SJP turns £7.5m loss into £6m profit in 2010

The distribution unit of wealth manager St James's Place (SJP) turned a huge loss in 2009 into a significant profit last year after new business increased by a third.

The 32% growth in new business during 2010 increases the income the distribution company receives but has no impact on fixed costs, it says.

This resulted in a profit of £5.8m on an IFRS basis (before shareholder tax) compared with a loss for the prior year of £7.5m.

SJP says over the course of an 'economic cycle' it would expect to make a profit on distribution activity, but it adds the result will vary between years.

It says the profit would have been £1.3m higher had it not been for the proportion of the FSCS Keydata levy charged to this company.

Across the vertically-integrated company as a whole, total profit before shareholder tax, again on an IFRS basis, for the year was £84.2m, up 69% on the prior year result of £49.9m.

It says the key driver for this was higher income from funds under management, with the average FUM in 2010 at £24.2bn, some 30% higher than the previous year.

A negative in the result was a £6.2m increase in the fees paid to the FSA and FSCS. This increase was principally due to a £4.8m jump in the FSCS interim levy.

Meanwhile, the company says more than 700 partners and members of its management and support teams have achieved the required RDR diploma status, while a further 700 are "within one or two exams of doing likewise".

It adds, following further clarity from the FSA regarding the requirements of vertically-integrated firms in respect of the adviser charging rules, it is confident its current product charges and remuneration structures will be RDR compliant.