Former Prudential executive to replace Andrew Croft as UK wealth manager’s fees come under pressure
St James’s Place has appointed Mark FitzPatrick as chief executive officer to replace Andrew Croft, just as the UK’s largest wealth manager faces increasing scrutiny over its fees.
FitzPatrick, a former senior executive at UK insurer Prudential, will join SJP’s board in October and take over from Croft on December 1.
SJP said on Wednesday that it had conducted an “extensive and robust” selection process to find a successor to Croft, an SJP veteran who has been chief executive since 2018.
FitzPatrick will take the top job as the UK financial regulator’s new “consumer duty” regime toughens scrutiny of the fees that wealth managers charge clients. SJP produces most of its profits from annual charges.
“Mark has a well-established record in retail financial services and the board believes he will bring expertise and energy to the role,” Paul Manduca, SJP chair, said.
FitzPatrick, who was chief financial officer at Prudential between 2017 and 2022 and briefly served as its interim chief executive, was the leading contender to replace Croft.
The appointment is a “positive” for the company, given his roles at Prudential, said Nasib Ahmed, analyst at UBS.
“The new CEO can help improve the operating leverage of SJP by reducing costs [and] expenses further.”
Since it was founded in 1991 as J Rothschild Assurance, SJP has become a powerhouse with £158bn of funds under management and a network of almost 4,800 advisers offering wealth management and tax planning.
SJP announced in July that it would reduce some of its fees in response to the Financial Conduct Authority’s new regime, a move that hit the group’s share price and raised fears over its business model.
Analysts at UBS estimate that the cut by SJP will reduce the company’s profits by 8 per cent next year.
SJP charges 4.5 per cent upfront for initial advice, as well as 0.5 per cent annually. Investment and product charges are additional while its exit fees start at 1 per cent.
“By continuing to do the right thing for clients and adapting with agility to our fast-changing world, I am confident that St James’s Place will be in a strong position to create value for all stakeholders in the years to come,” FitzPatrick said.
The wealth manager has also been struggling with performance, with SJP’s figures showing 41 per cent of UK clients’ assets under management were in funds that delivered “insufficient value” last year.
Six of its funds, totalling £29bn, were included in Bestinvest’s “Spot the Dog” report that identifies the worst-performing funds over a three-year period.
Inflows into its funds dropped 38 per cent in the 12 months to the end of June from a year ago. Croft has said a tough economic environment “naturally” has an impact on clients’ capacity to invest.
Croft would stay at SJP into next year to help with the transition, the wealth manager said. SJP’s share price was little changed in early trading on Wednesday.
Source: Financial Times
