St. James’s Place Plc SWOT & PESTLE Analysis

Strength

1. Sustainable fee-based income model that can generate profits: St. James’s Place operates a fee-based income model where we receive fees based on the level of client funds under management. The company offers a comprehensive investment, product and service proposition that is exclusive to the St. James’s Place Partnership and clients, and a support proposition that allows Partner businesses to thrive. Then it forges close, trusted relationships with its advisers and make their relationships with clients its priority. The company engages with stakeholders to better understand the strength of its proposition as well as areas for improvement. It provides Partner-specific support to underpin business ambitions. The UK based wealth management firm, achieves long-term growth through targeted investment. The company provides financial advice and also manages the assets it owns through its partnership. Its key aim is to attract, retain and grow client funds under management (FUM) by offering a high-quality service to the Partnership and clients. St James’s Place pursues a simple growth and support strategy, underpinned by a series of clear and focused strategic objectives. By following this methodology while garnering fees for the assets it manages, the company is able to grow not only its cash balances but provides value to its partners as well.

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Weakness

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Opportunity

1. Increasing demand for financial advice in UK market: St. James’s Place estimates that there are about 11 million individuals in its target market in the UK, with around half of them, currently seeking some form of financial advice. Although there has been a surging trend of low-touch, digital advice propositions in recent years, demand for personal, face-to-face advice has continued to grow as individuals lacking either the time, inclination or ability to manage their financial affairs, seek help from a trusted adviser. Factors driving this continued demand for advice include intergenerational wealth transfer, the complexity of personal taxation, the decline of defined benefit pension schemes, the flexibilities and complexities afforded to individuals via ‘pensions freedom’ and the scale and projected growth of the UK savings gap. While demand for advice continues to increase, the population of financial advisers across the UK is forecast to decline in the coming years as experienced advisers approach retirement or sell their businesses due to regulatory pressures. As a result, the ‘advice gap’ looks set to widen. Thus, with this trend the company should be ready and try to expand its number of advisors and leverage the growing demand to increase its profits in UK.

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Rising trends towards ESG investing methodology: The year 2020 saw environmental, social and governance (ESG) investment approaches become more mainstream, as consumer demand for more responsible investing, increased significantly. Responsible investment funds saw net retail sales of £7.1 billion in the first three quarters of 2020, up from £1.9 billion over the same period in the previous year according to The Investment Association. This growing consumer awareness highlights not only the need for wealth managers to be ESG-focused, but also the need for wealth managers themselves to be regarded as responsible businesses that create and foster broad value for all stakeholders. Due to the rapid development of ESG terminology and standards, there is a need for ongoing adviser training to keep pace with sector growth, which is expected to increase as the implementation of ESMA standards will require advisers to consider clients’ ESG preferences. The insurance and wealth management companies such as St James’s Place need to take this into consideration and try to train their advisors in these standards so that they do not miss out on the opportunity and the changing trend doesn’t lead to loss in clients. The companies need to update on their investing philosophy and must include some component of ESG investing methodology into it and update it at the earliest.