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

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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