St James’s Place invested £3m in Asia biz in first half

St James’s Place, the UK wealth manager which acquired and re-branded the Singapore-based Henley Group advisory firm in 2014, spent £3m on building that business in the first six months of this year, it revealed in its first half results this morning.

This is 9% more than than the FTSE 100 firm spent on its Asia operation in the same period last year, the figures show, and about half what it spent in the 12 months to the end of last December.

Third-party funds under management in the Asia business grew by £434m, the firm said.

In its 80-page results statement, the company said its expansion into Asia through its operations in Singapore, Hong Kong and Shanghai was aimed at providing “diversification of our growth model through exporting our successful wealth management proposition to new markets, starting with the UK expat market”.

“Costs reflect both the ongoing operational costs, but also the development costs associated with growing these businesses to achieve sustainable scale,” the company said.

The details of St James’s Place’s spend on its Asia operation came in a results statement that saw net inflow of funds under management rise more than expected,  by 15% or £3.1bn, helping to boost total FUM to £65.6bn, after second-quarter net inflows set a new record for the company.

Pre-tax profit, as calculated under the IFRS standard, fell slightly in the six months to the end of June, to £97m from £103.7m, due to the need to pay more into the UK’s Financial Services Compensation Scheme, the hiring of more advisers, and other costs, but the proposed dividend was nevertheless increased by 15%.

The shares rose in early trading in London.

In its statement, the company said it wasn’t breaking out “separate geographical segmental information” because it doesn’t segment its business geographically, and because “most of [the group’s] customers are based in the UK, as is management of the assets”. Also, the Asia operation “is not yet material for separate consideration”, the company said.

The Henley Group, now known as St James’s Place Asia, was founded in 1990, and acquired in 2002 by Antony Michell, who sold it to St James’s Place a year after establishing a UK office in Bristol, England, in partnership with St James Place, in 2013.

At that time (2013) Michell estimated the firm had around “4,000-plus clients”, most of whom originally hailed from the UK.

St James’s Place’s interest in expanding into Asia comes as a number of major life insurance companies and at least one major Dubai-based advisory firm have also been aggressively going after the Asian wealth management market. As reported, these most recently have included Aviva, which earlier this week unveiled a 280-adviser-strong operation in Singapore that it says it plans operate alongside its existing Singapore advisory business, Professional Investment Advisory Services pte Ltd (PIAS).

Earlier this year Old Mutual Wealth acquired AAM Advisory, an expatriate-focused Singapore firm, while last year, the Dubai-based Nexus Group acquired Zurich’s Singapore tied agency insurance brokerage business, and has said it has plans to open other Asian outposts as well.

Manulife has also set up a Singapore advisory business within the past 16 months, which it has said will offer the products of other insurers as well, not just its own. It too has spoken of opening offices in other Asian cities.

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