Wealth management advisory St James's Place PLC (LSE:STJ) has been forced to slash its exit fees following regulatory pressure from consumer rules.
According to equity research analysts, the change in the wealth manager’s charges will mainly affect short-term earnings, which could “accelerate in the medium term”.
The wealth manager said in a statement on Tuesday that following an internal review, it will implement changes to its charging structures from the second half of 2025.
New investments in bonds and pensions will continue to incur an initial charge but will no longer be subject to early withdrawal charges.
Barclays’ equity analysts said in a research note on Wednesday that the company’s ongoing charges are expected to be 10 basis points (bps) lower from the second half of 2025.
“Management announced far-reaching changes to the group's charging structure, with lower initial charges on bonds and pensions, with overall ongoing charges 10bps lower from 2H25,” said the analysts.
“Earnings will be lower initially but accelerate in the medium term.”
St James’s Place said on Tuesday that cash will be reduced in the next few years, while it anticipates growth will accelerate in the medium term and beyond.
The wealth manager’s chief executive Andrew Croft said the pricing changes were brought in as a response to developments in the consumer duty, under which firms will have to decide whether products or services offer value to customers.
Barclays’ analysts rate St James’s Place’s stock as ‘overweight’ and said fair value in its share price would be reflected at double the current price per share of 6.69p (at closing yesterday), at around13p per share.