By Eva Mathews
(Reuters) - St. James's Place said on Tuesday it would revamp its fee structure to reduce overall ongoing charges for existing investments following pressure from UK financial regulators seeking to increase protections for savers and pension investors.
Last week, the FTSE 100 wealth manager said it was evaluating options in response to new rules by the Financial Conduct Authority (FCA) designed to crack down on products where it felt fees and charges do not represent fair value.
The FCA's Consumer Duty, described by the watchdog as core to its proactive supervision, came into force in July after a string of retail mis-selling scandals going back to the 1980s, from endowment mortgages to pensions and payment protection insurance.
The company said the revised structure would consist of an initial charge and ongoing charges but without early withdrawal fees or a gestation period for a vast majority of its investment bonds and pensions.
Charges across all its wrappers - assets grouped into single securities - will be separated into component parts instead of the being grouped in an all-inclusive disclosure.
The changes are aimed at reducing overall ongoing charges for existing investments across core products and will come into effect in the second half of 2025. However, it will reduce the group's underlying cash for the next few years, SJP said in a statement.
"There will be a material reduction in profitability, but STJ will remain profitable," analysts at Jefferies said in a note, adding that they did not expect further significant regulatory impacts on the business and the changes dealt with the question of its fees for the foreseeable future.
Its shares, down more than 35% in 2023, rebounded from losses of more than 5% in early trade to stand up 2.1% as of 0810 GMT.
The company said funds under management stood at 158.57 billion pounds ($193.25 billion) at end-Sept., up from 157.5 billion at the end of June. However, inflows of 0.91 billion pounds for the third quarter more than halved from a year earlier.
CEO Andrew Croft said the firm was seeing signs that inflation is moderating.
Smaller rival Jupiter Fund Management reported a fall in its third-quarter assets under management citing muted retail investor appetite, which sent its shares to a record low.
($1 = 0.8205 pounds)