |
Additions | 19.1 | 6.3 |
Disposals | (1.0) | – |
Interest charged | 3.4 | 3.0 |
Lease payments made | (17.6) | (16.8) |
Balance at 31 December | 120.5 | 116.6 |
The principal lease payments disclosed in the table below link to the principal lease payments set out in the Consolidated
Statement of Cash Flows as follows:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Interest payments | 3.4 | 3.0 |
Principal lease payments | 14.2 | 13.8 |
Lease payments made | 17.6 | 16.8 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
| Assets | ||
Investment property | 1,110.3 | 1,294.5 |
Equities | 116,761.5 | 103,536.0 |
Fixed income securities | 27,236.5 | 27,544.8 |
Investment in Collective Investment Schemes | 12,513.1 | 4,463.7 |
Cash and cash equivalents | 5,918.9 | 6,179.5 |
Other receivables | 846.9 | 1,604.8 |
Derivative financial instruments | 3,420.6 | 3,493.0 |
Total assets | 167,807.8 | 148,116.3 |
| Liabilities | ||
Other payables | 613.3 | 842.0 |
Derivative financial instruments | 3,073.0 | 3,266.3 |
Total liabilities | 3,686.3 | 4,108.3 |
Net assets held to cover linked liabilities | 164,121.5 | 144,008.0 |
Investment contract benefits | 123,149.8 | 106,964.7 |
Net asset value attributable to unit holders | 40,536.5 | 36,628.4 |
Unit-linked insurance contract liabilities | 435.2 | 414.9 |
Net unit-linked liabilities | 164,121.5 | 144,008.0 |
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2023 | 2022 | |
£’Million | £’Million | |
Balance at 1 January | 1,294.5 | 1,568.5 |
Capitalised expenditure on existing properties | 10.1 | 23.6 |
Disposals | (149.4) | (53.1) |
Changes in fair value | (44.9) | (244.5) |
Balance at 31 December | 1,110.3 | 1,294.5 |
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Rental income | 69.9 | 70.1 |
Direct operating expenses | 5.0 | 5.2 |
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| 31 December | 31 December | |
| 2023 | 2022 | |
| Undiscounted contractual rental income to be received in: | £’Million | £’Million |
Year 1 | 64.6 | 70.1 |
Year 2 | 58.2 | 67.6 |
Year 3 | 52.3 | 59.1 |
Year 4 | 47.2 | 52.3 |
Year 5 | 41.8 | 46.5 |
Year 6 onwards | 235.6 | 268.6 |
Total undiscounted contractual rental income to be received | 499.7 | 564.2 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Cash and cash equivalents not held to cover unit liabilities | 285.4 | 253.3 |
Balances held to cover unit liabilities | 5,918.9 | 6,179.5 |
Total cash and cash equivalents | 6,204.3 | 6,432.8 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Receivables in relation to unit liabilities excluding policyholder interests 1 | 956.0 | 440.5 |
Other receivables in relation to insurance and unit trust business 2 | 151.9 | 75.8 |
Operational readiness prepayment | 283.5 | 278.3 |
Advanced payments to Partners | 127.4 | 83.8 |
Other prepayments and accrued income 1 | 37.9 | 40.8 |
Business loans to Partners | 408.0 | 315.6 |
Renewal income assets | 138.3 | 115.5 |
Miscellaneous | 44.3 | 18.9 |
Total other receivables on the Solvency II Net Assets Balance Sheet | 2,147.3 | 1,369.2 |
Policyholder interests in other receivables (see Note 14) | 846.9 | 1,604.8 |
Other | 3.2 | 3.2 |
Total other receivables | 2,997.4 | 2,977.2 |
Current | 2,243.8 | 2,357.4 |
Non-current | 753.6 | 619.8 |
2,997.4 | 2,977.2 |
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15. Other receivables continued
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Business loans to Partners directly funded by the Group | 340.8 | 315.6 |
Securitised business loans to Partners | 67.2 | – |
Total business loans to Partners | 408.0 | 315.6 |
| Stage 2: | Stage 3: | |||
| Stage 1: | under- | non- | ||
| performing | performing | performing | Total | |
£’Million | £’Million | £’Million | £’Million | |
Gross balance at 1 January 2023 | 297.1 | 17.7 | 4.6 | 319.4 |
| Business loans to Partners classification changes: | ||||
– Transfer to underperforming | (11.9) | 11.9 | – | – |
– Transfer to non-performing | (3.2) | (0.2) | 3.4 | – |
– Transfer to performing | 4.2 | (3.5) | (0.7) | – |
New lending activity during the year | 195.0 | 16.9 | 0.7 | 212.6 |
Interest charged during the year | 26.2 | 3.1 | 0.8 | 30.1 |
Repayment activity during the year | (147.7) | (1.3) | (0.3) | (149.3) |
Gross balance at 31 December 2023 | 359.7 | 44.6 | 8.5 | 412.8 |
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| Stage 2: | Stage 3: | |||
| Stage 1: | under- | non- | ||
| performing | performing | performing | Total | |
£’Million | £’Million | £’Million | £’Million | |
Gross balance at 1 January 2022 | 500.5 | 21.0 | 4.1 | 525.6 |
| Business loans to Partners classification changes: | ||||
– Transfer to underperforming | (4.8) | 4.8 | – | – |
– Transfer to non-performing | (0.5) | (0.9) | 1.4 | – |
– Transfer to performing | 5.2 | (5.2) | – | – |
Sale to a third party during the year | (262.5) | – | – | (262.5) |
New lending activity during the year | 216.6 | 2.1 | 0.4 | 219.1 |
Interest charged during the year | 20.6 | 0.9 | 0.2 | 21.7 |
Repayment activity during the year | (178.0) | (5.0) | (1.5) | (184.5) |
Gross balance at 31 December 2022 | 297.1 | 17.7 | 4.6 | 319.4 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Gross business loans to Partners | 412.8 | 319.4 |
Provision | (4.8) | (3.8) |
Net business loans to Partners | 408.0 | 315.6 |
2023 | 2022 | |
£’Million | £’Million | |
Balance at 1 January | 115.5 | 102.5 |
Additions | 32.0 | 36.1 |
Disposals | (2.1) | (7.8) |
Revaluation | (7.1) | (15.3) |
Balance at 31 December | 138.3 | 115.5 |
| 31 December | 31 December | |
| 2023 | 2022 | |
Lapse rate – SJP Partner renewal income 1 | 5.0% to 15.0% | 5.0% to 15.0% |
| Lapse rate – non-SJP renewal income | 6.5% to 25.0% | 15.0% to 25.0% |
Discount rate | 11.8% | 12.0% to 13.7% |
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| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
| Payables in relation to unit liabilities excluding policyholder interests | 437.1 | 326.2 |
| Other payables in relation to insurance and unit trust business | 738.6 | 399.9 |
Accrual for ongoing advice fees | 150.0 | 133.2 |
Other accruals | 101.1 | 105.8 |
Contract payment | 84.2 | 95.8 |
Lease liabilities: properties (see Note 13) | 120.5 | 116.6 |
Other payables in relation to Partner payments | 75.1 | 74.8 |
Miscellaneous | 50.4 | 67.3 |
Total other payables on the Solvency II Net Assets Balance Sheet | 1,757.0 | 1,319.6 |
Policyholder interests in other payables (see Note 14) | 613.3 | 842.0 |
Other (see adjustment 2 on page 64) | 17.8 | 19.1 |
Total other payables | 2,388.1 | 2,180.7 |
| Current | 2,212.9 | 2,000.6 |
Non-current | 175.2 | 180.1 |
2,388.1 | 2,180.7 |
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Risk | Description | Management |
| Underwriting | Failure to price appropriately | The Group ceased writing new protection business in April 2011 and the |
| for a risk, or the impact of | remaining UK insurance risk is substantially covered by quota share | |
| anti-selection. | reinsurance with a low level of retention. Experience is monitored regularly | |
| and for most business the premium or deduction rates can be reviewed. | ||
| Epidemic/ | An unusually large number of | Protection is provided through reinsurance. The Group has quota share |
| disaster | claims arising from a single | reinsurance on the UK insurance risk, with a low level of retention. |
| incident or event. | ||
| Expense | Administration costs exceed | Administration is outsourced and a tariff of costs is agreed. The contract |
| expense allowance. | is monitored regularly to rationalise costs incurred. Internal overhead | |
| expenses are monitored and closely managed. | ||
| Retention | Unexpected movement in | Retention of insurance contracts is closely monitored and unexpected |
| future profit due to more (or | experience is investigated. Retention experience has continued in line | |
| fewer) clients than anticipated | with assumptions. | |
| withdrawing their funds. |
| Liability for remaining coverage | Liability for | |||
| Excluding loss | Loss | claims | ||
| component | component | incurred | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2023 | 452.6 | – | 17.9 | 470.5 |
Insurance revenue | (25.3) | – | – | (25.3) |
Insurance service expenses | 24.5 | – | – | 24.5 |
Finance expense from insurance contracts recognised in profit or loss | 2.8 | – | – | 2.8 |
Total changes in the Statement of Comprehensive Income | 2.0 | – | – | 2.0 |
| Investment components excluded from insurance revenue | ||||
and insurance service expenses | (3.6) | – | – | (3.6) |
Premiums received | (31.3) | – | – | (31.3) |
Claims and other insurance service expenses paid | 58.1 | – | 0.3 | 58.4 |
Total cash flows | 26.8 | – | 0.3 | 27.1 |
Balance at 31 December 2023 | 477.8 | – | 18.2 | 496.0 |
Current | 84.0 | |||
Non-current | 412.0 | |||
| 496.0 |
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17. Insurance contract liabilities and reinsurance assets continued
Insurance contract liabilities continued
| Liability for remaining coverage | Liability | |||
| Excluding loss | Loss | for claims | ||
| component | component | incurred | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2022 | 543.4 | – | 25.2 | 568.6 |
Insurance revenue | (26.5) | – | – | (26.5) |
Insurance service expenses | 13.5 | – | – | 13.5 |
Finance income from insurance contracts recognised in profit or loss | (17.3) | – | – | (17.3) |
Total changes in the Statement of Comprehensive Income | (30.3) | – | – | (30.3) |
Investment components excluded from insurance revenue and insurance service expenses | (76.2) | – | – | (76.2) |
Premiums received | (34.0) | – | – | (34.0) |
Claims and other insurance service expenses paid | 49.7 | – | (7.3) | 42.4 |
Total cash flows | 15.7 | – | (7.3) | 8.4 |
Balance at 31 December 2022 | 452.6 | – | 17.9 | 470.5 |
Current | 81.8 | |||
Non-current | 388.7 | |||
| 470.5 |
| Estimates of | Risk | |||
| present value | adjustment for | |||
| of future cash | non-financial | |||
| flows | risk | CSM | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2023 | 439.0 | 5.8 | 7.8 | 452.6 |
Insurance service result | (1.9) | 0.1 | 1.0 | (0.8) |
Finance expense from insurance contracts recognised in profit or loss | 2.7 | 0.1 | – | 2.8 |
Total changes in the Statement of Comprehensive Income | 0.8 | 0.2 | 1.0 | 2.0 |
Investment components excluded from insurance revenue and insurance service expenses | (3.6) | – | – | (3.6) |
Premiums received | (31.3) | – | – | (31.3) |
Claims and other insurance service expenses paid | 58.1 | – | – | 58.1 |
Total cash flows | 26.8 | – | – | 26.8 |
Balance at 31 December 2023 | 463.0 | 6.0 | 8.8 | 477.8 |
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DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
| Estimates of | Risk | |||
| present value | adjustment for | |||
| of future cash | non-financial | Contractual | ||
| flows | risk | service margin | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2022 | 520.8 | 9.3 | 13.3 | 543.4 |
Insurance service result | (6.6) | (0.9) | (5.5) | (13.0) |
Finance income from insurance contracts recognised in profit or loss | (14.7) | (2.6) | – | (17.3) |
Total changes in the Statement of Comprehensive Income | (21.3) | (3.5) | (5.5) | (30.3) |
Investment components excluded from insurance revenue and insurance service expenses | (76.2) | – | – | (76.2) |
Premiums received | (34.0) | – | – | (34.0) |
Claims and other insurance service expenses paid | 49.7 | – | – | 49.7 |
Total cash flows | 15.7 | – | – | 15.7 |
Balance at 31 December 2022 | 439.0 | 5.8 | 7.8 | 452.6 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Less than 1 year | 0.7 | 0.8 |
In 2 to 5 years | 1.7 | 1.7 |
>5 years | 6.4 | 5.3 |
Total CSM for insurance contracts | 8.8 | 7.8 |
| Remaining | Recoverable | ||
| coverage | for claims | ||
| component | reinsured | Total | |
£’Million | £’Million | £’Million | |
Balance at 1 January 2023 | 49.0 | 5.6 | 54.6 |
Net reinsurance expense | (5.0) | – | (5.0) |
| Finance expenses from reinsurance contracts | |||
recognised in profit or loss | (7.2) | – | (7.2) |
Total changes in the Statement of Comprehensive Income | (12.2) | – | (12.2) |
Premiums paid | 21.7 | – | 21.7 |
Reinsurance recapture | (41.5) | – | (41.5) |
Amounts received from reinsurers relating to incurred claims | (10.7) | 1.1 | (9.6) |
Total cash flows | (30.5) | 1.1 | (29.4) |
Balance at 31 December 2023 | 6.3 | 6.7 | 13.0 |
Current | 6.7 | ||
Non-current | 6.3 | ||
| 13.0 |
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17. Insurance contract liabilities and reinsurance assets continued
| Remaining | Recoverable | ||
| coverage | for claims | ||
| component | reinsured | Total | |
£’Million | £’Million | £’Million | |
Balance at 1 January 2022 | 64.9 | 9.9 | 74.8 |
Net reinsurance expense | (9.6) | – | (9.6) |
| Finance expenses from reinsurance contracts | |||
recognised in profit or loss | (14.9) | – | (14.9) |
Total changes in the Statement of Comprehensive Income | (24.5) | – | (24.5) |
Premiums paid | 24.0 | – | 24.0 |
Reinsurance recapture | – | – | |
Amounts received from reinsurers relating to incurred claims | (15.4) | (4.3) | (19.7) |
Total cash flows | 8.6 | (4.3) | 4.3 |
Balance at 31 December 2022 | 49.0 | 5.6 | 54.6 |
Current | 11.7 | ||
Non-current | 42.9 | ||
| 54.6 |
| Estimates of | Risk | |||
| present value | adjustment for | |||
| of future cash | non-financial | Contractual | ||
| flows | risk | service margin | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2023 | 35.7 | 5.1 | 8.2 | 49.0 |
Net reinsurance expense | (4.7) | (0.5) | 0.2 | (5.0) |
| Finance expenses from insurance contracts | ||||
recognised in profit or loss | (0.5) | (3.5) | (3.2) | (7.2) |
Total changes in the Statement of Comprehensive Income | (5.2) | (4.0) | (3.0) | (12.2) |
Premiums paid | 21.7 | – | – | 21.7 |
Reinsurance recapture | (41.5) | (41.5) | ||
Amounts received from reinsurers relating to incurred claims | (10.7) | – | – | (10.7) |
Total cash flows | (30.5) | – | – | (30.5) |
Balance at 31 December 2023 | – | 1.1 | 5.2 | 6.3 |
| Estimates of | Risk | |||
| present value | adjustment for | |||
| of future cash | non-financial | |||
| flows | risk | CSM | Total | |
£’Million | £’Million | £’Million | £’Million | |
Balance at 1 January 2022 | 47.9 | 8.5 | 8.5 | 64.9 |
Net reinsurance expense | (8.6) | (0.7) | (0.3) | (9.6) |
Finance expenses from insurance contracts recognised in profit or loss | (12.2) | (2.7) | – | (14.9) |
Total changes in the Statement of Comprehensive Income | (20.8) | (3.4) | (0.3) | (24.5) |
Premiums paid | 24.0 | – | – | 24.0 |
Reinsurance recapture | – | – | – | – |
Amounts received from reinsurers relating to incurred claims | (15.4) | – | – | (15.4) |
Total cash flows | 8.6 | – | – | 8.6 |
Balance at 31 December 2022 | 35.7 | 5.1 | 8.2 | 49.0 |
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| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Less than 1 year | 0.1 | 0.7 |
In 2 to 5 years | 0.6 | 1.6 |
>5 years | 4.5 | 5.9 |
Total CSM for insurance contracts | 5.2 | 8.2 |
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17. Insurance contract liabilities and reinsurance assets continued
| Change in | Change in | ||||
| profit | profit | Change in | Change in | ||
| Change in | before tax | before tax | net assets | net assets | |
| assumption | 2023 | 2022 | 2023 | 2022 | |
| Sensitivity analysis | Percentage | £’Million | £’Million | £’Million | £’Million |
Interest rates | (1%) | (6.5) | (0.8) | (5.0) | (0.6) |
Mortality/morbidity | 10% | (1.5) | (0.1) | (1.1) | (0.1) |
| Ongoing | |||||
| Service | |||||
| Complaints | Evidence | Lease | Clawback | Total | |
| provision | provision | provision | provision | provisions | |
£’Million | £’Million | £’Million | £’Million | £’Million | |
At 1 January 2022 | 30.9 | – | 10.0 | 3.2 | 44.1 |
Additional provisions | 28.5 | – | 3.5 | – | 32.0 |
Utilised during the year | (14.0) | – | (0.1) | (0.2) | (14.3) |
Release of provision | (15.7) | – | (0.1) | – | (15.8) |
At 31 December 2022 | 29.7 | – | 13.3 | 3.0 | 46.0 |
Additional provisions | 61.8 | 426.0 | 2.6 | 0.1 | 490.5 |
Utilised during the year | (21.0) | – | (0.8) | – | (21.8) |
Release of provision | (14.4) | – | (0.2) | – | (14.6) |
At 31 December 2023 | 56.1 | 426.0 | 14.9 | 3.1 | 500.1 |
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| Change in profit/(loss) before tax | |||
| Change in | Favourable | Unfavourable | |
| assumption | changes | changes | |
| Sensitivity analysis | Percentage | £’Million | £’Million |
| Extrapolation from a representative cohort | |||
– Variation in proportion of client population subject to the review | 2% | 22.0 | (22.0) |
| Extrapolation from a representative cohort | |||
– Variation in the level of charges, based on average client FUM, subject to refund | 10% | 31.0 | (31.0) |
| Opt-In response rate | |||
– Variation in response rate | 10% | 17.0 | (17.0) |
| Administration costs | |||
– Change in estimation of the cost to fulfil the exercise (cost per claim) | 10% | 12.0 | (12.0) |
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| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Corporate borrowings: bank loans | 50.0 | – |
Corporate borrowings: loan notes | 151.1 | 163.8 |
Senior unsecured corporate borrowings | 201.1 | 163.8 |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Senior unsecured corporate borrowings | 201.1 | 163.8 |
Senior tranche of non-recourse securitisation loan notes | 50.3 | – |
Total borrowings | 251.4 | 163.8 |
Current | 62.0 | 12.8 |
Non-current | 189.4 | 151.0 |
251.4 | 163.8 |
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| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Junior tranche of non-recourse securitisation loan notes | 20.9 | 2.1 |
Senior tranche of non-recourse securitisation loan notes | 50.3 | – |
Total non-recourse securitisation loan notes | 71.2 | 2.1 |
Backed by Securitised business loans to Partners (see Note 15) | 67.2 | – |
Other net assets of SJP Partner Loans No.1 Limited | 4.0 | 2.1 |
Total net assets held by SJP Partner Loans No.1 Limited | 71.2 | 2.1 |
| Senior | Senior | Senior | Senior | |||
| unsecured | tranche of | unsecured | tranche of | |||
| corporate | securitisation | Total | corporate | securitisation | Total | |
| borrowings | loan notes | borrowings | borrowings | loan notes | borrowings | |
2023 | 2023 | 2023 | 2022 | 2022 | 2022 | |
£’Million | £’Million | £’Million | £’Million | £’Million | £’Million | |
Balance at 1 January | 163.8 | – | 163.8 | 270.6 | 162.4 | 433.0 |
Additional borrowing during the year | 175.0 | 58.1 | 233.1 | 145.0 | 59.0 | 204.0 |
Repayment of borrowings during the year | (137.7) | (7.1) | (144.8) | (252.0) | (223.3) | (475.3) |
Costs on additional borrowings during the year | – | – | – | (1.6) | – | (1.6) |
| Unwind of borrowing costs (non-cash | ||||||
movement) | – | – | – | 0.6 | 0.5 | 1.1 |
| Reclassification of prepaid loan facility | ||||||
expense to prepayments | – | (0.7) | (0.7) | 1.2 | 1.4 | 2.6 |
Balance at 31 December | 201.1 | 50.3 | 251.4 | 163.8 | – | 163.8 |
Loans drawn | Facility | |||
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
£’Million | £’Million | £’Million | £’Million | |
Bank of Scotland | 19.6 | 28.7 | 35.0 | 70.0 |
Investec | 33.3 | 28.8 | 50.0 | 50.0 |
Metro Bank | 17.6 | 27.3 | 50.0 | 40.0 |
NatWest | 32.2 | 37.9 | 75.0 | 75.0 |
Santander | 186.5 | 167.7 | 189.1 | 179.0 |
Total loans | 289.2 | 290.4 | 399.1 | 414.0 |
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20. Financial risk
Risk management objectives and risk policies
The Group’s financial risk can usefully be considered by looking at two categories of assets:
In general, the policyholder bears the financial risk arising on assets backing the unitised business, and risk arising
on shareholder assets is minimised through investment in liquid assets with a strong credit rating.
Exposure to the following risks for the two categories of assets is analysed separately in the following sections, in line
with the requirements of IFRS 7:
Credit risk is the risk of loss due to a debtor’s non-payment of a loan or other line of credit. Credit risk also arises from
holdings of cash and cash equivalents, deposits and formal loans with banks and financial institutions. The Group has
adopted a risk-averse approach to such risk and has a stated policy of not actively pursuing or accepting credit risk
except when necessary to support other objectives.
Risk | Description | Management |
| Shareholders’ assets | Loss of assets or | Shareholder funds are predominantly invested in AAA-rated unitised |
| reduction in value. | money market funds, which are classified as investments in Collective | |
| Investment Schemes (CIS), and deposits with approved banks, but may | ||
| be invested in sovereign fixed interest securities such as UK gilts where | ||
| regulatory constraints on other assets apply. Maximum counterparty | ||
| limits are set for each company within the Group and aggregate limits | ||
| are also set at a Group level. | ||
| Reinsurance | Failure of counterparty, | Credit ratings of potential reinsurers must meet or exceed AA-. |
| or counterparty unable | Consideration is also given to size, risk concentrations/exposures | |
| to meet liabilities. | and ownership in the selection of reinsurers. The Group also seeks | |
| to diversify its reinsurance credit risk through the use of a spread | ||
| of reinsurers. | ||
| Business loans | Inability of Partners to | Loans and advances are managed in line with the Group’s secured |
| to Partners | repay loans or advances | lending policy. Loans are secured on the future renewal income stream |
| from the Group. | expected from a Partner’s portfolio, and loan advances vary in relation | |
| to the projected future income of the relevant Partner. Outstanding | ||
| balances are regularly reviewed and assessed on a conservative basis. | ||
| Support is provided to help Partners manage their businesses | ||
| appropriately. Expected credit losses are recognised as provisions | ||
| against the loans. |
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DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
Risk | Description | Management |
| Cash or | A significant cash or | The majority of free assets are invested in cash or cash equivalents and the cash |
| expense | expense | position and forecast are monitored on a monthly basis. The Group also maintains |
| requirement | requirement needs | a margin of free assets in excess of the minimum required solvency capital within |
| to be met at short | its regulated entities. Further, the Group has established committed borrowing | |
| notice. | facilities (see Note 19) intended to further mitigate liquidity risk. |
Risk | Description | Management |
| Client liabilities | As a result of a reduction | This risk is substantially mitigated by the Group’s strategic focus on |
| in equity values, the | unitised business, by not providing guarantees to clients on policy | |
| Group may be unable | values and by the matching of assets and liabilities. | |
| to meet client liabilities. | ||
| Retention | Loss of future profit on | Retention of investment contracts is closely monitored and unexpected |
| investment contracts | experience variances are investigated. Retention has remained | |
| due to more clients than | consistently strong throughout 2023 despite the volatile market | |
| anticipated withdrawing | conditions experienced. | |
| their funds, particularly | ||
| as a result of poor | ||
| investment performance. | ||
| New business | Poor performance in the | The benefit to clients of longer-term equity investment as part of a |
| financial markets in | diversified portfolio of assets is fundamental to our philosophy. Advice | |
| absolute terms, and | becomes even more important when market values fall, and greater | |
| relative to inflation, leads | attention is required to support and give confidence to existing and | |
| to existing and future | future clients in such circumstances. In addition, as controls against | |
| clients rejecting | poor performance the Group monitors asset allocations across | |
| investment in longer- | portfolios to ensure they are working as expected to meet long-term | |
| term assets. | goals, and monitors funds against their objectives to ensure an | |
| appropriate level of investment risk. Where necessary, fund managers | ||
| are changed. |
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20. Financial risk continued
Shareholder assets
Categories of financial assets and financial liabilities
The categories and carrying values of the shareholder financial assets and financial liabilities held in the Group’s
Statement of Financial Position are summarised in the table below. The impact of climate change does not have
a material impact on the fair values of the assets summarised below.
| Financial assets at | Financial liabilities | Financial assets | Financial liabilities | ||
| fair value through | at fair value through | measured at | measured at | ||
| profit and loss | profit and loss | amortised cost | amortised cost | Total | |
| 31 December 2023 | £’Million | £’Million | £’Million | £’Million | £’Million |
| Financial assets | |||||
Fixed income securities | 8.2 | – | – | – | 8.2 |
| Investment in Collective Investment Schemes | 1,454.4 | – | – | – | 1,454.4 |
Other receivables 2 | |||||
– Business loans to Partners | – | – | 408.0 | – | 408.0 |
– Renewal income assets | 138.3 | – | – | – | 138.3 |
– Other | – | – | 1,155.4 | – | 1,155.4 |
Total other receivables | 138.3 | – | 1,563.4 | – | 1,701.7 |
Cash and cash equivalents | – | – | 285.4 | – | 285.4 |
Total financial assets | 1,600.9 | – | 1,848.8 | – | 3,449.7 |
| Financial liabilities | |||||
Borrowings | – | – | – | 251.4 | 251.4 |
| Other payables | |||||
– Lease liabilities : properties | – | – | – | 120.5 | 120.5 |
– Contingent consideration | – | 3.2 | – | – | 3.2 |
– Other | – | – | – | 1,651.1 | 1,651.1 |
Total other payables | – | 3.2 | – | 1,771.6 | 1,774.8 |
Total financial liabilities | – | 3.2 | – | 2,023.0 | 2,026.2 |
1
| Financial assets at | Financial liabilities | Financial assets | Financial liabilities | ||
| fair value through | at fair value through | measured at | measured at | ||
| profit and loss | profit and loss | amortised cost | amortised cost | Total | |
| 31 December 2022 | £’Million | £’Million | £’Million | £’Million | £’Million |
| Financial assets | |||||
Fixed income securities | 7.9 | – | – | – | 7.9 |
Investment in Collective Investment Schemes 1 | 1,271.7 | – | – | – | 1,271.7 |
Other receivables 2 | |||||
– Business loans to Partners | – | – | 315.6 | – | 315.6 |
– Renewal income assets | 115.5 | – | – | – | 115.5 |
| – Other | – | – | 538.4 | – | 538.4 |
Total other receivables | 115.5 | – | 854.0 | – | 969.5 |
Cash and cash equivalents | – | – | 253.3 | – | 253.3 |
Total financial assets | 1,395.1 | – | 1,107.3 | – | 2,502.4 |
| Financial liabilities | |||||
Borrowings | – | – | – | 163.8 | 163.8 |
| Other payables | |||||
– Lease liabilities : properties | – | – | – | 116.6 | 116.6 |
– Contingent consideration | – | 8.3 | – | – | 8.3 |
– Other 3 | – | – | – | 1,213.8 | 1,213.8 |
Total other payables | – | 8.3 | – | 1,330.4 | 1,338.7 |
Total financial liabilities | – | 8.3 | – | 1,494.2 | 1,502.5 |
3,4
1 All assets included as shareholder investment in Collective Investment Schemes are holdings of high-quality, highly liquid money market funds,
containing assets which are cash and cash equivalents.
2 Other receivables exclude prepayments and advanced payments to Partners, which are not considered financial assets.
3 Restated to reflect the adoption of IFRS 17. See Note 1a.
4 Other has increased by £43.5 million to better reflect the nature of the balances included.
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| Financial assets at | Financial assets | Financial liabilities | ||
| fair value through | measured at | measured at | ||
| profit and loss | amortised cost | amortised cost | Total | |
| Year ended 31 December 2023 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | 1.2 | – | – | 1.2 |
Investment in Collective Investment Schemes | 60.6 | – | – | 60.6 |
| Other receivables | ||||
– Business loans to Partners | – | 22.1 | – | 22.1 |
– Renewal income assets | (7.1) | – | – | (7.1) |
Total other receivables | (7.1) | 22.1 | – | 15.0 |
Cash and cash equivalents | – | 17.7 | – | 17.7 |
Total financial assets | 54.7 | 39.8 | – | 94.5 |
| Financial liabilities | ||||
Borrowings | – | – | (13.9) | (13.9) |
| Other payables | ||||
– Lease liabilities: properties | – | – | (3.4) | (3.4) |
Total other payables | – | – | (3.4) | (3.4) |
Total financial liabilities | – | – | (17.3) | (17.3) |
| Financial assets at | Financial assets | Financial liabilities | ||
| fair value through | measured at | measured at | ||
| profit and loss | amortised cost | amortised cost | Total | |
| Year ended 31 December 2022 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | (0.7) | – | – | (0.7) |
Investment in Collective Investment Schemes | 14.9 | – | – | 14.9 |
| Other receivables | ||||
– Business loans to Partners | – | 20.6 | – | 20.6 |
– Renewal income assets | (15.2) | – | – | (15.2) |
Total other receivables | (15.2) | 20.6 | – | 5.4 |
Cash and cash equivalents | – | 2.6 | – | 2.6 |
Total financial assets | (1.0) | 23.2 | – | 22.2 |
| Financial liabilities | ||||
Borrowings | – | – | (9.4) | (9.4) |
| Other payables | ||||
– Lease liabilities: properties | – | – | (3.0) | (3.0) |
Total other payables | – | – | (3.0) | (3.0) |
Total financial liabilities | – | – | (12.4) | (12.4) |
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20. Financial risk continued
Level 1 | Level 2 | Level 3 | Total balance | |
| 31 December 2023 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | 8.2 | – | – | 8.2 |
| Investment in Collective Investment Schemes | 1,454.4 | – | – | 1,454.4 |
Renewal income assets | – | – | 138.3 | 138.3 |
Total financial assets | 1,462.6 | – | 138.3 | 1,600.9 |
| Financial liabilities | ||||
Contingent consideration | – | – | 3.2 | 3.2 |
Total financial liabilities | – | – | 3.2 | 3.2 |
Level 1 | Level 2 | Level 3 | Total balance | |
| 31 December 2022 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | 7.9 | – | – | 7.9 |
Investment in Collective Investment Schemes 1 | 1,271.7 | – | – | 1,271.7 |
Renewal income assets | – | – | 115.5 | 115.5 |
Total financial assets | 1,279.6 | – | 115.5 | 1,395.1 |
| Financial liabilities | ||||
Contingent consideration | – | – | 8.3 | 8.3 |
Total financial liabilities | – | – | 8.3 | 8.3 |
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2023 | 2022 | |
| Renewal income assets | £’Million | £’Million |
Balance at 1 January | 115.5 | 102.5 |
Additions during the year | 32.0 | 36.1 |
Disposals during the year | (2.1) | (7.8) |
Unrealised losses recognised in the Statement of Comprehensive Income | (7.1) | (15.3) |
Balance at 31 December | 138.3 | 115.5 |
2023 | 2022 | |
Contingent consideration | £’Million | £’Million |
Balance at 1 January | 8.3 | 8.3 |
Additions during the year | 3.2 | 6.3 |
Payments made during the year | (6.7) | (6.3) |
Released during the year | (1.6) | – |
Balance at 31 December | 3.2 | 8.3 |
AAA | AA | A | BB | Unrated | Total | |
| 31 December 2023 | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million |
Fixed income securities | – | 8.2 | – | – | – | 8.2 |
Investment in Collective Investment Schemes 1 | 1,454.4 | – | – | – | – | 1,454.4 |
Reinsurance assets | – | – | – | – | – | – |
Other receivables | – | 6.7 | – | – | 1,695.0 | 1,701.7 |
Cash and cash equivalents | – | 74.2 | 211.2 | – | – | 285.4 |
Total | 1,454.4 | 89.1 | 211.2 | – | 1,695.0 | 3,449.7 |
AAA | AA | A | BB | Unrated | Total | |
| 31 December 2022 | £’Million | £’Million | £’Million | £’Million | £’Million | £’Million |
Fixed income securities | – | 7.9 | – | – | – | 7.9 |
| Investment in Collective Investment Schemes | 1,271.7 | – | – | – | – | 1,271.7 |
| Reinsurance assets | – | – | – | – | – | – |
Other receivables 2,3 | – | – | – | – | 969.5 | 969.5 |
Cash and cash equivalents | – | 53.8 | 197.4 | 2.1 | – | 253.3 |
Total | 1,271.7 | 61.7 | 197.4 | 2.1 | 969.5 | 2,502.4 |
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20. Financial risk continued
Up to 1 year | 1 to 5 years | Over 5 years | Total | |
| 31 December 2023 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | 8.2 | – | – | 8.2 |
Investment in Collective Investment Schemes | 1,454.4 | – | – | 1,454.4 |
| Other receivables | ||||
– Business loans to Partners | 120.9 | 253.7 | 33.4 | 408.0 |
– Renewal income | 22.1 | 51.7 | 64.5 | 138.3 |
– Other | 1,155.4 | – | – | 1,155.4 |
Total other receivables | 1,298.4 | 305.4 | 97.9 | 1,701.7 |
Cash and cash equivalents | 285.4 | – | – | 285.4 |
Total financial assets | 3,046.4 | 305.4 | 97.9 | 3,449.7 |
| Financial liabilities | ||||
Borrowings | 75.8 | 127.3 | 119.2 | 322.3 |
| Other payables | ||||
– Lease liabilities: properties | 16.6 | 48.1 | 55.8 | 120.5 |
– Contingent consideration | 1.3 | 1.9 | – | 3.2 |
– Other | 1,581.6 | 58.0 | 22.5 | 1,662.1 |
Total other payables | 1,599.5 | 108.0 | 78.3 | 1,785.8 |
Total financial liabilities | 1,675.3 | 235.3 | 197.5 | 2,108.1 |
Up to 1 year | 1 to 5 years | Over 5 years | Total | |
| 31 December 2022 | £’Million | £’Million | £’Million | £’Million |
| Financial assets | ||||
Fixed income securities | 7.9 | – | – | 7.9 |
Investment in Collective Investment Schemes | 1,271.7 | – | – | 1,271.7 |
| Other receivables | ||||
– Business loans to Partners | 63.5 | 186.1 | 66.0 | 315.6 |
– Renewal income | 14.0 | 28.3 | 73.2 | 115.5 |
– Other 1,2 | 538.4 | – | – | 538.4 |
Total other receivables | 615.9 | 214.4 | 139.2 | 969.5 |
Cash and cash equivalents | 253.3 | – | – | 253.3 |
Total financial assets | 2,148.8 | 214.4 | 139.2 | 2,502.4 |
| Financial liabilities | ||||
Borrowings 3 | 22.4 | 87.4 | 126.3 | 236.1 |
| Other payables | ||||
– Lease liabilities: properties | 17.7 | 56.8 | 59.2 | 133.7 |
– Contingent consideration | 6.4 | 1.9 | – | 8.3 |
– Other 1 | 1,140.7 | 58.0 | 37.0 | 1,235.7 |
Total other payables | 1,164.8 | 116.7 | 96.2 | 1,377.7 |
Total financial liabilities | 1,187.4 | 204.1 | 222.4 | 1,613.8 |
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| 31 December | 31 December | |
| 2023 | 2022 1 | |
£’Million | £’Million | |
| Financial assets and investment properties | ||
| Investment properties | 20.0 | (179.5) |
| Other assets backing unit liabilities | 13,013.4 | (9,416.5) |
Total financial assets and investment properties | 13,033.4 | (9,596.0) |
| Financial liabilities | ||
| Unit liabilities | (13,038.4) | 9,590.7 |
Total financial liabilities | (13,038.4) | 9,590.7 |
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20. Financial risk continued
Level 1 | Level 2 | Level 3 | Total balance | |
| 31 December 2023 | £’Million | £’Million | £’Million | £’Million |
| Financial assets and investment properties | ||||
Investment property | – | – | 1,110.3 | 1,110.3 |
Equities | 115,134.5 | – | 1,627.0 | 116,761.5 |
Fixed income securities | 6,883.7 | 20,006.3 | 346.5 | 27,236.5 |
Investment in Collective Investment Schemes | 12,505.7 | – | 7.4 | 12,513.1 |
Derivative financial instruments | – | 3,420.6 | – | 3,420.6 |
Cash and cash equivalents | 5,918.9 | – | – | 5,918.9 |
Total financial assets and investment properties | 140,442.8 | 23,426.9 | 3,091.2 | 166,960.9 |
| Financial liabilities | ||||
Investment contract benefits | – | 123,149.8 | – | 123,149.8 |
Derivative financial instruments | – | 3,073.0 | – | 3,073.0 |
Net asset value attributable to unit holders | 40,536.5 | – | – | 40,536.5 |
Total financial liabilities | 40,536.5 | 126,222.8 | – | 166,759.3 |
Level 1 | Level 2 | Level 3 | Total balance | |
| 31 December 2022 | £’Million | £’Million | £’Million | £’Million |
| Financial assets and investment properties | ||||
Investment property | – | – | 1,294.5 | 1,294.5 |
Equities | 101,944.0 | – | 1,592.0 | 103,536.0 |
Fixed income securities | 7,322.0 | 19,856.4 | 366.4 | 27,544.8 |
Investment in Collective Investment Schemes | 4,459.8 | – | 3.9 | 4,463.7 |
Derivative financial instruments | – | 3,493.0 | – | 3,493.0 |
Cash and cash equivalents | 6,179.5 | – | – | 6,179.5 |
Total financial assets and investment properties | 119,905.3 | 23,349.4 | 3,256.8 | 146,511.5 |
| Financial liabilities | ||||
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 |
Total financial liabilities | 36,628.4 | 110,231.0 | – | 146,859.4 |
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20. Financial risk continued
| Collective | ||||
| Investment | Fixed income | Investment | ||
| property | securities | Equities | Schemes | |
| 2023 | £’Million | £’Million | £’Million | £’Million |
Balance at 1 January 2023 | 1,294.5 | 366.4 | 1,592.0 | 3.9 |
Transfer into Level 3 | – | 26.7 | – | 4.0 |
Additions during the year | 10.1 | 25.9 | 227.1 | – |
Disposed during the year | (149.4) | (58.2) | (225.0) | (0.4) |
(Losses)/gains recognised in the income statement | (44.9) | (14.3) | 32.9 | (0.1) |
Balance at 31 December 2023 | 1,110.3 | 346.5 | 1,627.0 | 7.4 |
Realised (losses)/gains | (39.0) | 7.4 | (4.4) | – |
Unrealised (losses)/gains | (5.9) | (21.7) | 37.3 | (0.1) |
(Losses)/gains recognised in the income statement | (44.9) | (14.3) | 32.9 | (0.1) |
| Collective | ||||
| Investment | Fixed income | Investment | ||
| property | securities | Equities | Schemes | |
| 2022 | £’Million | £’Million | £’Million | £’Million |
Balance at 1 January 2022 | 1,568.5 | 308.1 | 1,047.1 | 3.9 |
Transfer into Level 3 | – | 6.0 | 4.8 | 0.7 |
Additions during the year | 23.6 | 57.8 | 425.8 | – |
Disposed during the year | (53.1) | (29.7) | (77.1) | (0.8) |
(Losses)/gains recognised in the income statement | (244.5) | 24.2 | 191.4 | 0.1 |
Balance at 31 December 2022 | 1,294.5 | 366.4 | 1,592.0 | 3.9 |
Realised (losses)/gains | (192.7) | 9.1 | 11.9 | – |
Unrealised (losses)/gains | (51.8) | 15.1 | 179.5 | 0.1 |
(Losses)/gains recognised in the income statement | (244.5) | 24.2 | 191.4 | 0.1 |
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| Investment property classification | ||||
| 31 December 2023 | Office | Industrial | Retail and leisure | All |
Gross ERV (per sq ft) 1 | ||||
Range | £29.50 to £110.00 | £5.25 to £24.00 | £2.50 to £97.54 | £2.50 to £110.00 |
Weighted average | £49.58 | £13.74 | £13.53 | £16.89 |
| True equivalent yield | ||||
Range | 4.7% to 10.3% | 5.0% to 6.8% | 6.2% to 13.9% | 4.7% to 13.9% |
Weighted average | 7.0% | 5.6% | 7.8% | 6.7% |
| Investment property classification | ||||
| 31 December 2022 | Office | Industrial | Retail and leisure | All |
| Gross ERV (per sq ft) | ||||
Range | £14.00 to £107.50 | £5.00 to £22.50 | £2.50 to £88.94 | £2.50 to £107.50 |
Weighted average | £46.18 | £12.71 | £13.54 | £17.20 |
| True equivalent yield | ||||
Range | 4.3% to 9.7% | 5.2% to 6.3% | 6.0% to 10.5% | 4.3% to 10.5% |
Weighted average | 5.9% | 5.5% | 7.2% | 6.2% |
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20. Financial risk continued
| Effect of reasonably possible | ||||
| alternative assumptions | ||||
| Favourable | Unfavourable | |||
| Carrying value | changes | changes | ||
| Investment property significant unobservable inputs | £’Million | £’Million | £’Million | |
31 December 2023 | Expected rental value/relative yield | 1,110.3 | 1,207.5 | 1,021.0 |
31 December 2022 | Expected rental value/relative yield | 1,294.5 | 1.410.8 | 1,186.6 |
| Effect of reasonably possible | ||||
| alternative assumptions | ||||
| Favourable | Unfavourable | |||
| Carrying value | changes | changes | ||
£’Million | £’Million | £’Million | ||
31 December 2023 | Fixed income securities | 346.5 | 351.9 | 340.7 |
Equities | 1,627.0 | 1,813.0 | 1,449.2 | |
31 December 2022 | Fixed income securities | 366.4 | 374.2 | 358.3 |
Equities | 1,587.3 | 1,783.5 | 1,380.3 | |
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21. Cash generated from operations
| Year ended | Year ended | ||
| 31 December | 31 December | ||
| 2023 | 2022 1 | ||
| Note | £’Million | £’Million | |
| Cash flows from operating activities | |||
| Profit before tax for the year | 439.6 | 2.8 | |
| Adjustments for: | |||
Amortisation of purchased value of in-force business | 11 | 3.2 | 3.2 |
Amortisation of computer software | 11 | 15.4 | 9.3 |
Depreciation | 12 | 24.0 | 21.7 |
Impairment of goodwill | 11 | – | 1.5 |
Loss on disposal of computer software | 11 | 0.8 | 0.5 |
Loss on disposal of property and equipment, including leased assets | 12 | 2.3 | 0.9 |
Gain on disposal of subsidiary | (1.2) | – | |
Share-based payment charge | 24 | 4.9 | 20.5 |
Interest income | (108.0) | (61.8) | |
Interest expense | 17.3 | 12.4 | |
Increase in provisions | 18 | 454.1 | 1.9 |
Exchange rate losses/(gains) | 2.3 | (0.7) | |
| Changes in operating assets and liabilities | 415.1 | 9.4 | |
Decrease in deferred acquisition costs | 11 | 32.2 | 42.3 |
Decrease in investment property | 184.2 | 274.0 | |
(Increase)/decrease in other investments | (21,077.2) | 2,378.9 | |
| Decrease in reinsurance assets | 41.6 | 20.2 | |
| Increase in other receivables | (14.2) | (40.6) | |
| Increase/(decrease) in insurance contract liabilities | 25.5 | (98.1) | |
Increase/(decrease) in financial liabilities (excluding borrowings) | 15,991.8 | (1,138.3) | |
Decrease in deferred income | 11 | (38.9) | (32.2) |
| Increase/(decrease) in other payables | 206.2 | (390.4) | |
Increase/(decrease) in net assets attributable to unit holders | 3,908.1 | (1,740.6) | |
(740.7) | (724.8) | ||
| Cash generated from/(used in) operations | 114.0 | (712.6) |
1
1
1,2
1
1
2
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
2 Restated to reclassify Proceeds from sale of financial assets held at amortised cost from net cash flows from investing activities to net cash flows
from operating activities. See Note 1a.
22. Capital management and allocation
The Group’s capital management policy, set by the Board, is to maintain a strong capital base in order to:
The policy requires that each subsidiary manages its own capital, in particular to maintain regulatory solvency, in the
context of a Group capital plan. Any capital in excess of planned requirements is returned to the Group’s Parent Company,
St. James’s Place plc, normally by way of dividends. The Group capital position is monitored by the Audit Committee on
behalf of the St. James’s Place plc Board.
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22. Capital management and allocation continued
the capital required by any relevant supervisory body, uplifted by a specified margin to absorb changes; or
the capital required based on the Company’s internal assessment.
Entity | Regulatory body and jurisdiction |
Capstone Financial (HK) Limited | Securities and Futures Commission (Hong Kong): |
| Insurance Authority (Hong Kong) | |
Perennial Financial Management Limited | FCA: Personal Investment Firm |
Policy Services Limited | FCA: Personal Investment Firm |
Rowan Dartington & Co Limited | FCA: Investment Firm |
St. James’s Place (Hong Kong) Limited | Securities and Futures Commission (Hong Kong): |
| Insurance Authority (Hong Kong) | |
St. James’s Place (Middle East) Limited | Dubai Financial Services Authority |
St. James’s Place International (Hong Kong) Limited | Insurance Authority (Hong Kong) |
St. James’s Place International plc | Central Bank of Ireland: Life Insurance Business |
St. James’s Place Investment Administration Limited | FCA: Investment Firm |
St. James’s Place Partnership Services Limited | FCA: Consumer Credit Firm |
St. James’s Place (Singapore) Private Limited | Monetary Authority of Singapore: Member of the Association |
| of Financial Advisers | |
St. James’s Place UK plc | PRA and FCA: Long-term insurance business |
St. James’s Place Unit Trust Group Limited | FCA: UCITS Management Company |
St. James’s Place Wealth Management plc | FCA: Personal Investment Firm |
| 31 December | 31 December | |
| 2023 | 2022 1 | |
£’Million | £’Million | |
IFRS total assets 1 | 172,293.1 | 151,685.5 |
Less Solvency II valuation adjustments and unit-linked liabilities 1 | (171,160.1) | (150,305.6) |
Solvency II net assets | 1,133.0 | 1,379.9 |
Solvency II VIF | 2,485.2 | 5,580.4 |
Risk margin | (318.4) | (1,516.4) |
Own funds (A) | 3,299.8 | 5,443.9 |
Standard formula SCR (B) | (1,727.7) | (3,522.5) |
Solvency II free assets | 1,572.1 | 1,921.4 |
Solvency II ratio (A/B) | 191% | 155% |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Solvency II net assets | 1,133.0 | 1,379.9 |
Less: management solvency buffer (MSB) | (529.5) | (532.7) |
Excess of free assets over MSB | 603.5 | 847.2 |
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| 31 December | 31 December | |
| 2023 | 2022 1 | |
£’Million | £’Million | |
Share capital | 82.3 | 81.6 |
Share premium | 233.9 | 227.8 |
Shares in trust reserve | (0.7) | (4.1) |
Miscellaneous reserves | 2.5 | 2.5 |
Retained earnings | 665.4 | 963.8 |
Shareholders’ equity | 983.4 | 1,271.6 |
Non-controlling interests | 0.1 | 0.2 |
Total equity | 983.5 | 1,271.8 |
23. Share capital, earnings per share and dividends
| Number of | Called-up | |
| ordinary shares | share capital | |
| £’Million | ||
At 1 January 2022 | 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 |
– Issue of shares | – | – |
– Exercise of options | 4,369,037 | 0.7 |
At 31 December 2023 | 548,604,794 | 82.3 |
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23. Share capital, earnings per share and dividends continued
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
| Earnings | ||
Profit after tax attributable to equity shareholders (for both basic and diluted EPS) 1 | (10.1) | 406.8 |
Million | Million | |
| Weighted average number of shares | ||
Weighted average number of ordinary shares in issue (for basic EPS) | 547.6 | 542.7 |
Adjustments for outstanding share options | 8.8 | 5.1 |
Weighted average number of ordinary shares (for diluted EPS) | 556.4 | 547.8 |
| Earnings per share (EPS) | Pence | Pence |
Basic earnings per share 1 | (1.8) | 75.0 |
Diluted earnings per share 1 | (1.8) | 74.3 |
| Year ended | Year ended | Year ended | Year ended | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
| Pence per | Pence per | |||
| share | share | £’Million | £’Million | |
Final dividend in respect of 2021 | – | 40.41 | – | 218.9 |
Interim dividend in respect of 2022 | – | 15.59 | – | 84.7 |
Final dividend in respect of 2022 | 37.19 | – | 203.1 | – |
Interim dividend in respect of 2023 | 15.83 | – | 86.5 | – |
Total dividends | 53.02 | 56.00 | 289.6 | 303.6 |
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Save As You Earn (SAYE) Plan – this is an equity-settled scheme that is available to all employees where individuals may
Partner Performance Share Plan – this is an equity-settled plan under which Partners are entitled to purchase shares
Partner and Adviser Chartered Plan – this is an equity-settled scheme that was launched during 2015 as part of the
Associate Partner Plan – this is an equity-settled scheme that was launched during 2017 whereby Partners and advisers
Share Incentive Plan (SIP) – this is an equity-settled scheme, available to all employees, where individuals may invest
Executive Deferred Bonus Schemes – under these plans the deferred element of the annual bonus is used to purchase
Executive Performance Share Plan – the Remuneration Committee of the Group Board may make awards of
Restricted Share Plan – under this plan employees are awarded performance-related shares with the vesting
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24. Share-based payments continued
Financial assumptions underlying the calculation of fair value
The fair value expense has been based on the fair value of the instruments granted, as calculated using appropriate
derivative pricing models. The table below shows the weighted average assumptions and models used to calculate the
grant-date fair value of each award:
3
| Executive | |||||
| Share | Executive | Performance | Restricted | ||
| SAYE Plan | Incentive Plan | Deferred Bonus | Share Plan | Share Plan | |
| Valuation model | Black-Scholes | Black-Scholes | Black-Scholes | Monte Carlo | Monte Carlo |
| Awards in 2023 | |||||
Fair value (pence) | 314.4 | 1,191.0 | 1,173.5 | 655.0/1,184.5 | 1,028.0 |
Share price (pence) | 1,191.0 | 1,191.0 | 1,173.5 | 1,184.5 | 1,173.5 |
Exercise price (pence) | 988.0 | – | – | – | – |
Expected volatility (% per annum) 1 | 34 | N/A | N/A | 31 | N/A |
Expected dividends (% per annum) 2 | 4.4 | – | – | 4.5 | 4.5 |
Risk-free interest rate (% per annum) | 3.4 | N/A | N/A | N/A | N/A |
Expected life (years) | 3.5 | 3 | 3 | 3 | 3 |
Volatility of competitors (% per annum) | N/A | N/A | N/A | 21-66 | N/A |
Correlation with competitors (%) | N/A | N/A | N/A | 20 | N/A |
| Awards in 2022 | |||||
Fair value (pence) | 404.8 | 1,447.0 | 1,447.0 | 911.6/1,447.0 | 1,300.9 |
Share price (pence) | 1,447.0 | 1,447.0 | 1,447.0 | 1,447.0 | 1,447.0 |
Exercise price (pence) | 1,111.0 | – | – | – | – |
| Expected volatility (% per annum) | 33 | N/A | N/A | 33 | 33 |
| Expected dividends (% per annum) | 3.6 | – | – | 3.6 | 3.6 |
Risk-free interest rate (% per annum) | 1.43 | N/A | N/A | N/A | N/A |
Expected life (years) | 3.5 | 3 | 3 | 3 | 3 |
Volatility of competitors (% per annum) | N/A | N/A | N/A | 23-80 | N/A |
Correlation with competitors (%) | N/A | N/A | N/A | 20 | N/A |
3,4
1
2
1 Expected volatility is based on an analysis of the Company’s historical share price volatility over a period which is commensurate with the
expected term of the options or the awards.
2 For schemes where dividends are payable on the shares during the vesting period, the dividend yield assumption in the Black-Scholes option
pricing model is set at zero.
3 The awards made under the Executive Performance Share Plan are dependent upon earnings growth in the Company (two-thirds of the award)
and a total shareholder return of a comparator group of companies (one-third of the award). This results in having two fair values for each of the
awards made in the table above: the first being in relation to the comparator total shareholder return, which is a market-based performance
condition and so valued using a Monte Carlo simulation; and the second relating to the Company’s earnings growth, which is a non-market-based
performance condition and so valued using the Black-Scholes model.
4 The awards made under the Executive Performance Share Plan for members of the Group Executive Committee are subject to a two-year holding
period once the award has vested. This results in discounted fair values for the Group Executive Committee population of 594.6/1,073.9 (2022:
820.4/1,447.0) pence per share, to reflect the reduced marketability of the awards.
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
Share option schemes
| Year ended | Year ended | Year ended | Year ended | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2023 | 2022 | 2022 | |
| Weighted | Weighted | |||
| Number | average | Number | average | |
| of options | exercise price | of options | exercise price | |
| SAYE Plan | ||||
Outstanding at start of year | 1,139,731 | £9.76 | 1,405,475 | £8.18 |
Granted | 587,793 | £9.88 | 420,798 | £11.11 |
Forfeited | (498,775) | £10.23 | (157,596) | £9.90 |
Exercised | (365,793) | £8.14 | (528,946) | £7.46 |
Outstanding at end of year | 862,956 | £10.26 | 1,139,731 | £9.76 |
Exercisable at end of year | – | – | 2,233 | £8.06 |
| Partner Performance Share Plan | ||||
Outstanding at start of year | – | – | 440,702 | £0.15 |
Granted | – | – | – | – |
Forfeited | – | – | – | – |
Exercised | – | – | (440,702) | £0.15 |
Outstanding at end of year | – | – | – | – |
Exercisable at end of year | – | – | – | – |
| Partner and Adviser Chartered Plan | ||||
Outstanding at start of year | – | – | 176,378 | £0.15 |
Granted | – | – | – | – |
Forfeited | – | – | (2,000) | £0.15 |
Exercised | – | – | (174,378) | £0.15 |
Outstanding at end of year | – | – | – | – |
Exercisable at end of year | – | – | – | – |
| Associate Partner Plan | ||||
Outstanding at start of year | 2,909,183 | £10.91 | 3,274,033 | £10.91 |
Granted | – | – | – | – |
Forfeited | (28,500) | £10.88 | (33,750) | £10.91 |
Exercised | (38,500) | £10.83 | (331,100) | £10.85 |
Outstanding at end of year | 2,842,183 | £10.91 | 2,909,183 | £10.91 |
Exercisable at end of year | 2,842,183 | £10.91 | 2,909,183 | £10.91 |
The average share price during the year was 997.5 pence (2022: 1,248.7 pence).
The SAYE Plan options outstanding at 31 December 2023 had exercise prices of 940 pence (173,533 options), 1,281 pence
(59,688 options), 1,111 pence (192,396 options) and 988 pence (437,339 options), and a weighted average remaining
contractual life of 1.7 years.
The options outstanding under the Partner Performance Share Plan and the Partner and Adviser Chartered Plan at
31 December 2023 were all exercisable at a exercise price of 15 pence, hence their weighted average remaining
contractual life was nil.
The options outstanding under the Associate Partner Plan at 31 December 2023 had an exercise price of 1,083 pence
(2,396,458 options) and 1,135 pence (445,725 options), and a weighted average remaining contractual life of nil years.
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24. Share-based payments continued
Share awards
All share awards under the below schemes have exercise prices of nil.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| Number | Number | |
| of shares | of shares | |
| Share Incentive Plan | ||
Outstanding at start of year | 39,249 | 38,039 |
Granted | 7,695 | 6,653 |
Forfeited | – | – |
Exercised | (8,237) | (5,443) |
Outstanding at end of year | 38,707 | 39,249 |
Exercisable at end of year | 10,558 | 11,937 |
| Executive Deferred Bonus Scheme | ||
Outstanding at start of year | 985,271 | 1,026,985 |
Granted | 575,481 | 532,147 |
Forfeited | (469,128) | (12,724) |
Exercised | – | (561,137) |
Outstanding at end of year | 1,091,624 | 985,271 |
Exercisable at end of year | – | 646 |
| Executive Performance Share Plan | ||
Outstanding at start of year | 7,373,170 | 7,424,110 |
Granted | 1,863,029 | 1,120,077 |
Forfeited | (562,733) | (441,929) |
Exercised | (2,013,252) | (729,088) |
Outstanding at end of year | 6,660,214 | 7,373,170 |
Exercisable at end of year | 2,616,406 | 1,840,660 |
| Restricted Share Plan | ||
Outstanding at start of year | 197,291 | 45,853 |
Granted | 231,859 | 162,643 |
Forfeited | (11,177) | (11,205) |
Exercised | – | – |
Outstanding at end of year | 417,973 | 197,291 |
Exercisable at end of year | – | – |
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
Early exercise assumptions
An allowance has been made for the impact of early exercise once options have vested in the SAYE Plan, where all option
holders are assumed to exercise half-way through the six-month exercise window.
Allowance for performance conditions
The Executive Performance Share Plan includes a market-based performance condition based on the Company’s total
shareholder return relative to an index of comparator companies. The impact of this performance condition has been
modelled using Monte Carlo simulation techniques, which involve running many thousands of simulations of future share
price movements for both the Company and the comparator index. For the purpose of these simulations it is assumed
that the share price of the Company and the comparator index are 20% (2022: 20%) correlated and that the comparator
index has volatilities ranging between 21% per annum and 66% per annum (2022: 23% per annum and 80% per annum).
The performance condition is based on the Company’s performance relative to the comparator index over a three-year
period commencing on 1 January each year. The fair-value calculations for the awards that were made in 2023 therefore
include an allowance for the actual performance of the Company’s share price relative to the index over the period
between 1 January 2023 and the various award dates.
Charge to the Consolidated Statement of Comprehensive Income
The table below sets out the charge to the Consolidated Statement of Comprehensive Income in respect of the share-
based payment awards:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Equity-settled share-based payment expense | 5.4 | 20.5 |
Cash-settled share-based payment expense | (0.3) | 0.5 |
Total share-based payment expense | 5.1 | 21.0 |
Liabilities recognised in the Statement of Financial Position
The liabilities recognised in the Statement of Financial Position in respect of the cash-settled share-based payment
awards, and National Insurance obligations arising from share-based payment awards, are as follows. These liabilities are
included within other payables on the face of the Statement of Financial Position. None of the liability in respect of cash-
settled share-based payment awards at 31 December 2023 or 31 December 2022 is in respect of vested cash-settled
share-based payments.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Liability for cash-settled share-based payments | 1.2 | 2.5 |
| Liability for employer National Insurance contributions | ||
on cash-settled and equity-settled share-based payments | 3.5 | 7.8 |
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25. Interests in unconsolidated entities
Unconsolidated structured entities
The Group operates investment vehicles, such as unit trusts. Clients are able to invest in these directly, but also indirectly
through products offered by St. James’s Place UK plc and St. James’s Place International plc. As a result, the Group’s
insurance companies can be significant investors in the unit trusts. Note 2 sets out the judgements inherent in determining
when the Group controls, and therefore consolidates, the relevant investment vehicles.
The majority of the risk from a change in the value of the Group’s investment in unconsolidated unit trusts is matched by
a change in unit holder liabilities. The maximum exposure to loss, prior to considering unit holder liabilities, is equal to the
carrying value of the investment. This is recognised within investments in Collective Investment Schemes.
The following unit trust is not consolidated within the Group Financial Statements; however, the Group does act as the
fund manager of this unit trust.
| Percentage of | Net asset value | ||||||
| ownership interest | as at 31 December | ||||||
2023 | 2022 | Principal place | Nature of | 2023 | 2022 | ||
% | % | of business | relationship | Measurement method | £’Million | £’Million | |
| St. James’s Place Property | 1.21 | 0.98 | United Kingdom | Manager of | Fair value through | 786.7 | 1,021.4 |
| Unit Trust | unit trust | profit or loss | |||||
As at 31 December 2023 the value of the Group’s interests in St. James’s Place Property Unit Trust was £9.6 million
(2022: £10.0 million).
26. Interests in other entities
| Principal subsidiaries | |
Investment Holding Companies | St. James’s Place Wealth Management Group Limited |
| St. James’s Place DFM Holdings Limited | |
Life Assurance | St. James’s Place UK plc |
St. James’s Place International plc (incorporated in Ireland) 2 | |
Unit Trust Management | St. James’s Place Unit Trust Group Limited |
Unit Trust Administration and ISA Management | St. James’s Place Investment Administration Limited |
Distribution | St. James’s Place Wealth Management plc |
Management Services | St. James’s Place Management Services Limited 3 |
Treasury Company | St. James’s Place Partnership Services Limited |
Adviser Acquisitions | St. James’s Place Acquisition Services Limited |
Asia Distribution | St. James’s Place International Distribution Limited |
Discretionary Fund Management | Rowan Dartington & Co. Limited |
1
1
1 Directly held by St. James’s Place plc.
2 The Company also operates a branch in Singapore.
3 The Company also operates a branch in the Republic of Ireland.
Ongoing solvency requirements within the life assurance, unit trust and financial services companies of the Group restrict
their ability to distribute all their distributable reserves.
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
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Included below is a full list of the entities within the St. James’s Place plc Group at 31 December 2023:
| Company | Country of | Audit | ||||
| Entity | number | Registered office | incorporation | Principal activity | exemption | |
Cabot Portfolio Nominees Limited | 03636010 | Temple Point, Redcliffe | England and Wales | Nominee company | Yes | |
| Way, Bristol, BS1 6NL, | ||||||
| United Kingdom | ||||||
Capstone Financial (HK) Limited | 1256431 | 8F Kailey Tower, 16 Stanley | Hong Kong | Financial advice | No | |
| Street Central, Hong | ||||||
| CGA Financial & Investment Services | 02666180 * | Kong | England and Wales | Financial advice | Yes | |
| Limited | ||||||
Dartington Portfolio Nominees Limited | 01489542 | Temple Point, Redcliffe | England and Wales | Nominee company | Yes | |
| Way, Bristol, BS1 6NL, | ||||||
Edwards Wealth Ltd (formerly JEWM Ltd) | 09229694 * | United Kingdom | England and Wales | Financial advice | Yes | |
Future Proof Limited | 07608319 * | England and Wales | Financial advice | Yes | ||
| Ian Cockbain Wealth Management | 04639701 * | England and Wales | Financial advice | Yes | ||
| Limited | ||||||
Lewington Wealth Management Limited 04290504 * | England and Wales | Financial advice | Yes | |||
Linden House Financial Services Limited 02990295 * | England and Wales | Financial advice | Yes | |||
M.H.S. (Holdings) Limited | 00559995 * | England and Wales | Non-trading | Yes | ||
| Perennial Financial Management | 04609753 * | England and Wales | Financial advice | Yes | ||
| Limited | ||||||
Policy Services Limited | SC230167 | Oracle Campus, | Scotland | Financial advice | No | |
| Blackness Road, | ||||||
| Linlithgow, West Lothian | ||||||
Reflect Financial Limited | 04373946 * | EH49 7BF, United Kingdom | England and Wales | Financial advice | Yes | |
Rowan Dartington & Co. Limited | 02752304 * | England and Wales | Stockbroker and | No | ||
| investment manager | ||||||
Rowan Dartington Holdings Limited | 07470226 * | England and Wales | Holding company | Yes | ||
SJP Legacy Holdings Ltd | SC492906 | Oracle Campus, | Scotland | Holding company | Yes | |
| Blackness Road, | ||||||
| Linlithgow, West Lothian | ||||||
| EH49 7BF, United Kingdom | ||||||
SJP Partner Loans No. 1 Limited | 11390901 | 10th Floor, 5 Churchill | England and Wales | Securitisation | No | |
| Place, London E14 5HU, | ||||||
| United Kingdom | ||||||
St. James’s Place (Hong Kong) Limited | 275275 | 1st Floor, Henley Building, | Hong Kong | Overseas distribution | No | |
| 5 Queen’s Road Central, | ||||||
| Hong Kong | ||||||
St. James’s Place (Middle East) Limited | 6826 | Gate District Precinct | United Arab | Overseas distribution | No | |
| Building 03, Unit “Precinct | Emirates | |||||
| 3-7th Floor-Units 706,707 | ||||||
| & 708” Level 7, Dubai | ||||||
| International Financial | ||||||
| Center, United Arab | ||||||
St. James’s Place (PCP) Limited | 02706684 * | Emirates, PO Box 507256 | England and Wales | Transaction and servicing | Yes | |
| of SJP income streams | ||||||
| St. James’s Place (Singapore) | 20040 | 6398R | 1 Raffles Place, #15-61 | Singapore | Financial advice | No |
| Private Limited | One Raffles Place, 048616, | |||||
| St. James’s Place Acquisition Services | 07730835 * | Singapore | England and Wales | Adviser acquisitions | Yes | |
| Limited | ||||||
| St. James’s Place Corporate Secretary | 09131866 * | England and Wales | Corporate secretary | Yes | ||
| Limited | ||||||
St. James’s Place DFM Holdings Limited | 09687687 * | England and Wales | Holding company | Yes | ||
| St. James’s Place International (Hong | 2207694 | 1st Floor, Henley Building, | Hong Kong | Life assurance | No | |
| Kong) Limited | 5 Queen’s Road Central, | |||||
| St. James’s Place International | 08798683 * | Hong Kong | England and Wales | Holding company | Yes | |
| Distribution Limited | ||||||
St. James’s Place International plc | 185345 | Fleming Court, Flemings | Ireland | Life assurance | No | |
| St. James’s Place Investment | 08764231 * | Place, Dublin 4, Ireland | England and Wales | Unit trust administration | No | |
| Administration Limited | and ISA manager |
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| Company | Country of | Audit | ||||
| Entity | number | Registered office | incorporation | Principal activity | exemption | |
| St. James’s Place Management | 02661044 | England and Wales | Management services | No * | ||
| Services Limited | ||||||
St. James’s Place Nominees Limited | 08764214 | England and Wales | Nominee company | Yes * | ||
| St. James’s Place Partnership Services | 08201211 | England and Wales | Treasury company | No * | ||
| Limited | ||||||
St. James’s Place UK plc | 02628062 | England and Wales | Life assurance | No * | ||
| St. James’s Place Unit Trust Group | 00947644 | England and Wales | Unit trust management | No * | ||
| Limited | ||||||
| St. James’s Place Wealth Management | 1511517 | 1st Floor, Henley Building, | Hong Kong | Overseas distribution | No | |
| (Shanghai) Limited | 5 Queen’s Road Central, | |||||
| St. James’s Place Wealth Management | 02627518 | Hong Kong | England and Wales | Holding company | No * | |
| Group Limited | ||||||
| St. James’s Place Wealth Management | 20132345 | 3N | 1 Raffles Place, #15-61 | Singapore | Holding company | No |
| International Pte. Ltd | One Raffles Place, 048616, | |||||
| St. James’s Place Wealth Management | 04113955 | Singapore | England and Wales | UK distribution | No * | |
| plc | ||||||
Technical Connection Limited | 03178474 | England and Wales | Tax and advisory services | Yes * | ||
Tivoli Private Clients Limited | 14320641 | England and Wales | Non-trading | No * | ||
Tring Financial Management Limited | 05487108 | England and Wales | Policy administration | Yes * | ||
Virtue Money Limited | SC346827 | Oracle Campus, | Scotland | Holding company | Yes | |
| Blackness Road, | ||||||
| Linlithgow, West Lothian | ||||||
| EH49 7BF, United Kingdom |
* Indicates that the registered office is St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP.
The Group acquired Ian Cockbain Wealth Management Limited (04639701) on 30 November 2023 and incorporated
St. James’s Place (Middle East) Limited (6826) on 24 April 2023. The Group sold Stafford House Investments Limited
(03866935) on 30 November 2023.
The following subsidiaries were dissolved during the year:
Where indicated in the table, subsidiaries of St. James’s Place plc have taken advantage, or are expected to take advantage,
of the exemption from statutory audit granted by section 479A of the Companies Act 2006, except for Tivoli Private Clients
Limited where St. James’s Place plc have taken advantage, or are expected to take advantage, of the exemption from
statutory audit granted by section 394A and section 448A of the Companies Act 2006. In accordance with section 479C,
St. James’s Place plc has guaranteed all the outstanding liabilities as at 31 December 2023 of these companies.
All Group companies have an accounting reference date of 31 December. The tax residency of each subsidiary is the same
as the country of incorporation.
100% of the equity share capital is held for the subsidiaries listed in the table above, with the exception of:
the Group. Note that all assets and liabilities of SJP Partner Loans No.1 Limited are restricted and ring-fenced from the
other assets and liabilities of the Group;
outside the Group; and
26. Interests in other entities continued
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Financial Statements
Notes to the Consolidated Financial Statements under
International Financial Reporting Standards
continued
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
Following an assessment of control in accordance with IFRS 10 it was determined that SJP Partner Loans No. 1 Limited and
Lewington Wealth Management Limited are controlled by the Group and thus consolidated.
In addition, the Group Financial Statements consolidate the following unit trusts, all of which are registered in England and
Wales. The registered address of the unit trust manager, St. James’s Place Unit Trust Group Limited, is St. James’s Place
House, 1 Tetbury Road, Cirencester, Gloucestershire GL7 1FP, United Kingdom.
St. James’s Place Adventurous Growth Unit Trust St. James’s Place Global Smaller Companies Unit Trust
St. James’s Place Adventurous
International Growth Unit Trust St. James’s Place Global Unit Trust
St. James’s Place Asia Pacific Unit Trust St. James’s Place Global Value Unit Trust
St. James’s Place Balance InRetirement Unit Trust St. James’s Place Greater European Progressive Unit Trust
St. James’s Place Balanced Growth Unit Trust St. James’s Place Growth InRetirement Unit Trust
St. James’s Place Balanced International Growth Unit Trust St. James’s Place International Equity Unit Trust
St. James’s Place Balanced Managed Unit Trust St. James’s Place Investment Grade Corporate Bond Unit Trust
St. James’s Place Conservative Growth Unit Trust St. James’s Place Japan Unit Trust
St. James’s Place Conservative
International Growth Unit Trust St. James’s Place Managed Growth Unit Trust
St. James’s Place Continental European Unit Trust St. James’s Place Money Market Unit Trust
St. James’s Place Corporate Bond Unit Trust St. James’s Place North American Unit Trust
St. James’s Place Diversified Assets (FAIF) Unit Trust St. James’s Place Polaris 1 Unit Trust
St. James’s Place Diversified Bond Unit Trust St. James’s Place Polaris 2 Unit Trust
St. James’s Place Emerging Markets Equity Unit Trust St. James’s Place Polaris 3 Unit Trust
St. James’s Place Global Absolute Return Unit Trust St. James’s Place Polaris 4 Unit Trust
St. James’s Place Global Emerging Markets Unit Trust St. James’s Place Prudence InRetirement Unit Trust
St. James’s Place Global Equity Unit Trust St. James’s Place Strategic Income Unit Trust
St. James’s Place Global Government Bond Unit Trust
1
St. James’s Place Strategic Managed Unit Trust
St. James’s Place Global Government
Inflation Linked Bond Unit Trust
2
St. James’s Place Sustainable & Responsible Equity Unit Trust
St. James’s Place Global Growth Unit Trust St. James’s Place UK Equity Income Unit Trust
St. James’s Place Global High Yield Bond Unit Trust St. James’s Place UK Unit Trust
St. James’s Place Global Quality Unit Trust St. James’s Place Worldwide Income Unit Trust
1 St. James’s Place Global Government Bond Unit Trust, formerly St. James’s Place Gilts Unit Trust.
2 St. James’s Place Global Government Inflation Linked Bond Unit Trust, formerly St. James’s Place Index Linked Gilts Unit Trust.
Individually immaterial associates
The Group also has interests in individually immaterial associates that are accounted for using the equity method.
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Aggregate carrying value of individually immaterial associates | 10.2 | 1.4 |
Aggregate amounts of the Group’s share of total comprehensive income | 0.1 | – |
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27. Related-party transactions
Transactions with associates and non-wholly-owned subsidiaries
Associates
Outstanding at the year-end were business loans of £2.9 million (2022: £1.2 million) to associates of the Group. During the
year £1.6 million (2022: £0.3 million) was advanced and £1.8 million (2022: £nil) was repaid. Business loans to associates are
interest-bearing (linked to the Bank of England base rate plus a margin) and repayable in line with the terms of the loan
contract. Interest of £nil was received during 2023 (2022: £nil).
In addition, commission, advice fees and other payments of £2.3 million were paid (2022: £0.4 million paid), under normal
commercial terms, to associates of the Group. The outstanding amount at 31 December 2023 was £0.5 million payable
(2022: £nil).
Non-wholly owned subsidiaries
Commission, advice fees and other payments of £3.8 million were paid (2022: £4.3 million paid), under normal commercial
terms, to non-wholly-owned Group companies. The outstanding amount at 31 December 2023 was £0.6 million payable
(2022: £0.1 million receivable).
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
£’Million | £’Million | |
Short-term employee benefits | 5.0 | 6.3 |
Post-employment benefits | 0.5 | 0.5 |
Share-based payments | 0.2 | 6.5 |
Total | 5.7 | 13.3 |
28. Events after the end of the reporting period
On the 27 February 2024, the Company signed an external debt facility for £250.0 million. Debt drawn is repayable over
2 years at a margin over a variable interest rate.
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Financial Statements
Notes to the Consolidated Financial Statements under
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continued
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Parent Company Financial
Statements under Financial
Reporting Standard 101
Parent Company Statement
of Financial Position 248
Parent Company Statement
of Changes in Equity 249
Notes to the Parent Company
Financial Statements 250
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Note
As at
31 December
2023
As at
31 December
2022
£’Million £’Million
Investment in subsidiaries 2 1,576.2 1,378.8
Current assets
Amounts owed by Group undertakings 6 143.8 283.9
Cash and cash equivalents – 0.1
Current liabilities
Corporation tax liabilities (5.0) (1.7)
Other payables – (0.1)
Net current assets 138.8 282.2
Net assets 1,715.0 1,661.0
Equity
Share capital 3 82.3 81.6
Share premium 233.9 227.8
Share option reserve 279.5 274.1
Miscellaneous reserves 0.1 0.1
Retained earnings 1,119.2 1,077.4
Total shareholders’ funds 1,715.0 1,661.0
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 £331.4 million (2022: £437.9 million) which can be seen in the
Statement of Changes in Equity.
The Parent Company Financial Statements on pages 248 to 253 were approved by the Board of Directors on 27 February 2024
and signed on its behalf by:
Mark FitzPatrick, Chief Executive Officer Craig Gentle, Chief Financial Officer
The Notes and information on pages 250 to 253 form part of these Parent Company Financial Statements.
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Financial Statements
Parent Company Statement of Financial Position
Registered number: 03183415
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
Note
Share
capital
Share
premium
Share option
reserve
Miscellaneous
reserves
Retained
earnings
Total
shareholders’
funds
£’Million £’Million £’Million £’Million £’Million £’Million
At 1 January 2022 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
Profit and total comprehensive
income for the year – – – – 331.4 331.4
Dividends 5 – – – – (289.6) (289.6)
Issue of share capital – – – – – –
Exercise of options 3 0.7 6.1 – – – 6.8
Cost of share options expensed
in subsidiaries – – 5.4 – – 5.4
At 31 December 2023 82.3 233.9 279.5 0.1 1,119.2 1,715.0
The Notes and information on pages 250 to 253 form part of these Parent Company Financial Statements.
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Parent Company Statement of Changes in Equity
DocuSign Envelope ID: 79FC00E3-662D-4A37-B2D9-B4C88D24DDE8
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, Middle East 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 2023.
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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Financial Statements
Notes to the Parent Company Financial Statements
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(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 2022 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
Share awards granted – 5.4 – 5.4
Share capital injection 7.0 – – 7.0
Capital contribution 185.0 – – 185.0
At 31 December 2023 1,478.5 279.5 (181.8) 1,576.2
The investment in subsidiaries’ net book value is broken down as follows:
31 December
2023
31 December
2022
£’Million £’Million
St. James’s Place Wealth Management Group Limited 1,189.1 1,004.1
St. James’s Place DFM Holdings Limited 107.6 100.6
Directly held investments 1,296.7 1,104.7
St. James’s Place Management Services Limited 210.5 205.9
St. James’s Place Wealth Management plc 62.1 62.1
Rowan Dartington & Co. Limited 5.8 5.0
St. James’s Place International plc 0.9 0.8
Technical Connection Limited 0.2 0.1
Stafford House Investments Limited – 0.2
Investments held due to share awards granted 279.5 274.1
Total 1,576.2 1,378.8
During the year the Company made a capital contribution of £185.0 million (2022: £136.5 million) to St. James’s Place Wealth
Management Group Limited.
The carrying value of the investment in subsidiaries 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 6.3% (2022: 7.0%).
It is considered that any reasonably possible levels of change in the key assumptions would not result in an impairment.
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3. Share capital
Number of
ordinary shares
Called-up
share capital
£’Million
At 1 January 2022 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
– Issue of shares – –
– Exercise of options 4,369,037 0.7
At 31 December 2023 548,604,794 82.3
Ordinary shares have a par value of 15 pence per share (2022: 15 pence per share) and are fully paid. The Company
received consideration of £6.8 million (2022: £8.8 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 2023 is £31,730 (2022: £30,487), which is borne by another entity
within the Group.
5. Dividends
The following dividends have been paid by the Company:
Year ended
31 December
2023
Year ended
31 December
2022
Year ended
31 December
2023
Year ended
31 December
2022
Pence per
share
Pence per
share £’Million £’Million
Final dividend in respect of 2021 – 40.41 – 218.9
Interim dividend in respect of 2022 – 15.59 – 84.7
Final dividend in respect of 2022 37.19 – 203.1 –
Interim dividend in respect of 2023 15.83 – 86.5 –
Total dividends 53.02 56.00 289.6 303.6
In respect of 2023 the Directors have recommended a 2023 final dividend of 8.00 pence per share. This amounts to
£43.9 million and will, subject to shareholder approval at the Annual General Meeting, be paid on 24 May 2024 to those
shareholders on the register as at 26 April 2024.
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
2023
31 December
2022
£’Million £’Million
Amounts owed by Group undertakings
St. James’s Place Partnership Services Limited 143.8 283.9
Total 143.8 283.9
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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Financial Statements
Notes to the Parent Company Financial Statements continued
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During the year, the Company received £315.0 million (2022: £431.0 million) of dividends from subsidiary undertakings.
The total value of St. James’s Place funds under management (FUM) held by related parties of the Company as at
31 December 2023 was £17.5 million (2022: £41.1 million). The total value of dividends paid to related parties of the Company
during the year was £1.0 million (2022: £0.8 million).
The following wholly-owned subsidiaries of St. James’s Place plc have taken advantage, or are expected to take
advantage, of the exemption from statutory audit granted by section 479A of the Companies Act 2006, except for
Tivoli Private Clients Limited where St. James’s Place plc have taken advantage, or are expected to take advantage,
of the exemption from statutory audit granted by Section 394A and section 448A 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 2023 of:
Cabot Portfolio Nominees Limited 03636010
CGA Financial & Investment Services Limited 02666180
Dartington Portfolio Nominees Limited 01489542
Edwards Wealth Ltd (formerly JEWM Ltd) 09229694
Future Proof Limited 07608319
Ian Cockbain Wealth Management Limited 04639701
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
Rowan Dartington Holdings Limited 07470226
SJP Legacy Holdings Ltd SC492906
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
St. James’s Place (PCP) Limited 02706684
Technical Connection Limited 03178474
Tivoli Private Clients Limited 14320641
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.
9. Events after the end of the reporting period
On 27 February 2024, the Company received dividends of £260.0 million from its subsidiary undertaking, St. James’s Place
Wealth Management Group Limited. On the same date, the Company also received £190.0 million from a wholly owned
subsidiary, St. James’s Place UK plc. The loan is unsecured with a variable interest rate and repayable after ten years.
In addition, on 27 February 2024, the Company agreed to purchase £370.0 million ordinary shares in its subsidiary
undertaking, St. James’s Place Wealth Management Group Limited.
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Supplementary Information:
Consolidated Financial Statements
on a Cash result basis (unaudited)
Consolidated Statement
of Comprehensive Income on
a Cash result basis (unaudited) 255
Consolidated Statement
of Changes in Equity on
a Cash result basis (unaudited) 256
Consolidated Statement
of Financial Position on
a Cash result basis (unaudited) 257
Notes to the Consolidated
Financial Statements on
a Cash result basis (unaudited) 258
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Note
Year ended
31 December
2023
Year ended
31 December
2022
£’Million £’Million
Fee and commission income 2,835.2 1,854.2
Expenses
1
(2,392.4) (1,886.4)
Investment return
1
6 66.7 1.5
Net reinsurance expense 6 (39.8) –
Other finance income
1
31.5 15.1
Profit/(loss) before tax 501.2 (15.6)
Tax attributable to policyholders’ returns (444.2) 501.1
Tax attributable to shareholders’ returns 11.7 (75.4)
Total Cash result for the year 68.7 410.1
Pence Pence
Cash result basic earnings per share III 12.5 75.6
Cash result diluted earnings per share III 12.3 74.9
1 Restated to reclassify Other finance income. See Note 1a.
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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Strategic Report Governance Financial Statements Other Information
Consolidated Statement of Comprehensive Income
on a Cash result basis (unaudited)
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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 2022 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 23 – – – – (303.6) (303.6) (0.3) (303.9)
Issue of share capital 0.1 5.6 – – – 5.7 – 5.7
Exercise of options 23 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
Cash result for the year – – – – 68.5 68.5 0.2 68.7
Dividends 23 – – – – (289.6) (289.6) (0.3) (289.9)
Exercise of options 23 0.7 6.1 – – – 6.8 – 6.8
Consideration paid for own shares – – (0.5) – – (0.5) – (0.5)
Own shares vesting charge – – 3.9 – (3.9) – – –
Change in deferred tax – – – – (24.9) (24.9) – (24.9)
Impact of policyholder tax asymmetry – – – – (44.4) (44.4) – (44.4)
Reassurance recapture add-back – – – – 39.8 39.8 – 39.8
Change in goodwill, intangibles and
other non-cash movements – – – – (2.5) (2.5) – (2.5)
At 31 December 2023 82.3 233.9 (0.7) 2.5 814.9 1,132.9 0.1 1,133.0
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 Changes in Equity
on a Cash result basis (unaudited)
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Note
31 December
2023
31 December
2022
£’Million £’Million
Assets
Property and equipment 12 153.1 145.7
Deferred tax assets 20.4 2.5
Investment in associates 10.2 1.4
Reinsurance assets
1
6.7 5.6
Other receivables
1
2,147.3 1,369.2
Income tax assets – 35.0
Fixed income securities 20 8.2 7.9
Investment in Collective Investment Schemes 20 1,454.4 1,271.7
Cash and cash equivalents 20 285.4 253.3
Total assets 4,085.7 3,092.3
Liabilities
Borrowings 19 251.4 163.8
Deferred tax liabilities 414.5 165.1
Insurance contract liabilities
1
18.2 17.9
Other provisions 18 500.1 46.0
Other payables
1
1,757.0 1,319.6
Income tax liabilities 11.5 –
Total liabilities 2,952.7 1,712.4
Net assets 1,133.0 1,379.9
Shareholders’ equity
Share capital 23 82.3 81.6
Share premium 233.9 227.8
Shares in trust reserve (0.7) (4.1)
Miscellaneous reserves 2.5 2.5
Retained earnings 814.9 1,071.9
Shareholders’ equity 1,132.9 1,379.7
Non-controlling interests 0.1 0.2
Total shareholders’ equity on a Cash result basis 1,133.0 1,379.9
Pence Pence
Net assets per share 206.5 253.6
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
The Note references above cross-refer to the Notes to the Consolidated Financial Statements under IFRS.
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Consolidated Statement of Financial Position
on a Cash result basis (unaudited)
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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 14 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 11 to the Consolidated Financial Statements.
3. Equity-settled share-based payment expense is removed from the Statement of Comprehensive Income on a Cash
result basis, and the relevant equity balances removed from the Statement of Financial Position on a Cash result basis.
Share-based payment balances are set out in Note 24 to the Consolidated Financial Statements.
4. Non-unit-linked insurance contract liabilities and reinsurance assets, as set out in Note 17 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.
7. Amounts due from the reinsurer, arising from the reinsurance recapture, are removed from the Statement of
Comprehensive Income on a Cash result basis, consistent with the exclusion of the associated reinsurance asset from
the Statement of Financial Position on a Cash basis.
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Financial Statements
Notes to the Consolidated Financial Statements
on a Cash result basis (unaudited)
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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 2023 is set out in Section 2.2 of the financial review. The reconciliation as at 31 December 2022 is set out below.
31 December 2022
IFRS
Balance Sheet Adjustment 1 Adjustment 2
Solvency II
Net Assets
Balance Sheet
£’Million £’Million £’Million £’Million
Assets
Goodwill 33.6 – (33.6) –
Deferred acquisition costs
1
336.6 – (336.6) –
Purchased value of in-force business 11.2 – (11.2) –
Computer software 33.3 – (33.3) –
Property and equipment 145.7 – – 145.7
Deferred tax assets
1
12.5 – (10.0) 2.5
Investment in associates 1.4 – – 1.4
Reinsurance assets
1
54.6 – (49.0) 5.6
Other receivables
1
2,977.2 (1,604.8) (3.2) 1,369.2
Income tax assets 35.0 – – 35.0
Investment property 1,294.5 (1,294.5) – –
Equities 103,536.0 (103,536.0) – –
Fixed income securities 27,552.7 (27,544.8) – 7.9
Investment in Collective Investment Schemes 5,735.4 (4,463.7) – 1,271.7
Derivative financial instruments 3,493.0 (3,493.0) – –
Cash and cash equivalents 6,432.8 (6,179.5) – 253.3
Total assets 151,685.5 (148,116.3) (476.9) 3,092.3
Liabilities
Borrowings 163.8 – – 163.8
Deferred tax liabilities 162.9 – 2.2 165.1
Insurance contract liabilities
1
470.5 (414.9) (37.7) 17.9
Deferred income 530.4 – (530.4) –
Other provisions 46.0 – – 46.0
Other payables
1
2,180.7 (842.0) (19.1) 1,319.6
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) – –
Total liabilities 150,413.7 (148,116.3) (585.0) 1,712.4
Net assets 1,271.8 – 108.1 1,379.9
1 Restated to reflect the adoption of IFRS 17. See Note 1a.
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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III. Cash result earnings per share
Year ended
31 December
2023
Year ended
31 December
2022
£’Million £’Million
Cash result earnings
Cash result (for both basic and diluted EPS) 68.7 410.1
Million Million
Weighted average number of shares
Weighted average number of ordinary shares in issue (for basic EPS) 547.6 542.7
Adjustments for outstanding share options 8.8 5.1
Weighted average number of ordinary shares (for diluted EPS) 556.4 547.8
Pence Pence
Cash result earnings per share (EPS)
Cash result basic earnings per share 12.5 75.6
Cash result diluted earnings per share 12.3 74.9
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Financial Statements
Notes to the Consolidated Financial Statements
on a Cash result basis (unaudited)
continued
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Other
Information
Shareholder information 262
How to contact us and advisers 263
Our scenario analysis 264
Aligning our progress with recognised
frameworks 272
Glossary of alternative
performance measures 276
Glossary of terms 279
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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 group, 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 1,980 46.24% 690,377 0.13%
1,000–9,999 1,562 36.48% 4,754,225 0.87%
10,000–99,999 435 10.16% 15,207,641 2.77%
100,000 and above 305 7.12% 527,952,551 96.23%
4,282 100.00% 548,604,794 100.00%
2024 financial calendar
Ex-dividend date for 2023 final dividend 25 April 2024
Record date for 2023 final dividend 26 April 2024
Announcement of first-quarter new business 30 April 2024
Annual General Meeting 15 May 2024
Payment date for 2023 final dividend 24 May 2024
Announcement of interim results and second-quarter new business 30 July 2024
Ex-dividend date for 2024 interim dividend 22 August 2024
Record date for 2024 interim dividend 23 August 2024
Payment date for 2024 interim dividend 20 September 2024
Announcement of third-quarter new business 17 October 2024
The above dates are subject to change and further information on the 2024 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 Accounts and the
Notice of Annual General Meeting through the internet rather than receiving them by post, please register at
www.investorcentre.co.uk/ecomms.
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How to contact us
Registered office
Tel: 01285 640302
www.sjp.co.uk
Chair
Paul Manduca
Email: chair@sjp.co.uk
Chief Executive Officer
Mark FitzPatrick
Email: ceooffice@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
Eilís 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
J.P. Morgan Cazenove Limited
25 Bank Street
London
E14 5JP
Bank of America Securities Incorporated
2 King Edward Street
London
EC1A 1HQ
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Scenario analysis is a way of looking to
understand and plan for a range of potential
future outcomes for our investment universe.
We look specifically at our investment universe
for this analysis as it represents a core part of
our business model.
We use scenario analysis in two key ways in our investment
proposition.
Firstly, we assess how our fund managers undertake
climate scenario analysis in their own decision-making
and we monitor this within our annual responsible
investment assessment. This evaluates how managers
utilise scenario analysis when considering material
climate risks and opportunities for companies within their
investment process. The results of this assessment form a
core pillar of our analyst team’s monitoring, our Investment
Committee’s oversight and our manager research process.
By ensuring our managers are applying their own climate
scenario analysis to their investment process, we can gain
a level of assurance that potential future climate risks are
being considered and mitigated during their investment
decision-making.
Secondly, we continue to conduct higher-level, central
scenario analysis as part of our annual TCFD Entity
reporting. We are pleased to continue working with our
specialist scenario analysis modellers, BlackRock-Baringa,
to this end. However, as for many in our industry, the
central quantitative scenario analysis process is still at
an emerging stage. Further standardisation of data inputs
and modelling assumptions will help to build sophistication
over time, and we will continue to seek to improve.
By modelling the risks and opportunities, companies and
fund managers should be able to make better investment
decisions in the future, avoid the worst risks and seize
opportunities. This feedback cycle is not (and cannot be,
with reasonable accuracy) factored into the modelling,
but can give us confidence that, all else being equal,
the resilience of investment performance may be greater
under the scenarios than is shown in the quantitative data.
Our scenarios
Our central scenario analysis is based on three climate
scenarios constructed by the Network for Greening the
Financial System (NGFS), an institution recognised for its
research on climate pathways and commonly used by
central banks as a foundation for their climate analysis.
Orderly, Disorderly and Hothouse World are the three
specific NGFS scenarios we utilise and are widely accepted
as industry-standard pathways which provide a broad
range of future projections highlighting the impact of
physical and transitional risk. The first represents a smooth
and orderly transition, the second involves a disorderly
transition, and the third incorporates more extreme
physical risks due to a lack of climate-related policy.
BlackRock-Baringa then take these scenarios and,
through their modelling, draw out the Company, sector
and portfolio-level implications. They have used the
NGFS phase III climate scenarios for this year’s modelling.
It is important to remember that the scenarios are not
intended to be an accurate projection of the future state
of the economy; rather they give a directional indication of
plausible impacts under each scenario. Building scenarios
requires modellers to make a very large number of
assumptions – any of these could prove to be incorrect
or misjudged and this uncertainty has the potential to
materially alter or nullify all, or key parts, of our scenarios.
The specific NGFS Scenarios include:
Orderly – Net Zero 2050
Approximate global warming by 2100: 1.5°C
A scenario that limits global warming to 1.5°C, reaching net zero CO
2
emissions around 2050. The scenario assumes
climate polices are introduced immediately with a ‘smooth’ implementation globally. There are also significant
advances in climate technological innovation. Physical climate risks are much lower relatively, but transition risks
and opportunities are high in this scenario.
Disorderly – Delayed Transition
Approximate global warming by 2100: 1.5°C to 2°C
Delayed transition assumes global emissions do not decrease until 2030 and an ambitious policy response is
subsequently needed to limit global warming to below 2°C. This scenario assumes disordered policy action across
regions, with a rapid rate of change driving more specific sector risks. Transition risk in this scenario remains high
and physical risks are higher than the net zero 2050 scenario.
Hothouse World
Approximate global warming by 2100: 3°C+
A hot-house scenario assumes only current policies are preserved, resulting in continued emissions increases and
a 3°C warming. Whilst this scenario assumes low transition risks and opportunities, it leads to severely higher physical
risks across the globe and potentially irreversible changes to the earth’s ecosystems and land systems.
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Transition risks & opportunities
What are transition risks and opportunities?
Transition risks and opportunities are the impacts
manifesting from changes in the economy, regulation
and financial markets that will be required to limit long-
run increases in global temperature. These may include
increased ambition and Scope of regulation, changes
in demand for goods and services, and the rate of
technological innovation. For our scenario modelling, the
trajectory of future carbon prices (the regulatory cost of
emitting carbon into the atmosphere) is a crucial proxy
with which the industry can model the potential intensity of
carbon regulation and the impact on company valuations
and future profitability.
Within each of the three scenarios, transition risks will
manifest differently, both in terms of the intensity of the
risks and the expected timing of their impact. For example,
within the Orderly scenario the model assumes a significant
amount and speed of technological innovation. This will
provide a financial opportunity for companies – those who
are best positioned to benefit from the transition to a low
carbon economy – to grow and develop new solutions
to reach net zero.
On the other hand, significant transitional risks are also
assumed, given the structural change needed to be
undertaken in certain industries in response to government
policy, market demand and the impact of a carbon price;
these adjustments will entail direct and indirect costs for
businesses, at varying levels depending on their ability
to adapt.
Within the Disorderly scenario, government policies to
address global warming are assumed to be delayed until
2030, resulting in a more aggressive and extensive policy
approach needing to be taken after this point. Whilst there
is a smaller amount of time within the modelling period
where transitional risks will be affecting companies –
i.e. it will be business as usual for a period of time – the
eventual impact may be higher as companies will have
less time to adapt, potentially creating more uncertain
market conditions and volatility.
Conversely, the Hot House scenario experiences minimal
transition risk. This is primarily due to a lack of carbon
pricing being implemented. Whilst this significantly
reduces the transitional risk impact on businesses, the
accompanying physical climate risk with a higher warming
scenario presents additional impacts for sectors and
individual companies.
Modelled global carbon price trajectory – based on NGFS scenarios
Carbon price (US $/tonne CO
2
e)
2015 2020 2025 2030 2035 2040 2045 2050
$800
$600
$400
$200
$0
Orderly Disorderly Hothouse
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Transition risks & opportunities continued
Modelled impact on our investment universe
The financial impact of transitional risks can be modelled
by combining the factors associated with the different
climate scenarios, e.g. regulatory pressure, energy system
change and changes in consumer demand, with individual
company characteristics, e.g. financial strength and
market share, to calculate a financial impact on the
company value.
As discussed on the previous page, the extent and
the impact of transition risk will be different in different
scenarios; likewise, between sectors the impact on
companies will vary significantly. In aggregate, in the
financial services sector and SJP’s investment universe,
we see the highest transitional risk within the Disorderly
scenario. The delayed action on policy responses sees
a period of significant disruption from 2030, when a rapid
ramp-up of regulation and associated costs and
disturbance to business is likely to affect valuations the
most. Within this period there is also likely to be a rapid
divergence in individual company valuations, with some
businesses weathering the transition and others failing
to adapt and ultimately failing.
As can be seen by the aggregate numbers of overall
transition risk, climate-related opportunities for businesses
are higher in the Orderly scenario given the slower pace
and longer timescale for the carbon transition. For
example, utilities with exposure to low carbon electricity
and car manufacturers with electric vehicle exposure are
likely to benefit from the Orderly scenario, whereas a
Disorderly scenario brings quicker transitional disruption
and less time and opportunity for businesses to react
appropriately.
For both the Orderly and Disorderly scenarios, there is
significant divergence in transitional risk between sectors.
For example, within carbon-intensive sectors the financial
impact of a higher carbon price is much larger. Divergence
in sector risks will also be driven by factors such as shifting
consumer demand, e.g. potentially a higher uptake of
electric vehicles. This illustrates well how the energy
transition will not just represent risks to business, but also
provide opportunity for companies which are strategically
positioned to benefit from these larger shifts.
Orderly vs Disorderly risk
1
Aggregate numbers: overall transition risk
(risk-adjusted value, %)
10%
5%
-5%
-10%
0%
Orderly Disorderly
Orderly vs Disorderly risk
s modelled impact on our investment universe
1
Sector-specific (risk-adjusted value, %)
Comms
services
Consumer
discretionary
Consumer
staples
Energy
Financials
Health
care
Industrials
IT
Materials
Real
estate
Utilities
20%
10%
-20%
-50%
-10%
-30%
-40%
0%
-60%
Orderly Disorderly
The energy sector sees higher value at risk in the Orderly scenario than in the Disorderly. This is primarily due to the significant disruption expected to
impact the sector from a high carbon price, which is modelled to be required to limit warming to below 2°C. The carbon price rises more in the Orderly
scenario than the Disorderly. In contrast, the utilities sector, buoyed by significant increases in demand arising from a swift transition to a low carbon
electricity system, has the potential to capture financial opportunities and increase company value.
1 The scope of the data represented in this graph is limited to our equity and debt for listed companies. It does not include real estate or Rowan
Dartington.
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As well as sectors, the geography in which businesses
operate will affect exposure to transition risk. The key
dynamic to note here is that there are limited differences
in the sector exposures despite different geography i.e. the
most at-risk sectors, such as Energy and Materials will still
be the most materially impacted despite slight regional
variation. The key exception is the Utilities sector, where
recent track record in decarbonising has driven the climate
model for an Orderly scenario to expect some companies
to continue to decarbonise and seize the positive
opportunities arising from transitional dynamics
in the sector to ultimately drive value creation.
Transition Climate Adj. Value % of our investment universe
1
None -0.16% -1.21% 0.05% -1.01% -0.19% -1.98% -2.55% -2.62%
Utilities 13.97% 5.87% -64.57% -18.84% 23.17% -15.74% -55.92%
Real Estate -0.82% -0.14% -1.31% -1.78% -0.41% -0.27% -4.62%
Materials -9.94% -22.37% -8.25% -13.93% -10.08% -11.86% -12.64%
Information Technology -0.66% -2.33% -2.86% -6.52% -1.81% -8.90% 0.72%
Industrials -6.67% -3.07% -2.30% 1.65% -3.45% -10.98% -4.99% -0.99%
Healthcare 0.41% -0.06% -0.55% -0.53% 0.35% -0.09% -1.96%
Financials 0.56% 1.56% 3.91% 0.63% 0.75% 0.94% -1.94% 0.01%
Energy -50.81% -65.48% -59.55% -48.87% -49.60% -42.80% -53.87% -1.85%
Consumer Staples -2.79% -4.25% -3.51% -4.97% -5.41% -4.47% -7.05%
Consumer Discretionary -2.32% -1.02% -4.12% -0.65% -0.50% -3.87% -4.06%
Communication Services 0.11% 0.67% 1.51% 0.56% 0.29% -0.01% -1.42%
United
Kingdom
Europe
ex UK
Japan Asia Pacific
ex Japan
North
America
Emerging
America
Africa and
Middle East
Other
-75 -50 -25 0 25
Transition Climate Adj. Value %
1 The scope of the data represented in this graph is limited to our equity and debt for listed companies. It does not include real estate or Rowan
Dartington.
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Physical risks
What are physical climate risks?
Physical climate risk can manifest in both acute and
chronic ways. Acute risks are event-driven and tend to be
over shorter time horizons; such events include wildfires,
storms and flooding. Chronic risks are often more systemic
and occur over the long-term; examples include an
accelerating loss of biodiversity, a rise in diseases in
temperate areas, or human displacement from newly
uninhabitable regions. Physical climate risks have both
direct consequences, e.g. financial damage to property,
infrastructure or transportation, and indirect consequences,
e.g. supply chain disruption, widespread disease, and
impacts on markets and companies.
The Orderly scenario represents the future pathway in
which global temperature increases are lowest and hence
the most damaging physical climate risks associated with
this warming are limited. In contrast, the Hot House World
scenario – in which temperature rise continues at pace,
resulting in a ‘3ºC plus’ warming from pre-industrial levels
– has the potential for both acute and chronic physical
climate risks to be the most significant. The scale of the
financial impact from physical climate risk under this
scenario has been widely reported on by central banks
and various climate bodies, given the unprecedented
economic impact on markets and companies.
Modelled impact on our investment universe
For each of the three climate scenarios our analysis
combines direct and indirect physical risk impacts,
e.g. flood damage, heat stress and wildfires, with company
exposure, e.g. geographic location and financial
characteristics, to model an adjusted value for each
company we invest in. However, physical risk events are
notoriously difficult to model and can have highly localised
impact. The analysis is not a prediction of future events.
The Hot House scenario modelling suggests heightened
physical risks across all sectors, given the increased
likelihood of significant acute and chronic physical risk
events in a warmer world. Unlike transitional risk, physical
risk manifests more evenly across the different sectors.
This is driven by chronic physical risks which are wide-
ranging and have the potential to affect a number of
different sectors. For example, higher temperatures are
expected to hit the productivity of labour workforces
around the world and reduce output for a range of
companies across different sectors of the economy.
Orderly, Disorderly and Hothouse world physical climate risk projections
1
By sector in the SJP investment universe
Comms
services
Consumer
discretionary
Consumer
staples
Energy Financials Health care Industrials IT Materials Real estate Utilities
0%
-4%
-8%
-2%
-6%
-10%
1 The scope of the data represented in this graph is limited to our equity and debt for listed companies. It does not include real estate or Rowan
Dartington.
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Whilst sector impacts of physical climate risks are fairly
broadly distributed, differences across geographies and
regions are more pronounced. Our modelling shows that
the exposure of companies to physical risks, both acute
and chronic, is likely to vary significantly by geography.
This is driven by a number of factors such as: the specific
location of companies and their infrastructure’s
vulnerability to localised extreme weather risk; the potential
adaptation measures taken, e.g. how businesses have
managed the threat of physical risks such as flood
protection; and their market e.g. labour market resilience
to economic shocks caused by physical climate risk.
Specifically, our modelling suggests that companies with
higher exposure to geographies in close proximity to the
equator are likely at higher risk of physical climate impacts
due to more extreme heat stress and changes to seasonal
weather events such as monsoons and tropical cyclones.
We can map these findings against data showing where
SJP’s investment exposure is concentrated by geography.
SJP’s investment and exposure to physical risk: Hot House World
1
0% -2% -4%
North America
Europe ex UK
UK
Japan
Emerging America
Africa &
Middle East
Asia
Pacific
ex Japan
Hot House World – current policies – average risk (2050)
Investment exposure %
Higher exposure, lower risk Higher exposure, higher risk
Lower exposure, higher riskLower exposure, lower risk
-6% -8%
-10%
40%
10%
0%
30%
20%
1 The scope of the data represented in this graph is limited to our equity and debt for listed companies. It does not include real estate or Rowan
Dartington.
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Modelling caveats and assumptions
As mentioned before, climate scenario modelling is
extremely challenging owing to the large number of
underlying assumptions, the complexity of interconnected
systems and the plethora of knock-on effects even small
changes in the modelling can have on the output.
More specifically, the climate scenario model does not
account for future changes to either our investment
universe (the allocation of capital) or how individual
companies may adapt to changing conditions. The climate
modelling is based on a snapshot of our current investment
holdings, which is not fully representative since in reality,
through time, our fund managers are constantly analysing
new investment opportunities, managing risk and
engaging with companies in their portfolios. Engagement
on climate risks and opportunities, will be specifically
focused on company resilience and the extent to which
businesses have abilities and strategies to adapt to
changing market conditions and long-term risks. This
explains in part, why headline risk metrics related to
climate will appear disproportionately negative, as the
model does not fully assess the opportunities associated
with a transition to a lower carbon economy.
Another caveat is that, whilst top down model assumptions
will change in the various NGFS scenarios, the model
assumes company behaviour remains consistent and is
limited to relying on current company transition plans and
strategic policy. In reality, however, plans and policies are
dynamic: we would expect companies to develop their
future business models and strategic policy to incorporate
climate risk and opportunity and as such refine their
transition plans.
Furthermore, the modelling does not fully incorporate
second-order effects of climate risk and opportunity, such
as physical risk events driving higher incidences of disease.
The unwinding of such second-order effects and their
subsequent impacts on company value chains are
extremely difficult to fully capture and model. Due to their
complex, globally interconnected nature therefore, it is
common for climate models industry-wide to only focus
on first-order impacts. We hope to be able to introduce
more nuanced approaches as the modelling develops.
Our strategic resilience
Our investment management approach is the first line
of defence for SJP’s strategic resilience to transitional risk.
This resilience is two-fold: both through our managers’
ability to manage their portfolios to mitigate climate risk
and capitalise on opportunity, and through our ability to
allocate capital to fund managers and strategies where
climate risk mitigation is integrated into decision-making.
Our investment management approach and investment
beliefs focus on bottom-up research, strategic asset
allocation, diversification and responsible investment;
all of these can help mitigate the concentration of climate
risk and allow us to capitalise on the opportunity under
various climate scenarios.
Furthermore, our investment universe is well diversified
across sectors, regions and asset classes, further reducing
our risk and increasing our strategic resilience to climate-
related risk. As was seen from our scenario analysis,
transitional risk is concentrated within specific sectors
where carbon emissions are high, whilst physical climate
risk manifests more strongly in specific geographies. Our
globally diversified investment universe significantly
increases our overall strategic resilience to a potential
loss of value triggered by these risks.
Similarly, our strategic resilience to climate-related risk
is further bolstered by the ongoing implementation of our
responsible investment approach. We believe responsible
investing includes making decisions that support a smooth
and just transition and therefore, we consider the broader
social, economic and market impacts of divestment
carefully. We principally take an, engagement first,
approach to influence positive action. This approach
to stewardship promotes market resilience as well as
economy-wide and enduring change. To read more about
our stewardship approach, targeted engagements or
our divestment policy please read our Stewardship and
Engagement report https://www.sjp.co.uk/stewardship_
and_engagement_report_2022.
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Key areas identified that help strengthen our strategic approach include:
An annual responsible investment assessment
This is an annual monitoring process for all our
fund managers. The assessment looks in detail at
managers’ processes and how they are integrating
ESG factors into their investment decision-making, to
minimise risk and maximise opportunity. The
assessment provides deeper insight than just using
third-party data in isolation. Whilst we believe our
annual assessment is already robust and thorough,
we aim to continue to evolve our process, to gain a
deeper insight into areas such as the use of climate
scenarios, and looking at a fund manager’s physical
and transitional risk data inputs to see how these are
embedded within their decision-making.
Advocacy and best practice
We are a large asset owner with an extensive
network of fund managers across the globe. We set
expectations for them to be active stewards of capital
and to engage with the companies in which they
invest our clients’ money by setting well-informed
and precise objectives, holding businesses to
account, and measuring how progress is achieved
across ESG matters. Our ongoing engagement,
monitoring and due diligence of managers also
serves as a chance to advocate for best practice and
innovation regarding climate risk and opportunity
integration. We use our size and scale to broker
manager discussions on topics such as scenario
analysis and the consideration of new climate data
within individuals’ investment decision-making.
Robeco, our engagement specialists, also help us
maximise our influence in this important area by
engaging with companies on carefully selected
themes. You can view their latest report here:
www.sjp.co.uk/robecco_engagement_report_
Q4_2023.
Data insights and analysis
Insights from BlackRock-Baringa’s climate scenario
modelling provide an additional input to prioritise and
strengthen our manager monitoring. Whilst the data
is already used by the Responsible Investment team
to support fund manager engagement, helping us
verify and challenge information being provided by
them, we have made this information more readily
available so other investment teams can more easily
access and incorporate this type of information into
their monitoring workstreams. Embedding the
scenario testing analytics and additional climate
monitoring metrics within our investment risk system,
BlackRock Aladdin, has been central to this.
Dedicated internal resource
During 2023, we recruited a dedicated climate
investment analyst to support our overall approach
to responsible investment. This role is central in
supporting our Investment Analyst team by further
embedding climate principles within our select,
monitor, change process of fund managers. Similarly,
this resource is the driving force behind the execution
of our 2050 commitment, both through engagement
with priority managers and supporting our Portfolio
team with further embedding climate analysis within
our top-down portfolio construction process and
proposition design principles.
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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.
In 2020, we became a participant of the United Nations Global Compact. Within our Responsible Business Framework,
our material topics each contribute to progress against the United Nations Sustainable Development Goals (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 in their local community.
To provide relevant financial skills and education to our clients to give them the confidence to create the
future they want.
Our progress
In 2023, we continued to grow our partnership with national charity Young Money. In 2022 we committed
to 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. Since then
12 SJP-funded schools have been onboarded to the programme, with the first school achieving accreditation
in November 2023.
We also supported Redstart’s ‘Change the Game’ programme, a longitudinal study into the impact of
embedding financial education into the national curriculum. In addition to providing funding towards the
programme, SJP volunteers got directly Involved in delivering 18 financial education workshops throughout
the year.
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 2023, we made steady progress against our commitments to increase gender and ethnicity representation
in our employee base, and in September 2023 we achieved our target of 30% women in senior roles.
We continued our commitment to support mentoring programmes for women, completing our sixth year
with the 30% Club cross-sector mentoring programme supporting female development, and completing
the second year of our in-house mentoring programme for talented women in the pipeline for senior roles.
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. To support social mobility diversity in financial services, we actively
seek to support disadvantaged young people into financial services careers.
Our progress
In 2023, we continued to equip and empower employees to grow their career through our comprehensive
curriculum guides, workshops, virtual reality training and bespoke leadership blueprint.
We remain an accredited Real Living Wage employer and conduct regular equal pay reviews to ensure that
we are paying employees doing like-for-like roles equally.
We are a Disability Confident employer and were reaccredited with Leader status in 2023.
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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 2023, we continued to highlight sustainability considerations in our due diligence, conversations with
suppliers, and within our investment management approach.
In 2023, we reviewed our supplier due diligence process and minimum standards through a responsible
business lens, ensuring the minimum requirements that all suppliers meet align with our own Responsible
Business Framework. Where possible, we aim to procure through small, local suppliers to support our
communities.
We also worked with a variety of financial services institutions and trade bodies to help develop workable
solutions to implement sustainable disclosures that deliver transparency and aid client understanding.
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 2023 the SJP community raised £9.5m for the SJP Charitable Foundation. The Charitable Foundation
distributed £7.6m to 896 charities during the year to support inclusion and social mobility. In addition a
further £6.9m was pledged to support ongoing service delivery, embedding and developing of services
over the next three years.
We continued to build on our inclusion and employability partnerships including The Diversity Project, LGBT
Great, Stonewall, GAIN, 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
We have identified key suppliers to engage with on developing their climate approach and are advocating
to the landlords of our rented estate to pursue using 100% renewable energy and sending zero waste to
landfill. We are delighted that the carbon emissions intensity of SJP’s overall investment universe has
reduced by over 40%* from our baseline. Our business travel footprint is higher than we would like and
we are increasing our efforts to reduce this.
* Equity and debt for listed corporates and real estate. This is approximately 88% of our overall AUM.
Memberships and partnerships
We have evolved our approach to being a responsible business over the years collaborating with several external
initiatives for guidance, advice and direction on various issues, including some of our current memberships shown below.
These have influenced our investment strategy, engagement activities, approach to educating colleagues, and
assessment of our overarching responsible business goals. We are 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 responsible business 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 the we have responded to the reporting
standards under the Asset Management & Custody Activities.
Topic Accounting metric 2023 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 and
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 44 and 45. FN-AC-330a.1
Incorporation of
environmental,
social and
governance factors
in investment
management
and 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 employ some degree of
ESG integration. All funds must meet our minimum
standards which includes being a UN Principles of
Responsible Investment (UNPRI) signatory. We believe
integration is the consideration of ESG risk and opportunity,
but we do not rely upon divestment other than in extreme
circumstances.
2. £5.4 million (Sustainable and Responsible Equity Fund).
3. Our general approach is for engagement rather than
divestment with companies to drive positive change over
the longer term. However we do we have an exclusions
policy which covers all of our manufactured funds, where
applicable. Our exclusions policy can be found on our
website at www.sjp.co.uk/products-and-services/
investment/responsible-investing.
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 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 and investee engagement policies
and procedures 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
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Topic Accounting metric 2023 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. However, we note that
the Group saw a marked increase in the number of clients
registering complaints about whether they’ve received advice
historically and we have determined it necessary to undertake
a comprehensive review of client servicing records since 2018,
more details can be found in Note 18.
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:
There have been no losses as a result of insider trading claims.
FN-AC-510a.1
Description of whistleblowing
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 through various channels including phone and email.
Whistleblowing contact details are provided in our
whistleblowing policy and compliance manual. Our employees,
advisers and their support staff receive regular training on
whistleblowing arrangements. We comply with whistleblowing
regulations in the UK, Ireland, Singapore, Hong Kong and Dubai.
Further details can be found in our whistleblowing policy,
which is available to members of our internal community
through the SJP intranet and, for external parties, can be found
on our website.
FN-AC-510a.2
Activity
(1) Total registered and (2) total
unregistered assets under
management (AUM)
(1) £0
(2) £168.2 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 2023 funds under management stood at
£168.2 billion.
FN-AC-000.B
Financed
Emissions
Absolute gross financed emissions,
disaggregated by (1) Scope 1,
(2) Scope 2 and (3) Scope 3
We do not currently disaggregate the emissions of our
investment portfolio by scopes 1, 2, and 3
FN-AC-410b.1
Total amount of assets under
management (AUM) included in
the financed emissions disclosure
£135.4 billion FN-AC-410b.2
Percentage of total assets under
management (AUM) included in
the financed emissions calculation
The scope of this data is limited to our equity and debt for
listed companies and excludes real estate funds and Rowan
Dartington assets, in 2023 this was approximately 88% of AUM.
FN-AC-410b.3
Description of the methodology
used to calculate financed
emissions
We use carbon emissions data provided by MSCI. Emissions
from our investments are calculated by allocating emissions
to us based on how much of the company our funds own.
FN-AC-410b.4
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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 64.
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 European Embedded Value (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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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
excluded, except that arising from the
establishment of the exceptional
Ongoing Service Evidence provision;
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 Sections 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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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-position-related APMs continued
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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.
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.
Chief Operating Decision-Maker (CODM)
The Group Executive Committee (GEC) of the 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.
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.
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.
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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 term ‘Group’ refers to the Company together with
its subsidiaries as listed in Note 26 to the Consolidated
Financial Statements.
Group Executive Committee (GEC)
The GEC comprises the Executive Directors of the Board
and other members of senior management. It is via
the GEC that operational matters are delegated to
management. The GEC 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.
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.
Retention rate
The proportion of FUM retained over the period after
allowing for the effect of full and partial withdrawals,
but excluding the effect of intrinsic regular income and
maturity payments.
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Annual Report and Accounts 2023St. James’s Place plc
Other Information
Glossary of terms continued
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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.
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 (Middle East)
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.
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St. James’s Place plc
St. James’s Place House
1 Tetbury Road
Cirencester
Gloucestershire
GL7 1FP
T: 01285 640302
sjp.co.uk
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