For much of the past quarter century St James’s Place was a stock market darling as it rose from a start-up based in the Cotswold Hills to the largest wealth manager in the UK.
But the past two years have been bruising. About half its market value — or £3.8bn — has been wiped out as client inflows have slowed, several of its biggest funds have underperformed and regulators have cracked down on inappropriately high fees.
Now the FTSE 100 company is preparing for a change in leadership, appointing headhunter Russell Reynolds Associates to find a successor to chief executive Andrew Croft, according to people with knowledge of the matter.
Crunch interviews for the position are to be held next week. Mark FitzPatrick, a former chief executive of Prudential, is the leading candidate to replace him, although other candidates are also being considered. FitzPatrick and SJP declined to comment on the process.
Among the top priorities for an incoming chief executive would be managing scrutiny of the company’s fees. SJP said in July it would reduce some of its charges in response to the Financial Conduct Authority’s “consumer duty” regime, broad rules that require financial services companies to deliver “good outcomes” for customers.
A chunk of SJP’s 941,000 UK clients should benefit from lower annual fees. But investors worry that a lucrative business model serving well-heeled clients, many of whom lack experience managing investments themselves, is unravelling. The company produces most of its profits from annual charges.
“Historically SJP has always strongly defended its fee margins, and this is therefore a significant departure from that practice,” said David McCann, analyst at Numis. “Moreover, it raises the important question — is this just the tip of the iceberg?”
Founded in 1991 as J Rothschild Assurance, the company launched on the stock
