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Insights from City Analysts: Recommending Purchase of St. James’s Place Despite Recent Scandals

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May 1, 2024

Despite recent scandals and challenges, some City analysts see opportunity in St James’s Place, Britain’s largest wealth manager. Despite a significant drop in value earlier this year due to a historic overcharging scandal, analysts like Mark Fitzpatrick still consider the first quarter of the year as “good” for the company.

Although St James’s Place reported a decline in flows and faced pressure from regulators, its funds under management increased to £179 billion, driven by strong investment returns and growth in its client and adviser base. Despite the negative sentiment surrounding the company, analysts at Jefferies maintain a buy rating, citing potential positive signs for the longer term, such as growing adviser numbers and progress in reviewing client service records and fee structures.

Jefferies set a target price of 820p for St James’s Place, significantly higher than its current price of around 436p. Similarly, analysts at UBS have recommended buying based on better-than-expected investment returns. However, Numis analysts remain cautious due to regulatory uncertainties.

While the wealth management industry faces challenges, Panmure Gordon sees a clear opportunity in St James’s Place, noting its potential for growth with clearer and more transparent pricing structures. Despite recent setbacks, the increase in customers and advisers suggests a more positive outlook for the company, according to analysts.

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