St. James Aktie

Good afternoon, and welcome to the St. James's Place Q&A call on the new framework for reporting financial performance. [Operator Instructions]

I'd now like to hand over to Caroline Waddington, Chief Financial Officer, for opening comments.

Thank you. Good afternoon, everyone, and thank you for joining the call. And I'm here today with Sophia Johnson from our Investor Relations team. Before I open the floor to questions, I want to spend a couple of minutes reiterating the key points about the new simplified framework for reporting financial performance that I'm very pleased to have announced today.

Importantly, nothing about our profitability changing. There is no change to our financial business model, anticipated profitability, financial ambitions or shareholder returns guidance. The new framework is purely a change in how we present our results with the aim of making them easier to understand and better aligned with our financial business model, charging structure and statutory IFRS reporting.

Our key profit metric is being renamed from the underlying cash result to adjusted IFRS profit after tax. This is the same number, just under a new label. As a result, we expect no material change to consensus profit expectations when you refresh your models to accommodate our new framework and associated guidance. Whilst the bottom line number isn't changing, the way we present financial performance to get to that bottom line is different.

From half year 2026 onwards, we will replace the current cash result with an adjusted IFRS profit and loss account, which will show income and expenses separately and before tax. We're also simplifying parts of our financial review to make it easier to follow. To make the best use of this call, for those on it, we'd like you to ask that questions focus on the principles of our new framework. Of course, we recognize that you'll need to make changes to your models to adapt them to our new framework, and you may have detailed modeling questions as a result, and the IR team will be happy to assist with these offline.

With that, it's over to the operator for the first question, please.

[Operator Instructions] Our first question today comes from Nasib Ahmed from UBS.

So firstly, on the 131 basis points margin, I probably call it the revenue margin. If I gross it up for gestation FUM, so let's say, 25% is gestation. I get 175 basis points. Why is that higher than the 167 basis points that you're charging under the new structure? So can you just kind of square the math there?

And then kind of secondly, just on below the line items below the IFRS profit after tax. I don't think there's any changes there, but can you just confirm that in terms of how we model that? And just related to that on the DAC.

Yes. On the first, I think if you gross up for gestation FUM, it's about 15 basis points, actually. So that's -- I think that's the amount. So that would be that. And then we've got some -- Yes. So I wouldn't get the 175 you said whatever the number you said basis points. So I would think it's less than that. Then we have some tiering and we have some investment cost differences.

So there are some different elements in that, but not the gestation FUM. Gestation is probably the major difference, but not all of it. So maybe that's something you can go through with IR. Maybe you can go through that with IR.

Yeah, we can take you through the calculations, for sure.

Yes. And on the other side, there was no difference, though.

No difference. So the reconciling items between adjusted IFRS and pure IFRS are exactly the same as they were between the cash result and IFRS.

And sorry, I was going to ask on DAC. And does that just run off over time?

The DIR does, the DAC, I think, is going to remain as an accounting concept, but the DIR was very much related to our gestation FUM and that 6-year holiday on fee charges. So yes.

Thank you for the question.

The next question is from Ben Bathurst from RBC.

Mine is on the IFRS expense note and that reconciliation from adjusted to IFRS expenses. I think it's Slide 20 of the pack. Completely appreciate that nothing has changed here. The rec is calling out some specific line items, but there's also an other line in that rec. Is it fair to assume that depreciation and amortization of PPE is sitting within that other line? And is that offset by some credit items? And I just wonder, are there any other items worth calling out sitting in that other line that you think should recur and we should be aware of?

Yes. I would say, actually, we don't have that much depreciation from our PPE. We don't have a lot on our balance sheet. We have our -- so I would say we don't have a huge amount of that. So that's not significant. The main things in other expenses are sort of complaints costs and our donations to the foundation and things like that. So there's nothing particularly major. It's just all odds and sods that don't really -- nothing particularly material that doesn't fit neatly into the other categories.

Okay. So depreciation and amortization is in there. It's just not material, would be the point?

I think it's actually within -- sorry, I mean, I've been asked so many questions. I'm getting my brain and this was not one of -- I think it's within People, Property and Technology costs. It should be within that. I think that's where we would find that.

Yes, it was always recognized in Controllable Expenses previously.

Yes, it will be -- it's within People, Property and Technology, but it's pretty small for us. So it's because we don't have a lot of technology capitalized, sort of, software on our balance sheet. We don't have a lot of intangibles. So sort of through software and things like that. So it's small, hence, my brain having to think about it.

Understood. That's very clear. It's above the line. That's very clear. Thank you very much for that.

Yes, it is.

The next question is from Greg Simpson from BNP Paribas.

Maybe a few random ones here. In terms of the 3 basis point movement you're talking about, clearly, that's going to be quite influenced by the gestation runoff, but you're not going to disclose that going forward. So I guess the question is, is the 3 basis points going to be quite a similar level each year, 3 basis points? Are you going to kind of guide each year? Will it be 2 basis points or 4 basis points? Just want to square that kind of how smooth that margin increase is?

Yes. I mean, I'll start with that. Obviously, I can't stop you asking multiple questions, but I will ask you to, then let you ask another question in a minute. So yes, on the 3 basis points, yes, I mean that is our way of -- obviously, now we're using total FUM, which helps to simplify everything. That means we don't need to -- you don't need to worry about the amount that's actually maturing. It is linear, but not totally linear. It does act in a sort of linear way, but not 100%.

So what we will do every year is the circa 3 basis points will stand every year. But what we will do is we'll give you the range of sort of where we think the average margin will be every year. So we'll reset the 47 to 49 basis points every year, and then it will be a circa 3 basis point rise every year after that. So that's what we will be doing in our guidance, if that makes sense.

Yes. Okay. Got it. And a few smaller ones, but just you're excluding share-based compensation from your adjusted figures, just to confirm that's the case and may we know the rationale? And the second one would just be -- just to confirm the Asia and Rowan Dartington revenues are all in your income from kind of top line line, right? And the cost -- Yes.

Yes, we've taken the opportunity just to simplify everything by putting -- so I'll start with the last one. Yes, we've taken the opportunity to simplify everything and put things with the -- in the type of income rather than splitting it out by Asia and DFM. So yes, it's all in the income from FUM and -- sorry, profit from FUM, profit from inflows and PFE. So that's where we split it out to. So yes, on that Asia and DFM.

On the second one, it's the share-based compensation, it's the equity-settled is actually excluded from the cash result. That's aligned. Number one, that's aligned -- sorry, the adjusted IFRS now but was the cash result. So it's aligned across both. We've done the same thing in both. And just the rationale for that is that we can do that via either, obviously, issuing shares or purchasing shares and only one of those reasons -- only one of those impacts cash. So we do adjust it out. Because obviously, there was that it's not necessarily a cash item. And then if we -- when we do, do that, we will do that as per our retained distribution. So out of the 30% we retain, it would be part of that if we do then purchase shares for that. So that's the rationale for it, and it is consistent with our previous treatment under the cash result.

The next question is from Charles Bendit of Rothschild & Co.

One question on investment return and net finance income, which I think is driving GBP 121 million out of the GBP 600 million of adjusted PBT. So I think the slide says it reflects the income accruing on shareholder investments and net interest paid on borrowings. Can I ask a couple of clarification questions. One would be, can you remind us what the investments are that are generating the GBP 86 million investment return?

The second is, if I think about the finance income, is that net interest margin that you're generating on the roughly GBP 9.6 billion in cash that's reported with your FUM? And where I'm coming from is I'm just trying to understand the net interest margin you're generating on client cash and the process you go through when thinking about idle cash that sits in SJP accounts versus being sent to Flagstone, which I think is excluded from FUM.

Yes, it is. So I'll try and take that. So let me -- so the investments that we talk about is where we have put our working capital shareholder funds in money market funds. So that's our investment return. So it is literally a money market fund, so nothing more exciting than that.

And on the second one, on the sort of finance income, this is predominantly interest on partner loans and cash -- any cash and cash equivalents that are ours. So we don't make any interest on client balances. In fact, what we generally do with client balances is we invest in money market funds for them. So we don't have -- which other people will have where we make money on cash of our clients. We don't have that situation. So all of that is our shareholder money or working capital money, effectively, either on money market funds, which comes in the investment returns or cash and then obviously, the interest we earn on partner finance comes into finance income.

Yes. So nothing at all to do with the GBP 9 billion within our FUM.

Okay. So can I just follow up on that? On the client money notice section of your website, it says that the cash that's placed by clients gets placed in money market funds or bank accounts with treasury partners and that there was a rate change effective 1st of January where a rate on cash was being reduced from 1.7% to 1.6%, which I think would be different from the return that a money market fund generates. Do you know what this is referring to? Just it seems like there's a net interest margin there somewhere, but maybe I'm misinterpreting it.

We'll get back to you on that one, actually. We'll get back to you on that. Off the top of my head, no. So -- but yes, we'll get back to you.

The next question is from Andrew Crean from Autonomous.

I just wanted to ask, as we go down through the different lines, mainly expense lines, can you talk us through areas where you think there is seasonality between first half and second half that we ought to think about?

So there's not -- where would there be seasonality? We don't have a huge amount of seasonality. I think the main -- probably our main one is within the FSCS and some of our regulatory fees where those payments come out in the first half of the year. So we do tend to get some more of that. But I don't think, we don't tend to -- certainly in our expenses have as much of that sensitivity. I don't know, Sophia, if you've...

So last year was a little bit of a quirk where we had additional higher expenses in the first half of the year compared to the second half. It was only very marginal. So it was something like 50.5% in the first half and 49.5% in the second half. Typically, we have a slightly higher H2 weighting, but by a similar amount just over 50%. Apart from FSCS, everything else is pretty even in general.

Well, I just want to take you up on that. Performance-related costs was GBP 26 million in the first half, GBP 39 million in the second. Other expenses, GBP 28 million going down to GBP 18 million. People, Property costs, GBP 256 million, GBP 269 million. I can see that, that's sort of just general progression. There do seem to be -- and I'm just saying on the income side, is there anything on the income from inflows or from FUM, which seasonally might be different? I'm just trying to think about when doing the first half '26 forecast.

So on the income side, you'd expect us to move up within the 47 to 49 bps profit from FUM range over the course of the year as gestation FUM unwinds across the year. So yes, you'd expect the profit from FUM margin to be higher in the second half than it is in the first half, but that is driven by the income side rather than the expense side in general. Of course, there will be some fluctuations. So how we accrue for our profits, accrue for our bonuses in the performance-related line may vary as our assessment of business performance changes over time. But in general, a pretty even split on expenses is where we would suggest you are.

[Operator Instructions] The next question is from David McCann from Deutsche Bank.

Two for me, please. Caroline, on the prerecorded remarks this morning, you were walking -- that you're disclosing.

Sorry, David, we just -- we lost you for a second there. Can you just start your question again, please?

Yes, of course, yes. Sorry about that. So on Caroline's recorded remarks this morning, she mentioned that there was obviously a gap between the 167 bps for investment bonds and pensions and the 159 bps for unit trusts and ISAs per the disclosures comparing the 131 bps that you're disclosing within the data today. Obviously, much of that is going to be the gestation difference. If I do 3x6 -- 3 basis points times 6, that's obviously about 18 bps. It doesn't explain all of it. I think it was also mentioned that the actual fund selection will have a bearing on that.

So can you just do a waterfall for us, if you like, between what's roughly 160 basis points down to the 131 basis points. So how much of that gap is gestation, how much is other stuff? And if you could sort of break that out by category, that would be great.

And then the second question sort of relates to the same thing. Of the 3 bps guidance of increase in the effective revenue margin, are you assuming any underlying fee compression within that? Or is the 3 bps solely due to the gestation unwind?

So on the first one, Sophia, with the waterfall.

Yes. So getting it up from the headline rates of 167 bps for bonds and pensions and 159 bps for ISAs and unit trusts down to the 131 bps we've actually reported. As you say, the most significant thing is gestation FUM. The next largest thing is the variation in investment charges. Those headline illustrative rates just give an example for one particular fund, but we have quite a lot of variation across our investment portfolio. And so depending on where clients have chosen to invest, the charges are quite significantly different. We also have things like tiering going on in there, which brings down the margin. So we'd expect over time as more of our gestation FUM matures that, that margin will trend upwards.

Can you put some rough numbers on those things?

Yes. So in the same way that our profit from FUM margin, we suggest it will increase around 3 bps a year, but we'll give you formal forward guidance for 1 year in advance. That 3 bps would also apply to the income from FUM line because gestation FUM comes through free of any additional expenses in the way it always has. So a 3 bps increase due to gestation is what we'd expect out to 2031 annually.

So on the fee compression, I think the way we look on this is obviously the same way we've always. We think advice is something that with the scarce resource in the industry is something that will be one of the latter things to see any compression, if any, because of the sort of obviously lack of advisers in the market. I think on the investment margin, we always -- that's something we're looking at, and we're permanently sort of reviewing that and seeing what to pass through to clients.

And on the product, we obviously look at that as we get economies of scale, that may well be something that we will look at as time goes on and we get those economies of scale and what we do with them, and that's where we probably see it happening. Within our margin, we obviously have some sort of degree of conservatism in for that. But yes. I mean, I think that's how we sort of see it going as we -- as time goes on.

Our old 43 bps to 45 bps...

Yes, does the 3 basis points, is that exclusively the gestation unwind effect? Or is there anything else in that number?

That is the gestation unwind effect.

But as we had in our 43 bps to 45 bps margin range, that did assume as you move out to 2031 that we could give up a bp or 2 bps on product charges. And so to get down to the same level of profitability because the cash result is actually the same as adjusted IFRS profit after tax, we've got that same level of prudence in our profit from FUM guidance range, too.

We have a follow-up question from Nasib Ahmed from UBS.

I was just picking up on what Sophia said on the 3 basis points. Your profit from FUM growing at 3 basis points, expenses aren't growing. So it seems like the income from FUM is going to grow at less than 3 basis points, right, because you're getting operating leverage, right?

No, we think that there will be 3 basis points on income from FUM and on profits from FUM.

[Operator Instructions]

That concludes our questions for today. So now I'd like to hand back to Caroline to close the session.

Thank you. Thank you, everyone, for attending and listening and asking your questions today. So I want to leave you with my key takeaways. First, our new framework provides a simpler, clearer way of presenting the financial performance of our business. Second, there's no change to profitability, just a better way of showing the key drivers behind it. Third, we'll be implementing the new framework for our half year 2026 results, which we'll announce on the 29th of July.

So thank you all for your questions, and please do get in touch with our IR team for any further queries. Thank you.

This concludes today's call. Thank you for joining. You may now disconnect your lines.

Hello, and welcome, everyone, to the St. James's Place 2025 Full Year Results Q&A session. [Operator Instructions]

I will now hand over to Mark Fitzpatrick, Chief Executive Officer, to begin.

Thank you, and good morning, everyone, and thank you for joining us. Unfortunately, Caroline is unable to be with us this morning due to a family bereavement. Instead, I'm joined by Charles Woodd, our Finance Director.

Before we open for questions, I'd like to briefly reflect on a year of strong delivery and execution for St. James's Place. We delivered growth in new business, growth in funds under management and growth in underlying cash result, while at the same time, delivering strong returns for our clients. Drawing out some of the results, which are new today, the underlying cash result of GBP 462 million, up 3% year-on-year and 4% ahead of consensus. Underlying cash basic EPS of 87p per share, up 6% year-on-year. We're returning 50% of the underlying cash result to shareholders through ordinary dividends and buybacks and a total of GBP 313 million to be returned to shareholders for 2025.

Alongside delivering a strong operational and financial performance, we made good strategic progress. Our simple comparable charging structure implementation went live smoothly in late summer. The new structure puts our investment performance on a fully comparable footing with the wider market and enabled the successful launch of Polaris Multi-Index.

This has broadened client choice and grew to over GBP 1 billion of FUM at year-end, just 2 months after launch. Our review of historic ongoing service evidence continues to progress. Based on our experience in the second half of the year, we have released a further GBP 25 million from the provision today, taking total releases to GBP 109.5 million for the year. We are now deep into the operational delivery phase and are on track to complete the program in 2026.

Our cost and efficiency program also made good progress. For example, we completed the transition to our new organizational design during the year, and we remain on track to remove around GBP 100 million per annum from our addressable cost base by 2027. These achievements give us the confidence in the strength of our business and our prospects, which has enabled the Board to update our shareholder returns guidance going forward a year earlier than originally anticipated.

So from 2026, we intend to increase our payout ratio to 70% of the underlying cash result. We anticipate that this will comprise ordinary dividends, which will make up at least 40% of the total shareholder returns and the buybacks will make up the difference.

A different way of thinking about is that dividend is expected to be at least 28% of the underlying cash result and buybacks the remaining 42%. That's how you get to 70%. Our priorities for 2026 are completing our remaining transformation programs, expanding the range of technology tools, including those which are AI-enabled and making those available to our advisers with the goal of helping them to work as efficiently as possible.

This will give them more time to do what they do best, which is building trust, deepening client relationships and delivering personalized, high-quality advice. We see technology deepening the human relationships between clients and advisers, not replacing them, accelerating elements of Amplify, where we have the capacity to do so later in the year, and we will focus on refreshing our cash proposition and enhancing our high net worth proposition.

We look to the future with confidence. We have already made changes to the business, and we're focused on strengthening and growing SJP over the long term. This means we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in 2026 and beyond.

With that, I'm very happy to turn to questions.

[Operator Instructions] Our first question comes from Andrew Lowe from Citi.

I wanted to ask on AI and how you see the potential threats from your business. So I'd love to hear a little bit more about what makes you comfortable about the potential threat to growth and pricing power from competitors, including D2C platforms who in time might be able to offer AI-led financial advice. As sort of corollary to that, it would be really helpful to hear a bit more color on the AI tools that are operational today, what we might expect in the next 12 months? And how much this could improve your adviser productivity going forward?

And the second question was just on the adviser numbers, which fell by 0.4% in the second half of 2025. Could you please give a little bit more color on the productivity of your departing managers? And just any comments on the outlook for adviser numbers going forward would be really helpful.

Andy, thank you for those questions. In terms of technology and AI, I think the way that we see technology is really it's an opportunity to strengthen our face-to-face advice led model. So what we've observed over time, I think, is that while a lot has changed in and around the competitive landscape, what has been central, actually, is the [ primacy ] of the adviser client relationship and the longevity of that relationship because research tht we have done and that we talk about in the accounts and research that others have done effectively emphasize that actually people still value human engagement in making financial decisions. They seek personal advice, whether it's around retirement, tax planning and various other things, et cetera.

And I think when we also think about AI, I think it's also important to bear in mind that advice in the U.K. is a highly regulated and a high trust service area. And therefore, it requires the personalization, the suitability and the accountability and human judgment is absolutely core to that where we see AI can play a very, very positive role is in enhancing adviser productivity and client experience.

You'll have seen in the presentation earlier on this morning that we're really using some AI tools to give advisers back time. And I think that's where the deep vein is going to be for the next few years for our advisers, for us and for the whole profession. I think the more we can give time back to advisers to really focus with their clients is going to be absolutely key.

I think by virtue of our size and scale at St. James's Place, we've got the opportunity and the connectivity, and we are talking with some of the very biggest players on their thoughts and on what we are doing and how we can simplify and how we can make what we do even better and even more efficient.

And bear in mind as well that of our 5,000 advisers, the vast majority of these folks are phenomenal entrepreneurs, not just in being great advisers, but also in terms of finding solutions in their own businesses and how they make themselves more efficient. So within our 5,000 advisers, we have some of our businesses where they have actually created and built their own technology to improve some of their efficiency on how they do things.

And through our oversight and through our listing of data protection and everything around that and security, we're making those and facilitating those to be available to far more partners within St. James's Place. So the great thing is the innovation isn't just happening at the corporate level. It's also happening within the adviser community, where they're eating, sleeping, drinking this 24/7. So some really, really good ideas coming from them.

What we're doing is making sure we can protect the data, protect the integration and really make sure it plugs and plays properly with the rest our kit. So at the end of the day, I think AI will enable greater productivity. It will enable advisers to get back to what they really enjoy doing. And it's not the admin they enjoy doing. It's actually being in front of clients. It's finding new clients to serving clients. It's being there for clients when they truly matter.

Sorry, I'm repeating on, but I'm conscious that this is a big topic. And therefore, I'm probably going a little bit fuller in the answer just to kind of give everybody a little bit of color. In terms of some of the features that we have today, et cetera, along the way, we have a number of tools that we're using, whether it's advice assistant, which kind of harnesses the data in the sales force and can produce suggestions on planned wrappers, investment amount fund selections and various other things, a rules-based engine based on our Advice framework, which has been trained on thousands of recommendations made previously by SJP clients.

And we've seen a very strong take-up from advisers around that. whether it's preparing meetings or whether it's summarizing and listening into meetings with clients, summarizing, converting the meetings into notes that get sent to the client, notes that get sent to the admin actions to be done.

Those are things that we have trialed extensively, and we're now in the final stages of looking to roll those out across the partnership as a whole during the course of this year. And then we have something particularly innovatively called ChatSJP, which covers a whole lot of the documents in our Advice framework and business submission guides and the like. And what that does is enables the power planners and the admin teams, et cetera, just to check in on some of the advice that might be given and some of their thinking and some of the plans just to make sure everything is aligned.

And what that does is that saves huge amount of time for every query that otherwise might be done through a call center and enables the call center operators to really focus on considerably more complex matters. So we're trying to -- we're not trying. We are introducing technology throughout the organization because I do see that the technology providing us with different hands in terms of what we do, but it's not going to change the face of Advice.

And then, Andy, your final question on adviser numbers, yes, adviser numbers declined modestly in the second half of this year. I said back in February last year that we'd be embarking upon an initiative. And what you saw in the second half of last year was the outworkings of some of that activity. I think it's fair to say that the advisers that have left us as a result of that, their productivity was significantly below average productivity on both gross flows and from a FUM perspective, which is why you haven't seen any real shift in productivity.

If anything, productivity, and I can get to that later on, but productivity has been significantly stronger during the course of this year. But Andy, thank you for those questions. Sorry, I'll try and be brief for the next few questions.

Our next question comes from Andrew Crean from Autonomous.

Just a couple of 3 questions. Firstly, can you say anything about trading so far in Q1 '26? Secondly, your liquidity -- free liquidity targets. I just wanted to explore this a bit more. Do you have any targets for group liquidity? And the reason I ask is because if I looked at your doubling of profits in 2030, one is talking about somewhere retaining, if you pay out 70%, you're talking about retaining somewhere between GBP 240 million and GBP 270 million of profit, which is in line with the amount of group liquidity you currently have.

I suppose that poses the question whether up the line, once the earnings really get going, whether the 70% is too low and you will just build excess liquidity over time? And then a third question is client growth. I think plant growth was about 3% this year or last year. Could you give us a sense as to what you anticipate client growth to be like over the next few years?

Okay. Thanks for those questions. So trading -- first off on trading, we put out our Q4 trading update less than a month ago, and I think the team provided a little bit of color about the fact that flows were normalizing. We were seeing flows normalize over that period. So I'm not minded to give necessarily a month-by-month running update. But what I would say is we've seen that continue.

And the partnership is in exceptionally good health. They're all working incredibly hard at the moment. This is a very, very busy time and with tax year-end 5 weeks away. So there's a huge amount of activity on the go, which is very encouraging. From a liquidity perspective, so some new disclosure for everyone in the world of liquidity and how we think about liquidity.

I think it is important for us to be able to make sure we have an appropriate degree of liquidity at the center to support the capital allocation framework. The liquidity levels that we have, we will be considering them on a regular basis, and we will be making our determinations as regards what we do with that liquidity based on facts and circumstances at the time. And if we see an inappropriate buildup, then we will -- it will get activated through the capital allocation framework along the way. The 70% payout ratio that we've effectively indicated for the time being, bring it forward a year, I think, is dripping with signaling of confidence in the business and how well the business is performing and the great progress that we have made.

So we're very pleased to announce that a year really. We're very pleased to have increased the level of the payout. We think the composition, the 2 sectors of it in terms of dividend and buyback are important and are weighted appropriately. And if -- and as and when that number builds in the fullness of time, as I said, facts and circumstances will dictate. We would expect -- you should expect to see the [ GBP 271 billion ] number grow as the business grows. We are a growing business and [ GBP 271 billion ] for a business with 220 billion and 1 million clients under management feels appropriate for this size and the scale.

In terms of client growth, really interesting one, Andrew, because client growth is going to become a little more complex as during the course of '27 and onwards, we have a stronger push towards high net worth because with high net worth, it's going to be less about pure client numbers, and it's going to be a real focus on getting clients with larger funds under management and our advisers doing more with them and therefore, needing to spend a bit more time with them.

So that's something that we're thinking about internally. But what I can say is the vast majority of our advisers when we did a survey with them at the back end of last year indicated they are expecting client numbers to grow. And as is often the case and has been the case with us for some time, the vast majority of our new clients are word-of-mouth referrals, which I think contributes to a very, very high client retention level and very, very sticky relationships, which is a great business to be in. But thank you for those questions.

Our next question comes from Nasib Ahmed from UBS.

Three questions from me. Just firstly, following up on AI. You had the charging structure change last year. You had an opportunity to update your tech stack. I know there's different tech solutions that you're using across the piece. But I guess the question is, is your tech stack nimble enough to add on these AI LLM type models? Because, of course, you've got the scale, but with bigger companies, sometimes you've got legacy tech that can't really cope with this. So question number one, are you kind of happy with the way your tech stack can adapt to these new models?

Secondly, on complaints, I saw kind of new open complaints first half '25 were still high relative to history, they're kind of stabilizing but to a high level. When do you expect them to come down? And is that putting pressure on kind of your complaints team at the moment? I know you recruited quite a lot of people recently. And then finally, on kind of regulation, D2C simplified advice. What are your thoughts around here, targeted support as well within that? And would you kind of look to acquire a business and move into D2C as a result of that?

Nasib, thank you for those questions. AI, the simple comparable charging out of [indiscernible] have tried to weave in all sorts of other changes to what undoubtedly was the largest tech change program that we've had in the history of St. James's Place. So on the tech stack, bear in mind that we have a tech stack that includes Salesforce, that includes Snowflake, that includes some really, really modern tech that gets updated on a regular basis.

So it's through that, that we're able to kind of plug and play and interact and indeed with one of our adviser firms who's been working on some great kit and has got some great AI kit that helps facilitate and improve efficiency. We very recently plugged that in and got that working well with Salesforce. So having done that, we'll be able to roll that out to other elements. And that's given us the confidence that we can plug and play modern kit into our stack. So not particularly worried about that component.

On complaints, BAU complaints, so business as usual complaint levels are down. What we're seeing is there's still some activity in terms of the historic evidence review, et cetera, from some claims management companies, but much, much lower levels, inordinately lower levels. And dare I say we are doing more checks and balances in terms of whether the complaints that come in are legitimate complaints. We have some complaints that come in when we write out to the client, they say, yes, I spoke to them, but I didn't want to complain. So it's not a legit complaint, and others kind of aren't even our clients.

So we've had a -- we've got a lot of noise in the system. But on the substance, we're comfortable that BAU level complaints are coming down and are coming down to a more normalized level. On rates, the government, I think, is -- and both the government and the regulator are comfortable that there's a lot coming down the road in terms of the Mansion House reforms and really want to see how well these land.

So my discussions with treasury and with the FCA is they are very focused on ensuring a successful launch of targeted support. In terms of disclosure regimes, they're trying to make things simpler, et cetera. The retail investment campaign, they're really focused on trying to get more people investing. So it seems a lot more joined up than it might have been in the past.

Targeted support isn't really going to be for us by virtue of the nature of how that's going to work. I think targeted support is going to be very difficult if a human has to get involved because a human can't unhear what they've heard and a human is likely to pick up something that might throw it out of the decision tree that is effectively so key to targeted support.

Simplified advice. We are expecting some consultation papers from the regulator on simplified advice later on this year. We have been in contact with them. That is likely to be a lot more relevant to us. A key component of that is ensuring that if and when simplified advice comes out, it's done in a way that is economically viable for an adviser to be able to engage with somebody without doing a full fact find.

So there's still quite a lot of issues that need to be worked through. But the encouraging thing is that the regulator has demonstrated and government has demonstrated a willingness to engage with industry and listen and with trade bodies and take views on. So I'm cautiously optimistic that if this comes through, it should come through in a good guys, but there's lots to do around that particular patch.

As against D2C, if you think of what our underlying purpose is, which effectively is to provide invaluable advice. Therefore, I don't think kind of a pure D2C play is something that's on the strategy. When you think that only 9% of the adults in the U.K. take advice today, the market opportunity is so big for all of us in the U.K. I truly believe it is one of the really few growth areas in financial services in the U.K., the element of wealth getting people to invest.

So if government, the regulator, we, all the players in the sector, D2C or otherwise, are getting people to invest rather than save, that's going to be fantastic because there are 3 big gaps in the U.K. economy. There's an advice gap, there's effectively investing gap and there's a retirement gap. And we've got too much saved, underinvested. We have too few people taking advice. And we all know we're in a DC world rather than the DB world.

And I don't think society has truly understood the risk that they are taking on themselves and their need to prepare for their retirement in a more fulsome fashion than they're doing today. So I think there's lots of opportunity for us all to actually grow very, very successful businesses. And I think we're going to stick to our knitting in terms of the advice piece.

Our next question comes from Ben Bathurst from RBC Capital Markets.

I've got questions in 3 areas, if I may, as well. Firstly, Mark, in your prerecorded remarks, you mentioned you'll be looking to improve reporting of financial performance. I think you said before half year 2026 or half year 2026. I just wondered if you could give more details on the scope of that project and if it's going to extend to making changes to the underlying cash disclosure.

Then secondly, on flows, you saw fit to comment that outflows have normalized at the end of Q4 and into Q1. Just to clarify, does that mean a return to the levels of outflows as a percentage of AUM that you saw in the first 3 quarters of FY '25? And then sort of related to that, but just on the pensions flows outlook, we're obviously edging towards the 2027 date for pensions to fall into the net for inheritance tax. I wondered if you started to see any differences in the typical advice that you're delivering to older clients around keeping funds in the pension wrapper. And we should really expect withdrawal rates from pensions to tick up over the next year or 2 in light of those changes?

Ben, thank you. Three really interesting questions. For the first question, I'm going to hand over to my partner in crime, Charles Woodd. Charles?

Ben, very good to chat about this. Yes, this has been an exciting project that we've been doing over the course of the last year. You'll have seen some of the output emerging. So we streamlined our financial review at the half year. We've done that again at the end of the year, and we've introduced new capital and liquidity metrics, a new section on that. And hopefully, that answered a number of the questions that were rising.

The implementation of the simple comparable charges, which happened in late summer, that was another important building block. And so building on that, we've been sorting out what the reporting should look like. And we are expecting to share that with you, certainly for the half year and expect to share that with you all probably later in Q2, possibly May might be the right sort of time for doing that.

Charles, thank you. Ben, in terms of flows, I don't think I've necessarily changed your models based on what we saw in Q3, Q4. I think I'd look at more the long-term element in terms of flows. And in terms of pensions, I think from memory, about -- historically about 4% of individuals just across the market paid inheritance tax. And I think the ONS in light of the changes the government brought about thought that, that might go up by 1.5%, maybe 2%. So call it 6%. So it's not for everyone, thankfully. But what we are seeing, I think, is that investment bonds becoming a lot more attractive now. Pensions still being an incredibly valuable vehicle for people to invest in up to a certain level and -- while they're working.

And what we're seeing is people now starting to utilize their pensions rather than considering them as a pure investment vehicle that they might have had as a generational wealth transfer vehicle. So the advice is shifting. It's a very, very complex area. I know our team are deeply engaged with government and the regulators working through how those changes need to come through and making sure the changes don't cross over with one another.

But we do expect actually pensions to continue to be important. But for those older clients, we expect to see them drawing down on pensions probably in a slightly stronger way than they might have originally. But then I would expect them to be leaving some of the other investments alone, and we might start to see some of those withdrawal rates start to improve along the way.

So it's going to be fluid. We need to see how it pans out. My big request of government of late is when the next budget comes up, please make sure that you are proactive in saying, we're not looking to change pensions again because we cannot have a third year of further speculation. So get out of the blocks and just try and close that down early as possible, please.

Our next question comes from Enrico Bolzoni from JPMorgan.

So sorry to go back again to the AI topic, but I have one follow-up question, if I may. So I think there is no pushback on the argument that AI can dramatically improve adviser productivity and do wonders internally in terms of reducing costs, so on and so forth. I guess my concern, which I suspect is shared by a portion of the market is more what the impact is going to be on perhaps the future cohort of clients. So maybe those that in theory would pick up advice in 10 years from now, let's make an example. In the U.K., the majority of people pick up financial advice when they are approaching their retirement age. So I suspect people that are in their 50s.

So the concern I have is if these people that now are using B2C platforms, which is an area where, by the way, you don't want to go, will be gradually see the benefit of AI in their existing B2C usage. Is there not a risk that these clients when they reach the age where in theory, they should pick up and historically, they would have picked up financial adviser when they're in the late 50s, might decide not to do it because by the time that's going to happen, it's going to be in 10 years' time, they will just have like an amazing AI proposition within their B2C platform.

So are you concerned by that? And would you consider be a bit more explicit in guiding your adviser to recruit or to use that additional capacity freed by AI to recruit younger clients or get them when they are very young to avoid this risk of not getting them at all? So that's my first question.

And the second question is on the Polaris Index range. I was wondering if you can give us maybe an update, some color in terms of what the appetite has been if you're seeing clients perhaps switching out of their active proposition and into passive or if mainly this is appealing to clients that put fresh money into the passive range and they don't really switch from their existing investments into passive.

Enrico, good to chat to you again. Really interesting point in terms of your scenario in terms of AI. Just a couple of useful facts just to share with you. By -- I think by virtue of the fact that our average advisers considerably younger than the average adviser in the market. Actually, what we're finding is the average age of our new clients is actually coming down. So over 1/3 of our new clients are under 40 years old, which is fantastic.

So we are effectively -- the advisers are effectively ahead of this issue and building in a fantastic pipeline of future relationships by engaging with clients at a younger age because it's not just about the -- what do I do when I retire and how do I prepare for decumulation. It's getting them to do the right things and getting the right behaviors in places my 17-year-old son said that, SJP, it sounds like you guys are financial PTs, financial physical trainers. You get people to do what they should do when left on devices, they may not do it.

So I think the element of -- we're getting more and more younger clients, our advisers younger, which is helpful and also very helpful in terms of their comfort around using new tech as well. And I think we see that quite a few of our clients actually have business with D2C as well as having business with us. So share of wallet has grown a little bit over the course of the last year. On average, I think we're about 50%, 55% or thereabouts. But it's -- so it's not 100%. People have money in D2C, but they understand what they get from St. James's Place, what they get from the adviser, et cetera.

And in time, what we see is actually more and more of that money coming in. The longer somebody is with St. James's Place, the more money tends to come in to St. James's Place and the share of wallet tends to grow rather than stagnate because they just see the value of what's there. And to some extent, I talked to a little bit of Polaris and Polaris Multi-index. Effectively what it is, is providing clients with a broader range of options where there is something that is a little bit different from the conventional Polaris.

What we're seeing to date is we're seeing new clients, new money coming into that. We are also seeing a little bit of switching from the existing funds into Polaris Multi-index. And I think the reason a number of folks like that is they like the ongoing asset allocation, the ongoing rebalancing that happens along the way at an incredibly attractive price point for the client.

So it's early days in Polaris Multi-index. It's very similar to what we saw on the main Polaris when that launched, we saw a lot of switching initially, and then we saw a lot of new money coming in as actually the investment performance kicked in and people just had more and more confidence about it. I am delighted at what the guys have done. I think it's fantastic to -- in the first 2 months, have gathered effectively GBP 1 billion worth of assets into Polaris Multi-index and really looking forward to seeing the growth of that because we can now offer clients a broader range of product across the way. But thank you for those great questions, Enrico.

Our next question comes from Gregory Simpson from BNP Paribas.

Two questions on my side. Firstly, wondering if you could share any comments on how you're seeing advisers and clients behave with the new fee structure and if you're seeing any differences versus the old model in terms of inflow, gross inflows and productivity, just aware that Q4 is a bit unusual with the budget in terms of reading anything into the flows. That's the first question.

Secondly, can you provide a bit more of an update on the high net worth push? What's the kind of time line? Would you have advisers that are more directly employed by SJP in this model? And what do you need to add on the product and investment proposition side?

Greg, thanks for those questions. In terms of the new fee structure, I think speaking to clients, they are candidly wondering what all the big fuss was about. From their side, they're seeing it very much in line with everything else that's out there in the marketplace. So they think it's -- from a client side, they think it's a lot simpler.

The advisers, as I mentioned, I think, earlier on, are incredibly busy engaging with clients. So they are absolutely connecting very, very busy. Case count is very strong at the moment. So it's all looking that the fee structure is -- the old fee structure is in the history books. We're now kind of level-pegging with everyone else.

In terms of the high net worth push, the high net worth push, I think, is one where I'm really, really excited and really interested for us to spend more time, more energy in. The element of the high net worth aspect is that we -- later on this year, we are looking to make even more impact on it. We've recruited some new talent. We're looking to streamline and improve the service that is available for both our advisers and clients in this area. We have, I think now as at year-end, 10% of our FUM is effectively in the high net worth segment, so a slight increase on last year. It is -- the team are working very closely with some of our advisers who specialize in the high net worth area.

We've had some off-sites exploring what do we need to do about product range, what do we need to do about service, what do we need to do about our brand. So we're clear on what we need to do. We're now just getting things done. We're recruiting, as I said, additional people, and we're equipping the people in that regard. And I'm quite excited about what we might do around this space. I think there are a lot of our advisers who are very interested in being more engaged in this space. A lot of them are very engaged in the space.

I think if we can provide them with greater support, they'll be able to do even more in and around this space. And they're all looking to grow their businesses. So I think that's probably the route in rather than us trying to kind of think we're going to have our own employed advisers focusing on the high net worth space.

So I'm excited about it. In reality, I think it will be the second half of this year that we really start to lean into it even further. It is part of the amplify phase of the strategy, but wherever I have capacity, I'm looking to try and apply it to the high net worth opportunity because I think it is so real. So you've picked on a real topic.

Our next question comes from Larissa Van Deventer from Barclays.

Three questions from my side as well. The first one, Vanguard announced yesterday that they are launching a new model portfolio solutions product in conjunction with Wellington. How do you see St. James's Place product range as differentiated relative to the other model portfolio solutions available in the market and perhaps specifically referencing the Polaris Multi-Index that you mentioned in your presentation?

Second question, on the historic ongoing service evidence review, you mentioned that you will complete that in 2026. Does that mean that we can completely put it to bed in '27? Or is there a set of limitations that needs to run before you will be able to finalize how much of the provision is needed? And then the last one, AI, a very topical sort of questions this morning. But with Polaris Multi-index being a lower cost offering and with AI potentially lowering costs, do you see future growth coming from maintaining margins? Or do you believe that margins may be compressed? And would you be looking to grow mainly from increased customer volumes?

Okay. All right. NPS products that are out there. There are a number of NPS products that are out there. So Polaris and Polaris Multi-Index are fund of funds, so not really the same as a model portfolio service. So rebalancing in an NPS will effectively crystallize capital gains tax, and that wouldn't happen in a fund of funds, hence, less frequent rebalancing in the NPS as against the rebalancing that we can do in the Polaris and Polaris Multi-index range.

So we're more dynamic. And therefore, we believe in a world that is changing as rapidly as it is, we think that is an advantage for Polaris and PMI. It looks like the latest NPS is out there has kind of got a mixture of kind of active and passive, et cetera, along the way. And effectively, at the moment, Polaris is kind of -- we have Polaris where there is some kind of systematic activities in normal Polaris and Polaris Multi-index works through 14 index funds. So as a blend is probably at a more attractive price point.

Ultimately, I think in terms of product innovation, what our team have been able to demonstrate is a great ability to innovate, come up with solutions that work well for clients. So there's a real client adviser demand and pull. It's been great to hear some advisers saying, Mark, my clients have been at me for ages to have something like Polaris Multi-index. It's great that we have it now, and it's great that I can talk to them about it.

In terms of the ongoing service evidence review, you'd recall one of the reasons we put a limit on our time period of going back to 2018 was effectively linked to statute limitations. And that has stood up from challenge from all sorts. So I think at the end of 2026, we should be done now. There may be somebody who wants to take it to false and complain about XYZ, et cetera, and that might draw the process out. But for all intents and purposes, I expect us to be done. The team know my ambitions to have it done this year. And I'm certainly not on this call going to let them off the hook on that front.

In terms of AI and in terms of future growth and margins and the like, candidly, when I look at margins, I think there are 3 elements to our margin. There's a margin for advice, there's a margin for the platform and there's a margin for the fund manager piece. The fund manager piece is all as you know on the phone, [indiscernible] the pressure that's under.

In terms of platforms, we see the fixed -- the cost base from that tends to be a little bit more fixed. And therefore, as we grow in size and scale, and I think we've mentioned this before, we would expect to give back some of that increased profitability and share that with clients at a later stage.

In terms of the advice, advice is really interesting because there are so few advisers in the U.K. The regulation is very high in the U.K. vis-a-vis advice. And therefore, we don't see there being a huge amount of downward pressure on that component. So I think our growth is going to come through growth in terms of both clients and in terms of funds under management because as I mentioned earlier, as we do more in the high net worth space, that might give rise to slightly fewer new clients but larger FUM with that more sophisticated, more challenging needs and therefore, a bigger role for the adviser to play rather than speaking to a client maybe once a year, it's speaking to the client maybe once a quarter or more regularly than that.

So I think I'm looking, especially in this market where there's 9% of U.K. adults take advice. We have so few advisers in the U.K. An interesting stat I saw is that SJP contributes 52% of all new advisers in the marketplace through the academy. So it's really, really important that we have a thriving advice profession. And we need to make sure like other professionals, they are appropriately paid and rewarded for the fantastic work they do.

Our next question comes from Fahad Changazi from Kepler Cheuvreux.

Only got just 2 left. Could you give an update on your target of doubling the 2023 underlying cash results by 2030? I know it's only 2 years in, but in terms of underlying assumptions on costs, AUM, et cetera, where you are standing now versus the target? And finally, just a follow-up on AI. We have controllable costs increasing by 5% in 2026. Could you remind us again what these are and if AI will help this underlying growth rate in the long term?

Fahad, very interesting question. So firstly, on the ambitions that we set out as part of our strategy, we remain very comfortable with the doubling of the underlying cash between 2023 and 2030. I'm not minded to rebroker that this early on because while we have had a much stronger start than I think we all thought and we all expected, I am conscious that markets are not linear, and there's quite a way to go between 2030, et cetera, along the way.

From controllable costs, the controllable costs, by and large, cover people, cover property, cover tech. And in time, I would expect as we get smarter in terms of how we use some of our tech that, that may give an impact or provide an impact in terms of what happens with our controllable expenses. The key thing to remember is that our main admin provider, SS&C, that cost base is not in controllable.

So a lot of the AI functionality will sit in there or sit in the advisers business. There will be some that will sit in us. But at the moment, our focus is in terms of trying to make our advisers as productive and supported them as possible, one; two, make client interactions and adviser interactions with the corporate and the admin as smooth and as simple and as standardized as possible. And then three, we'll be working out right, how do we use AI within the corporate, et cetera, along that way. But I'm being very deliberate in that sequencing because I think the biggest bang for buck is making the advisers' lives as easy as possible so they can spend more time with their clients.

Second is looking after the client interaction and all the admin processing, making that standard as simple as possible. And then third will be the element of how we actually simplify what we do internally here at the corporate and the role that AI can play. I know that folks internally do use AI and AI is part and parcel of kind of what a lot of us use. But at the moment, I think we are all experimenting with it, getting more comfortable with it as against it being necessarily a major drag or reduction in our controllable costs at this stage. Thank you.

Our next question comes from David McCann from Deutsche Bank.

So,,yes, 3 for me, please. So first one on the capital distributions and the new policy there. Can you just give us some color as to what the thinking was with the bias towards the buyback, the 40-60 in favor of the buyback? What was the thinking there rather than a more dividend biased amount? That's the first question.

Secondly, thanks for the new disclosures on the liquidity that potentially is quite useful. Just wanted to know that where -- yes, how you're still thinking about the business in terms of the actual capital? Historically, you've sort of focused towards MSP and the surplus around that as being the preferred metric rather than Solvency II. But if we're thinking about the actual capital and the free capital in the business, how should we be thinking about that today? And kind of what is the level? Because I think that disclosure doesn't appear to be in the statement anymore.

And then finally, sort of looking forward a bit more, clearly, the business is in much better shape than it was when you came into the business, Mark, and a lot steady and the ship has been done, which is great. Looking at the business going forward, do you -- your predecessors really focused entirely on organic growth in a different environment and with different levels of organic growth to what you're seeing, I guess, now. So are acquisitions still firmly sort of off the table, off the agenda? Or is it something that you might consider more now the business is in better shape again, a lot of things have been clarified and you're kind of moving forward, the cash generation that's coming through and so forth. But just curious as to how you're thinking about that.

David, thank you. Good to talk to you. Let's take them in order. In terms of distribution, the 40% cash, so of this kind of 28% of the return is going to be cash dividend. That's a minimum. The balance of 42% is effectively the buyback. We felt at these share prices and the value enhancement to the market to shareholders of having a stronger buyback rather than the cash dividend was important.

I think if you look at consensus numbers for 2026 and you model out the new distribution, it shows a healthy uptick in both cash dividends and in the buyback. So we -- the Board was comfortable that, that would respond to people who are very interested in dividend and also people who recognize that actually a buyback has become a much more accepted tool in the U.K. market and can be very powerfully deployed, and we were keen to deploy it on an ongoing basis rather than a discrete basis.

On capital, the -- there's a reference to the management capital coverage assessment, which I think is a new fancy word for what was the MSB. And I'll let Charles cover that in a moment. But I think the data is contained within the data book around the capital and where we're at. Charles?

Yes, that's right, Mark. Yes. Look, David, I think you're sort of referencing the fact that we are an insurance group, and therefore, we do have reporting requirements under Solvency II and that type of thing. But I think we would suggest that the new disclosure is designed to make clear that really that's not the sort of the limiting factor in terms of how we think about capital and about shareholder distributions, but really the focus is on liquidity.

That's what we focus on and what we'd like you to focus on to. As Mark noted, the management solvency buffer, the MSB, which have been replaced by the MCCA, still lives and it features in our capital and liquidity disclosures. So it is part of the bridge from our total liquidity down to the free liquidity. But capital solvency suggests that's not the key thing to focus on. We would encourage you to focus on those new liquidity disclosures.

And David, on your third question, you are right that I was very clear that inorganic was not something we were going to consider, especially given the share price of old. I think there is such a strong organic opportunity ahead of us. That's where all our focus and attention is. We have seen when players aggregate up other folks, it creates huge disruption and huge distraction. There's a lot of distracted and disruptive players in the market. We plan on looking at that very carefully and seeing if there's opportunities for us to lift our teams, et cetera, from some of our competition, given that they are potentially somewhat discombobulated over recent events.

Our next question comes from Charles Bendit from Rothschild & Co Redburn.

One on AI and one on cash monetization, please. So I just wanted to take a different tack away from how AI might change the customer experience and focus on the adviser experience. I'm just keen to understand if you think AI might drive adviser head count to shift at an industry level between the restricted and independent channels. So my question would be, how do you assess the risk that third-party AI-driven adviser productivity tools could make it easier for independent advisers to operate outside of the SJP ecosystem?

So if IFAs can now run more efficient practices and potentially capture a larger share of the value chain through higher advice fees or by offering clients lower all-in fees at the expense of platform charges, what aspects of the SJP restricted model remain most critical in retaining advisers? Is it primarily brand, the broader support and compliance infrastructure, your succession framework? Or do you just believe that AI solutions in the open market will never really be able to replicate the depth and the integration of your own tech stack?

And then my second question is just wondering if there's any update on your plans to further monetize idle client cash via arrangement with Flagstone. It feels like the FCA is no longer scrutinizing retained interest. So just wondering if you see an opportunity to expand margin there.

Charles, thank you. Two really, really interesting questions. On the AI piece and adviser experience, et cetera, I think a few things stand out, and this is kind of what advisers who come to us and advisers have been with us a while say stands out. A is the element of the scale, capital, the resources we have to deploy. So bear in mind that we announced 18 months ago that we are deploying approximately GBP 260 million back into our business to improve our technology, use of data, broaden our client offering, focus on client segmentation, all of those kind of components.

There's nobody else in the market that's putting that kind of money into the business, into any business. If anybody is putting money in it to buy businesses, it's not necessarily to improve them. And those who are buying are talking about synergies and taking costs out, not putting investment in on that side. Brand and reputation is very, very important. The technical support, just given the complexities of pensions and other things, the technical support that we have. And then also, we provide an advice guarantee for clients and for the advisers effectively saying that we guarantee the advice that they give as a part of St. James's Place.

That's before you get to the element of actually the frequency with which rates change and everything else like that for IFAs is becoming incredibly difficult, which is why I think you're seeing more and more getting consolidated up and aggregated up, et cetera, and why you're seeing kind of small boutiques really struggling to kind of grow and cope with the weight. And if you're going to do technology properly, you need a checkbook. And we have a checkbook. And because of our size and scale, the big players come and talk to us. They want to know what we're doing, what we're thinking, how they can help. They're generally not coming around to the local shop.

So effectively, our big offering for clients and advisers is that we give them the best of both worlds. We give a client the local long-term relationship from somebody who lives around the corner, who kids might go to the same school as your kids, but that person is backed by the power and strength and the brand and reputation of St. James's Place. And an IFA just can't do that.

As for the cash piece, the -- to use your phraseology, the idle cash. The Flagstone level has continued to increase. So we have seen an uptick in terms of the number of Flagstone is GBP 5.7 billion in Flagstone. Just to remind everybody that is not included in our FUM number. We are working with Flagstone, we are pursuing other opportunities as well in terms of what we might do in terms of cash to try and get that money to be more broadly invested.

We know from speaking to our advisers that while clients have money at Flagstone, there are a whole bunch of clients who have money elsewhere. So step one for us is to get some of the money elsewhere into something like a Flagstone or a company like Flagstone. And then secondly is to actually get it more easily transferred across into St. James's Place. At the moment, it's a very clunky going from a deposit account to a holding account to your own personal account to an SJP account and then to get invested. Most people give up the world to live during that journey.

What we're looking to do is to streamline that so that can be a single click across from savings to investment because there I say, as we all know, I think people are over saved in the U.K. as in the U.S., and we need people to invest more and be less worried about timing the market and more focused about getting the money in the market so we can benefit from the compound effect.

So there's quite a lot of time and attention focused on how do we work that better and how do we help our clients be more effective. They've worked hard to make those savings, how do we convert them into sensible investments. Thank you for those questions, Charles.

We currently have no further questions. So I'll hand back over to Mark for closing remarks.

Thank you very much, everyone, for your questions and for your engagement. Really, really good questions today. Three key takeaways, if I could leave you from our results today. Firstly, was that 2025 was a year of strong delivery and execution for St. James's Place. We delivered strong operational and financial results while making significant strategic progress. We're delighted to have updated our shareholder returns guidance going forward a year earlier than originally anticipated, and we move forward with an increased payout ratio of 70% of the underlying cash.

And thirdly, we look to the future with confidence. We've already made changes to the business. We're focused on strengthening and growing SJP and the partnership over the long term. This means that we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in '26 and beyond. Thank you very much, everyone, and have a great day. Thank you.

This concludes today's call. Thank you all for joining. You may now disconnect your lines.

Good morning, and welcome to our 2025 full year results. I'm pleased to report a year of significant progress for St. James's Place. We delivered growth in new business, growth in funds under management and growth in the underlying cash result while, at the same time, delivering great returns for our clients. It was also a year in which we achieved real positive change in our business that sets us up to keep delivering for all our stakeholders in the years ahead. These results reinforce that now, more than ever, consumers need, want and value trusted, personalized financial advice. Our partnership model continues to set us apart as it combines the best of both worlds, personal advice delivered through local long-term relationships backed by the scale, strength and respected brand of a FTSE 100 firm.

Today, I'm going to start off by running through our new business and financial highlights, and the operational and strategic progress we have made during the year. Unfortunately, Caroline is unable to present this morning due to a family bereavement, so I'll then cover the financials before talking about the market opportunity, forward priorities and how we see the future for SJP. So let's start with the strong flows results for the year.

Looking back, 2025 offered a more stable backdrop for U.K. consumers, notwithstanding challenges persisting. On the positive side, mortgage rates generally moved lower and equity markets posted new all-time highs. However, household budgets have continued to be under pressure. Economic growth has been anemic. Individuals had to contend with protracted speculation and uncertainty ahead of the autumn budget and the retirement savings landscape has become significantly more complicated with changes announced by the government.

This has led people to seek professional advice to secure the futures they want for themselves, supporting a robust flows environment for our industry. Against this backdrop, we achieved another year of growth in new business as we sustained momentum that built across 2024. Gross inflows were higher across all products and reflected the importance of having the right blend of wrappers available for clients so that they can weather changes in the financial planning environment.

Retention improved on the prior year to 94.9% despite a short-term spike in pensions outflows in the fourth quarter. This was the effect of many clients accelerating tax-free cash withdrawals from their pensions ahead of the autumn budget in November. Outflow rates normalized as we exited 2025, and this has continued into the early part of 2026. The combination of growth in new business and sustained high retention resulted in net inflows of GBP 6.2 billion for the year, up 42% on 2024.

We achieved strong investment returns for all our clients. Performance across our range of funds and portfolios represented an investment return of 12% of opening FUM net of all charges. Together with net inflows, this drove funds under management to GBP 220 billion, up GBP 30 billion year-on-year. Now to put that into context, it took SJP 2 decades to reach GBP 30 billion of FUM after we were founded in 1991. Now we've grown our FUM by that amount in a single year. That's the scale we operate at today as the leading financial advice business in the U.K.

Strong investment performance, together with growth in new business contributed to an underlying cash result of GBP 462 million, which is up 3% on the prior year, so another year of growing inflows and strong financial performance that highlights the fundamental strength of our advice-led model in a growing marketplace.

The improvement in our financial performance, together with our operational and strategic progress has enabled us to update shareholder return guidance a year earlier than originally planned. So for financial year 2026 and beyond, we intend to increase total annual shareholder returns to 70% of the underlying cash result. I'll provide more details on this later.

Beyond the financials, 2025 has been a year of delivery and execution across the major programs of work we've outlined previously. I'll turn to them now, beginning with the successful implementation of our simple and comparable charging structure in late summer. Delivering our new charging model required, by far, the biggest change program SJP has ever undertaken in its history. Having successfully completed it, we're now much better positioned for the future.

Today, we have an unbundled charging structure that clearly sets out what and how we charge clients for each element of our service, namely financial advice, long-term investment products and investment management. These charges can now be more easily compared to others in our marketplace. We can now tell a more compelling story about investment performance and how it supports clients in achieving their financial aspirations without the cost of advice and product charges being deducted from investment performance. This puts our reporting of investment performance on an equivalent basis to others in the market. The new structure has also unlocked how we can develop our business and proposition for the future.

Turning to our second key program of work, namely addressing the historic client service evidencing gaps. This time last year, we highlighted that we were taking into consideration new industry guidance issued by the FCA around ongoing financial advice services. Since then, we've been focused on adapting our program infrastructure and capability to better reflect our revised approach to redress, and I'm pleased we are now deep into the operational delivery phase of the program.

The experience we gathered in the second half of the year means we have been able to release a further GBP 25 million from the provision held with respect to this work on a pretax basis. This equates to GBP 19 million post tax, and the Board has decided to return this to shareholders in full via a share buyback program. This was the same approach we followed for the GBP 63 million post-tax release we announced at the half year with the associated share buyback program for that concluding in October. While we have a lot of work ahead to complete the job over the course of 2026, as originally expected, I'm confident in the progress we're making.

Our third key program of work relates to delivering our cost and efficiency program. During the year, we completed our transition to a new organizational design to ensure we have the right people in the right places to align to our strategy and drive growth. This led to a 14% year-on-year reduction in group headcount. We also took important steps in optimizing our commercial relationships with suppliers and rationalizing our property footprint, where work during the year secured a 15% reduction in the property square footage we occupy.

What's been really pleasing from my perspective is the way in which our people have supported our efforts and adapted to change. This is never easy, but the efforts we're making to operate more efficiently will create the financial capacity for us to invest at scale, to enhance our proposition, improve our technology and extend our competitive advantage. This is SJP driving the benefits of scale market leadership for all our stakeholders.

The program is on track to be delivered by 2027 and in line with guidance. As we expected, the program has had no material impact on our 2025 results. And this is because the savings we have made during the year, less the cost to achieve these savings, have been reinvested in the business as part of our strategy, funding items such as the launch of Polaris Multi-Index.

For the same reason, we believe there will be no material impact on our 2026 results. Delivering these major programs has been and continues to be a key priority. We're making great strides with other aspects of our strategy, too. We've already capitalized on the implementation of our unbundled charging structure by launching a new addition to our investment offering, our Polaris Multi-Index range of funds that went live during October.

This range of low-cost, multi-asset fund of funds implements our active asset allocation expertise through index tracking funds. They complement our existing range of solutions, enhancing choice for clients across risk profiles. By broadening our investment product shelf in this way, we're helping advisers in their conversations with existing and prospective clients and deepening the positive impact they can have. This is a key part of our differentiated client proposition. The new range has been received well by clients and advisers, and it has grown to over GBP 1 billion of FUM at the end of the year, just 2 months after launch.

So to summarize, it's been a year of significant progress for SJP. We've delivered growth in new business and our financial results, and we're positioning the business for sustained growth and success. I want to take this opportunity to recognize and thank our entire SJP community from our advisers and their support staff through to every one of our employees. They've all delivered brilliantly through a period of significant change across the business.

Now moving on to our financial results. I'm delighted to be able to present the set of numbers you can see on the slide, with strong investment performance and growth in new business contributing to an improvement in our financial results for 2025. I'm going to provide detail on our financial performance for the year, where I'll take you through our cash result, our liquidity position. I will then set out our approach to shareholder returns. I'll cover both returns for the 2025 financial year and more detail on our new shareholder return guidance, which I mentioned earlier. This will apply from the 2026 financial year onwards. I'm not going to cover IFRS or EEV, but information about these metrics can be found in the appendix.

So let's start by taking you through our cash result. We're really pleased to have delivered an underlying post-tax cash result of GBP 462 million for the year, which is an increase of 3% on 2024. There are 3 key drivers of this result. Firstly, average FUM increased by 12% year-on-year. This has increased the net income we earned from FUM to GBP 725 million, up 6% year-on-year. This increase is despite the step down in margin we earn on FUM under our new charging structure, which we successfully implemented in late August. The result is within our 54 to 56 basis points guidance range on mature FUM when we were on our previous charging structure and within our 43 to 45 basis point guidance range on our new charging structure as expected. Going forward, we continue to anticipate that net income from FUM will be within the 43 to 45 basis point range. We expect to be at the lower end of that range in 2026 and to increase within the range over time, which will be driven by factors, including gestation FUM maturing. As usual, you can find a summary of all our 2026 guidance in the appendix.

Gestation FUM maturing provides a high degree of visibility around future income growth, and this remains the case. Caroline's CFO report provides more granular detail for those who want to understand the mechanics underpinning this. The key message today is that, at the end of 2025, we had GBP 53 billion of gestation FUM. And once this is fully mature by 2032, it could contribute in the region of GBP 300 million of additional income to the cash result every year. And this is without incurring any additional costs.

Another important point to note is that while the margin range has reduced upon implementation, it will apply to an increasing proportion of FUM over time. This is because all new business under the new charging structure will immediately flow into mature FUM and the remaining gestation FUM will mature over the next 6 years. Together, these dynamics build a powerful picture of how our income can develop and compound in the medium term.

As already guided, following the expected dip in profitability in 2026 as we experienced our first full year under the new charging structure, we anticipate that the cash result will accelerate from 2027 onwards. This supports our ambition to double the underlying cash result from 2023 to 2030.

The second driver of our strong cash result is the margin arising from new business, which was GBP 100 million in 2025 and driven by business written during the year on our previous charging structure. This margin represents the initial charges on new business after the payment of directly associated costs, such as initial advice fees paid to partners and third-party administration costs.

The profit recognized in this line was historically driven by initial product charges. These have been removed under our new charging structure, and so we expect margin arising from new business to be approximately 0 for 2026 and beyond. Again, this is in line with our previous guidance.

The third and final driver is our continued focus on cost management. Our controllable expenses in the cash result increased by 5% year-on-year to GBP 306 million, in line with our guidance. This guidance continues to apply for 2026. 2025 charge structure implementation costs were GBP 53 million, bringing the total post-tax amount spent on implementation to GBP 119 million. This is in line with our guidance that we expected total costs to be towards the upper end of our original GBP 105 million to GBP 120 million post-tax range. There will be no further charge structure implementation costs to come in 2026.

More information on the other lines within our underlying cash result can be found in the appendix. Releases from our ongoing service evidence provision are not recognized within our underlying cash result. For 2025, these releases amount to GBP 82 million post-tax, and so our cash result for the year is GBP 544 million. So all in all, a strong financial result for the year, which sets us up well for 2026 and beyond.

Now I'll move on to our balance sheet. One thing we committed to do as part of our work to simplify our financial reporting is to articulate our liquidity position more clearly, which is more relevant than capital and our ability to provide shareholder returns. As a result, I'm going to take you through our new and improved liquidity disclosures, which you will also find in Section 3 of the financial review in this morning's press release.

At the end of the year, we had approximately GBP 2.7 billion of liquid assets on our shareholder balance sheet, which are predominantly investments in AAA-rated money market funds. Much of these are assets which we need to hold to run the business, covering items, including working capital, amount set aside for policyholder tax and our assessment of the amount we need to hold to cover capital requirements in our regulated entities. This is known as the management capital coverage assessment. After deducting these, you are left with liquidity of GBP 271 million, which we refer to as free liquidity held at group center. You can see a full reconciliation between total liquid assets and free liquidity held at group center on the slide.

We are comfortable holding this level of free liquidity as it provides a layer of both prudence and flexibility in how we run the business. We will regularly review this to ensure we continue to optimize our capital allocation priorities in line with our capital allocation framework, which is set out in the appendix.

In addition to reconciling liquid assets to free liquidity at group center, we have added a table setting out cash flows into and out of free liquidity over the year. You can see a summary of this information on the slide, and it demonstrates that our business is highly cash generative.

Over time, the net remittances from subsidiaries will broadly reflect the profit generating capacity of the business. The disclosure clearly demonstrates that we have strengthened our balance sheet over the past year. This was the next step in getting the balance sheet into the position we wanted it to be in after we put an end to regular usage of our revolving credit facility and repaid our bridging loan.

As I said earlier, our new liquidity disclosures are part of our work to simplify our financial reporting and make it more comparable with peers. Caroline and her team will complete this work by improving how we report our financial performance, which we plan to do for our half year 2026 results. We will provide full details about this in advance of the half year.

I'm now going to spend some time setting out our approach to shareholder returns, which are a key component in our capital allocation framework. In line with our current guidance, we will return 50% of the full year underlying cash result to shareholders for 2025, structured as 18p per share in annual dividends with the balance distributed through share buybacks. This means ordinary shareholder returns are GBP 231 million for 2025, subject to shareholder approval of the final dividend at the AGM, and you can see the component parts on the slide.

In addition, as I mentioned earlier, we will be buying back GBP 90 million of shares as we return the post-tax release from the ongoing service evidence provision to shareholders. This means that the share buyback program, which will commence shortly, will be for GBP 123 million. Adding in the GBP 63 million of shares we bought during the year following the release from the same provision at half year means that we are delivering total shareholder returns for 2025 of GBP 313 million.

As I mentioned earlier, I'm delighted that the Board has been able to update our forward-looking shareholder return guidance. This update has come a year earlier than originally planned, driven by our strong financial results for 2025 and the operational and strategic progress we have made. Therefore, for the 2026 financial year and beyond, the Board intends to return 70% of the underlying cash result to shareholders. This will comprise an ordinary dividend, which we expect will make up at least 40% of total shareholder returns and a share buyback for the balance, subject to the Board's ongoing assessment of the most appropriate mechanism for that return.

Put another way, we expect the dividend component to be at least 28% of the underlying cash result. The Board intends to pay an interim dividend and conduct an interim share buyback following our half year 2026 results. We anticipate the interim dividend will be 6p per share and that the interim buyback will be 1/3 of the total ordinary buybacks in respect of 2025, excluding those relating to releases from our ongoing service evidence provision.

And so to conclude on the financials, I'm really pleased with the result for 2025 with both strong investment performance and growth in new business contributing to this. We have strengthened the balance sheet while also returning a total of GBP 313 million to shareholders in respect of the year through the dividend and the buyback programs I've set out. And we will be moving forward with an increased 70% payout ratio for ordinary shareholder returns for 2026 and beyond.

I now want to talk about the exciting market opportunity ahead of us and our near-term priorities. While consumers have been under pressure for some time, there remains considerable household wealth across the U.K. Analysis suggests that U.K. individuals have GBP 3.5 trillion in invested assets and an additional GBP 2.1 trillion in cash savings, totaling GBP 5.6 trillion of addressable wealth. This wealth is expected to grow 6% per annum compound to 2030.

At the same time, many consumers are missing out on the opportunity for greater financial freedom as they're oversaved and they're underinvested. Recent analysis shows that approximately 15 million people in the U.K. are holding an estimated GBP 614 billion in surplus cash that could be invested. That's money sitting on the sidelines, not working for individuals nor for the wider economy. Reshaping the financial well-being of the U.K. through great financial advice represents a huge opportunity for us, our industry and the U.K. economy, yet there is an advice gap today with only 9% of adults in the U.K. receiving regulated financial advice.

We know from multiple studies that lack of access, combined with issues of awareness, confidence and affordability means there are millions of individuals who aren't getting the benefits of financial advice, and this matters. Great financial advice doesn't just invest your wealth. It changes lives. It helps people make informed decisions, navigate uncertainty, have the confidence to act and gain control over their financial futures.

It supports families in planning for education, retirement and care. It builds resilience and confidence through a trusted long-term relationship. Great financial advice can deliver these wide-ranging benefits through the combined power of technical expertise, which is assisted by technology and human relationships.

Now I want to focus on the human element for a moment as it's an important aspect of financial advice that shouldn't be overlooked. Our recent proprietary real-life advice research found that 92% of those receiving ongoing advice still want human involvement in financial decision-making. Similarly, a Vanguard survey found that 93% of those taking advice say the human element is extremely important and that a neglected relationship is the main reason clients leave advisers.

Advisers take time to build trusted long-term relationships and to understand their clients' goals and aspirations. They get to the bottom of what makes clients tick. They understand their hopes and their fears. These adviser-client relationships are invaluable. Relationships enable advisers to be effective behavioral coaches, ensuring clients understand the need to take appropriate investment risk to achieve their long-term goals.

And in this way, advice also plays a role in supporting and strengthening our economy. Relationships provide peace of mind for clients who know their financial affairs are being managed by an expert that they trust. This also reduces the risk of clients overreacting in moments of volatility. Relationships deliver emotionally intelligent support to clients during key moments in their lives, be it marriage, having children or dealing with a bereavement. Each of these factors make a material difference to clients.

We believe that human-led financial advice grounded in personal relationships is not only here to stay but will thrive in the future. At SJP, we have the best financial advisers working alongside leading technology, a trusted and respected brand, and an attractive product and investment range that works for clients. This is a powerful combination that offers the prospect for improving efficiency in how we and advisers operate while enhancing client experiences and delivering good outcomes. Technology will strengthen relationships between clients and advisers, not replace them.

This is great financial advice, and the opportunity is huge. As the market leader, we see this clearly. We have the expertise, the experience and the ambition to reach more people, help them on the journey into advice and keep delivering value that helps them realize bolder ambitions. When we succeed, we not only grow our business. We contribute to a stronger, more financially confident U.K. economy, where wealth works harder and people feel empowered to invest in their own futures.

So with this market opportunity in mind, I want to briefly recap on the strategy we set out in 2024 and where we are focusing our time and attention. We set out that from 2024 to 2026, we would focus on the strengthen phase of our strategy, which is predicated on enhancing the fundamentals of our business. It's about creating a robust base from which we can then amplify our growth ambitions.

So what does this mean for 2026? Under the strengthen phase of our strategy, we are focused on completing our remaining major transformation programs. We will achieve the guided run rate savings on our cost and efficiency program by 2027 so that we can open the aperture of our reinvestment program, which will allow us to shape an even more exciting future for our business. We will complete our historic ongoing service evidence review and put this legacy issue firmly behind us. We will continue working to embed a more performance-focused culture across the organization.

We will continue to simplify and standardize our processes, improving administration and embedding more automation. This will improve the client experience and enhance efficiency for our advisers. Ensuring we continue to provide a leading adviser offering with advisers able to build bigger, better businesses within the SJP partnership will be a key area of focus for us. We will be evolving the range of support we offer advisers by extending our investment into testing and trialing additional technology tools designed to streamline processes, reduce administrative burden and boost day-to-day efficiency.

Now we already have a range of AI-enabled and digital tools, which we've introduced. These include tools which respond to questions on our advice framework and business submission processes. We are also rolling out tools to capture client adviser conversations and turn them into structured and compliant ready-to-use reports.

In 2026, we will continue to build on this range. The goal is simple: to free up more time for advisers to focus on what they do best, building trust, deepening client relationships and delivering personalized, high-quality advice. We have a really privileged position here. As the market leader, we have the scale and capability to be able to work alongside leading global technology vendors as we leverage their technical expertise.

And we are combining this with the practical end user focused insight that only we can get from working day in and day out with nearly 5,000 advisers across the U.K. We'll lean into these as we continue to expand and enhance the suite of technology tools that are available across the SJP adviser ecosystem going forward. This will improve the great service advisers already provide to their existing clients. It will also enable them to reach more clients, growing their businesses and growing our business.

In 2026, we'll also be preparing for the amplify phase of our strategy. This includes refreshing our cash proposition for clients, which is important given the central role that cash plays in every sensible financial plan. And we'll be taking the first steps towards enhancing our high net worth proposition, reflecting our desire to have a differentiated proposition for this fast-growing client segment.

So to conclude, 2025 was a year of strong delivery and execution. We produced growth in new business flows and funds under management. We successfully implemented our simple, comparable charging structure and made good strides setting SJP up for sustained growth and success.

The changes we're making will ensure we are best placed to continue to capitalize on the compelling market opportunity in U.K. wealth management, where the need for financial advice is growing. We are the scale operator and the home of financial advice in the U.K. We're privileged that over 1 million clients are already securing their long-term financial futures through the power of SJP's professional advisers, and this gives us the experience and insight to keep extending our advantage. We've got a proven track record of delivering growth, and we expect to see this translate to accelerating earnings growth over time as we achieve scale operating leverage.

We look to the future with confidence. While the external consumer outlook remains uncertain, the changes we have already made to our business, combined with our focus to strengthen and grow SJP over the longer term, means we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in 2026 and beyond.

Thank you for listening, and do please tune into our live Q&A, which will kick off at 9:00 a.m.

Good morning, everyone, and welcome to the St. James's Place Half Year Results Q&A. My name is Brika, and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Mark FitzPatrick, CEO at St. James's Place, to begin. So please go ahead, Mark.

Thank you, and good morning, and thank you for joining us today. It's Mark FitzPatrick here. I'll open for questions shortly, but before then, I just wanted to reiterate 3 key takeaways from the half year results announcement. Firstly, SJP is in good shape, performing well and growing. We achieved net inflows that were double what they were in the first half of 2024, and our FUM stood at a record GBP 198.5 billion at the end of June. This is a testament to the value that more than 1 million clients place in their adviser and SJP to help them secure their financial futures.

Secondly, a strong period for new business has been mirrored in a strong financial result. Growth in the underlying cash result of 17% was a result of improving new business flows, rising FUM and cost control. This result highlights the benefits of our simple, scalable business model.

And thirdly, we're making good progress against our key programs of work and delivering on our strategy. I said 6 months ago that 2025 would be another year of heavy lifting for the business, but we're getting the work done. We're on track to implement simple comparable charges less than a month from now. We're taking costs out of the business, as we said we would, and we're moving forward with a revised approach to our review into historic ongoing servicing. And this means we've been able to release some of the provision we held against this, which we will be returning to shareholders through a buyback.

So it's been another period of hard graft but a successful one that positions SJP for sustained growth and success. We've still got plenty of work ahead, but we're confident in our ambition to double the underlying cash result by 2030.

So let me pause there and hand over to the operator so that we can open up for questions.

[Operator Instructions] The first question comes from Andrew Sinclair with Bank of America.

Three for me as usual, please. First, just there was a big step-up in the cash margin arising from new business as a percentage of gross flows in H1. I know that line is about to change quite a lot post the new charging structure, but just keen to understand why there was such an improvement in H1 this year. That margin in percentage terms has been going down for the last few years, so nice to see a tick up, but just keen to understand a little bit more about what's going on there.

Second was just on adviser headcount. Just wonder if you can tell us, in the run-up to the new charging structure and with the productivity exercise, was there any uptick at all in departures in H1? I can see the net growth, but just keen to understand the moving parts. Was there any change in departures in H1?

And third was just on the academy, just how many trainees graduated in H1 and how many are in the academy today.

Great. Andy, thank you. Why don't we start off with the -- I'll hand over to Caroline for the element of the new business, and then I'll pick up the adviser headcount in academy.

Yes. Thanks, Andy. So you're right, the margin on new business is higher. So we've had about 23% due to the increase in gross inflows, but it has been higher at like 40%. The rest is operational leverage where we do actually have not everything, not all the costs are actually linear or all connected to the rise with the increase in business. So that's purely what it is, is some fixed costs, and we're getting a positive operating leverage from that.

And Andy, on the adviser headcount over the first half, I haven't seen any shift or change in the underlying patterns of joiners or departures or retirements, et cetera. So it's been -- with these kind of numbers, as you can imagine, everybody has been very busy, heads down, really focusing on clients, really focusing on supporting clients through what has undoubtedly been quite a volatile market, lots of geopolitical and broader uncertainty in the world. And that's the time when clients look to their advisers for support, reassurance, and that's when the advisers really stand up and support their clients in a very meaningful way.

So there's nothing in particular that stands out in any of the underlying numbers around adviser headcount. We continue to work with our advisers and with our teams in terms of broader productivity. We are spending time and working hard to try and improve as well some of our technology to make it easier for advisers to spend more time in front of clients and therefore less time on admin and related matters and paperwork, so trying to get the kit and systems to do most of that and to automate a lot of that.

And on the academy, the academy continues to be a very, very important part of St. James's Place, not just for us but I think for the whole industry. We attract in a large slice of all the new joiners to the profession. We will continue to do that. We think it is a very, very important role we play, as I said, not just for SJP but for the industry as a whole.

The advice gap is enormous in this market, and we need more advisers in the market. We need high-quality advisers to be able to support more and more clients because I think more and more people are realizing they cannot rely upon the state for pensions and the like, and therefore, they need to take matters into their own hands. And generally, you're going to need an adviser to help you do the right thing. So advisers graduating through the year and no major changes on that, and advisers in training at the period end is all kind of in line with what we've seen in the past, no major changes to that component.

We will continue to look in the same way as we have with the partner productivity. We're also going to look to see how do we actually try and make sure that we get higher quality through the academy so that more people that join actually make it through towards the end.

So that's one of the things we're going to be addressing over the course of the next 12, 18 months, but we're delighted to be bringing more young people into the academy and a lot more women coming in than generally we see across the industry because we're seeing more and more women actually gaining financial wealth, and we want to be able to give clients greater choice about who serves them, who works with them along the way. So we're really pleased that we'll be able to contribute to the profession as a whole, help shape the profession in terms of demographics and in terms of gender mix.

All great news. Just have you got the numbers by any chance for actually how many people are in it and graduates? Those are things you've given in the past, so it would just be helpful.

Not in front of me here, Andy. I think the general tone that we're trying to do is an element of where we're going with this. It continues to be big, it continues to be important, continues to be something we'll invest in.

Your next question comes from Nasib Ahmed with UBS.

Three questions from me as well. Firstly, on just derisking the charge structure change on the 26th of August, can you talk a little bit more about how much testing you've done, how comfortable you are that it's not going to cause any disruption? And maybe within that, kind of talk a little bit about how you've traded in the first month of this quarter.

Second question on targeted support and the FCA's kind of ambitions around that. Are you still committed to just face-to-face advice? Or are there other things that you're kind of looking at to support that ambition from the FCA?

And then finally, on the provision release, I guess the question is the [ fourth ] interest rate is changing as well as coming down. You've had some experience around kind of paying claimants, but is there -- as you develop more experience, should we expect another reassessment of the provision at some point in the future as well?

Thank you for those broadly three questions. On the simple comparable charging, we have done extensive testing. We did a dress rehearsal of the whole transition recently. That went well. That's given us the confidence to be able to contact clients now ahead of the change, which we have now done, so all clients now informed of the change. So a high level of testing has been done, and we are as confident as you can be on these things going into that public holiday weekend.

I'm not minded to give a running kind of synopsis of kind of trading. Suffice it to say, July normally, July, August tend to be the quieter months of the year and as people go away and holiday clients go away on holiday, so you shouldn't be surprised to see that that might be kind of following that kind of broader footprint. But that being said, our partners, advisers are still very busy because there's still a lot of clients and a huge advice gap out there. So the guys are working hard. And we've seen over the first half an increase in volume of cases and, for the first time in a while, an increase in the value, a modest increase but an increase in the value of cases as well. So both are up this half.

In terms of the second question around targeted support, technically at the moment, the consultation paper from the FCA does not allow or does not suggest that appointed reps are going to be able to take or go down the targeted support route. Now that's because the rules of -- the legislation has been written limiting what appointed reps can do. Treasury has recently announced that they are going to consider opening that and extending that component.

For the time being, we consider that actually, we are -- and it's a key part of our purpose statement that we believe in the power of advice and the value of advice. So we think that actually providing clients with advice is a very, very important thing and providing clients with individualized advice is a very, very important thing.

Targeted support, we see is going to be net positive for the industry, for the market, for the U.K., for consumers. Helping people to take -- to start to take a little more ownership and starting to think a little bit more about their investments, that's got to be a good thing. And we're really, really keen to support that. It could in time be on ramp for individualized advice, but we don't expect it in any way to cannibalize our business. We do expect it to get people to start thinking and engaging in a way that they really should, so we see it as a big positive.

And in terms of the provision cover?

Yes. So yes, as we said, this is a 2- to 3-year program. I think last year, just as a reminder, obviously, we did a lot of builds into this year and then obviously execution for this year, and then we expect to have a sort of tail next year. I think what's happened in the first half of the year is we have obviously -- we have looked at the FCA industry guidance that came out in February and incorporated that into our redress methodology. And then we've also had more experience as we've gone through the program. So we've incorporated those, and that's how we've calculated our best estimates of the provision now. And obviously, then we have a release from that.

So H2, we're going to continue to execute. We will -- with all provisions, we will be reassessing it as we go through and we get more experience. But I'd say this accommodates obviously the FCA guidance and experience to date. So yes, it's -- I'm comfortable where we're at now, but we'll continue to reassess again at year-end. Obviously, if we've got some news, we'll let you know.

Your next question comes from David McCann with Deutsche Bank.

Congratulations on some decent numbers this morning. Yes, 3 questions inevitably from me as well, please. I'll start with the provision release since that's obviously very topical. I mean can you confirm how much of that release, about 20% release was sort of methodology change from the FCA guidance and so forth versus the experience change that you've got? Is there a way of roughly quantifying that? I don't expect it to be

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And then on that program more broadly, when do you anticipate you'll actually start sending the letters out to the clients which you think are affected more broadly?

And then sort of turning to the flow numbers. What drove the improvement, do you think, in net flows in the second quarter? What are the anecdotes you're hearing from advisers on the ground? Is this client appetite? Is it easing cost of living pressures? Is there anything in there related to the upcoming fee structure changes that -- with the incentives that are going to change for both the advisers and the fee [ covers of ] the clients? Is there any sort of front running, if you like, of the charges? Is there anything in the flows for that or -- just curious as to what's causing improvement.

Thank you. David, I'll ask Caroline to pick up the provision release piece first, and then I'll come around to the letters and the flow.

Yes. And David, I'm not going to go into detail. I think look, it is a combination of the two. We take both into account, but I'm not minded to give you the detailed breakdown on that.

David, letters will be going out next week to clients. So the correspondence will be started -- correspondence has been going for a little while, but it will be ramped up under the new methodology from the element of -- next week. So clients will start getting things out, so it will start moving quickly.

And on the element of flows, second quarter more generally, I think we saw -- was it 2nd of April Liberation Day, we saw a huge uptick in terms of client questions, inquiries, engagement with advisers. I think that just caused people to take a step back and say, gosh, actually, what am I doing? How am I protected? How am I looking after my affairs, et cetera? So we saw a lot of activity.

We've also -- with the government talking about and there's been a lot of speculation about ISAs, what's going to happen there. As everybody knows, we don't offer a cash ISA, but it got people, I think, thinking a lot more about ISAs, and have I used my allowance adequately or properly. And we have seen a -- you would have seen from the numbers an impressive uptick in terms of the investment bonds. And I think that's a consequence of the pensions and the inheritance tax linkage going forward through this government.

So it's a combination of factors. I think the U.K. consumer is kind of holding up well. I think last year, earlier this year, seen kind of real wage growth. I think with growing -- potentially growing unemployment coming into the U.K. later on this year, there's a sense of if inflation is high, that's going to give rise to less wage pressure, and that might slow down real wage growth. So it will be interesting to see how that plays out in the back end -- back half of this year, early next year. We are all expecting I think, banks to reduce rates. And I think that lifts up a little bit of enthusiasm and a little bit of confidence. We're seeing a relatively stable housing market.

So consumer, I think, has weathered the storm incredibly well in the U.K. The big plea I have for government generally and for Treasury is let's try and create as much certainty and stability. I think extended period of speculation is dangerous and unhelpful. We saw that at the back end of last year for consumers. It may be short term helpful for us, but for the economy and for consumers at large, it's not a great thing. So we're really, really keen on stability and certainty.

But that being said, while there isn't a lot of that, we do well. Advisers are there, talking to clients, and generally shakes clients to move or customers to move in a different way. So it's a combination of those. In my wanderings around and speaking with partners around the country and going to visit them in their practices, they're all saying they are super busy. The issues of last year, early last year, are so far in the recesses that clients don't talk about these things anymore. They're really back to talking about them, their affairs, how they protect themselves and what they need to do to look after themselves and their families. So that's a conversation that should be taking place, and that's probably the conversation that got lost for about 12, 15 months over the course of last year.

Great. Any -- and just to confirm, you don't think any of the uptick is to do with the change of the fee structure and potential any sort of short-term moves around that, it's all due to the fact that you've already mentioned?

The big thing to remember, David, is that these are not spontaneous actions from clients. Very few clients wake up suddenly and say, right, I need to do X, I need to do Y vis-à-vis this for this particular part of the world. So at the edges, there may be an element, but we think it's at the edges. We'll only be able to get to see that later on because bear in mind, from a client perspective, the delta is not particularly large. And we're encouraging clients to do things that they should be doing and making the most of tax advantages ideally that they should be taking advantage of that are available. And that's why pensions is still such an important part of the investing landscape.

Your next question comes from Enrico Bolzoni with JPMorgan.

So one, you say that you will introduce a passive range within your Polaris product. So can you give us some color perhaps on whether you see in the immediate term that more as an opportunity or a threat? So I'm thinking, do you see clients that want passive allocation, and because you cannot offer that yet, they are currently allocating somewhere else? Or do you think that that could have a bit of an impact on your margins perhaps and put some pressure there? So that's my first question.

My second question is on the dividend policy. You clearly are performing exceptionally well. When shall we expect a potential reversal in the capital distribution policy and perhaps see again higher dividends being paid?

And finally, on the cash balances, you had quite a bit of money with Flagstone. Can you give us an update there perhaps on the amount and whether you think that this will eventually move back into investment products anytime soon?

Thanks, Enrico. I'll take the first and third and then hand over to Caroline for the second on the dividend piece.

In terms of Polaris Multi-Index, we see it as a net additive because at the moment, for clients who want to have some type of exposure to index tracking funds and the like, we can't offer that today. And therefore, those assets will sit outside of the SJP garden. Ideally, what we'd like to do is be able to extend that offering so that clients that have some of that investment exposure have an option to be able to bring it across. And we've deliberately called it the Polaris multi -- or calling it the Polaris Multi-Index, leveraging off the fantastic success that we've had with Polaris so far. So we see it as a net additive.

In terms of margin, when it comes -- once we have regulatory approval, then the guys will be able to talk a lot more about what we think the margin on this is going to be and the overall picture. But suffice it to say, we're doing this because we think it's going to be the right thing for clients, we think it's going to be very helpful to our advisers, and we think it's going to be good for shareholders as well because it's going to be an incremental value and incremental FUM coming into the garden.

On cash balances with Flagstone, Flagstone balances have gone up. I think they're GBP 5.2 billion at the half year. We have seen more clients putting money there. The average client balance is slightly down from where it was previously, but we have seen more clients linking in there.

We are looking during the course of the first half of next year to explore what and how we might do things ever so slightly differently with Flagstone, but it's working really, really well for our clients, it's really working really, really well for our advisers in terms of being able to have that offering.

And I think what it probably speaks to is just -- and you would have seen it with the banks reporting out earlier this week. It's just people saving just with a little bit of a niggle and growing uncertainty in their minds going forward, just hedging their bets a bit in terms of diversification. We're seeing good intake and good uptake in terms of as you saw flows, people actually investing in the market. But there are, I think, people as well saying, I'm just going to hold a bit of cash for the time being just given some of this uncertainty that's out there.

Now cash, I believe, and I've said this to the Chancellor, is an important part of everybody's portfolio. That being said, we are concerned across the U.K. as a whole that people are probably slightly oversaved and underinvested. And that's something that our advisers are continuing talking to our clients about. It's not something, I think, our clients really struggle with, but it's a broader U.K. consumer piece. But it is something, I think, that we are mindful of. And as confidence builds, we're looking to make it easier and easier for people to be able to move from Flagstone into the SJP garden to be able to invest. And Polaris Multi-Index may provide a useful avenue, useful opportunity and catalyst to drive some of that, but let's see.

Caroline, on the dividend policy.

Yes. So as we're aware, we have set our return guidance for '24 and -- or '25 and '26 as we go through the period of transition. And just a reminder, really, we set this to give certainty in the returns during a real period of change that we're going through in the business. And I know that we've had a good start to the year. We're also making good progress with our key programs of work, but I can say there is still a lot of work to do. We still got a lot of that going on. And obviously, there's a lot of sort of uncertainty in the sort of macroeconomic environment, although we can -- obviously, that stresses the importance of advice obviously.

So look, as our capital allocation, it was set out, we always consider returning excess capital to shareholders when it's over and above what we can invest in the business. And you can see it from the fact the Board has actually decided to distribute the full amount of the OSE provision posttax via buyback. Look, we will keep assessing it and we will assess the longer-term capital returns that will go to the Board at the appropriate point in time, but I'm not going to preempt them by putting a date on that.

Enrico, let me just -- one thing I should just mention on the first question on Polaris Multi-Index, we don't envisage that Polaris Multi-Index will cause us to have to revisit our margin guidance that we came out with previously in terms of the 43 to 45 bps post the simple comparable charging change.

Your next question comes from the line of Andrew Crean with Autonomous.

A couple of questions, if I can. Firstly, could you -- on excess capital and assessing excess capital, could you provide some practical framework for us to assess when you hit excess capital so that we can understand and predict that?

Secondly, could you talk about performance of your funds in the first half of this year relative to sort of peer groups? And then thirdly, could you talk about, whether on the redress issue, you have got advisers contributing to the redress issue where they've been serial offenders?

Okay. Let me -- Caroline, are you okay to start with the first one?

Yes. Yes, I will. And Andrew, I haven't forgotten that I promised, that I promised this to you. Look, we are -- we've already started simplifying our reporting. This is all part of our simplification of our reporting, which we've started, and hopefully, you've seen that we've started to sort of refine our financial reports and focus on key metrics using a data book. So we've started that, but we're actually doing a much more holistic review, which we're doing in the second half of the year. Some of this is facilitated by the new charging structure. So I will report back on that at the full year, and giving you that transparency is very much one of my objectives.

Look, I can assure you, it is a capital-light business we're running. I'm not holding assets over and above what we need for our solvency and what we need to invest in the business like the loans and the renewal income asset. But I am aware I owe you that, and I want to do that. So I will update at the full year on how I'm going to do that.

On performance of funds, the funds have actually performed really well. Very, very pleased. The guys have done a fantastic job. On a 1-year basis, if I look at the new world, so kind of a like-for-like, so I've taken out the advice and platform fees, from -- at an AUM level, kind of upper and second quartile, about 90% of our AUM is in those quartiles, so performing really well. And on a 3-year, it's about 80 -- low 80s that are in the upper quartile.

So really strong performance. The guys have done very well. And they kind of go into this environment with a very active asset allocation and a real opportunity to be able to focus on the very best fund managers around the world to be able to help support and guide them, and that's part of the magic of the formula.

And Andrew, on the third question around advisers and the historic evidence provision, the provision is still a gross provision. We have not taken any allowance for any recoveries from advisers. For the most egregious cases, we will be sitting down and talking with advisers. As I've said in the past, we're not looking to nickel and dime, but if there is -- heaven forbid, there is evidence or lack of evidence for many years across many clients in an adviser's portfolio, then we'll be sitting down and requiring some contribution from them for this because that's not really the expectation.

We now have a question from Larissa Van Deventer with Barclays.

Just one very basic question from me. With the new fee structure going live in the bank holiday weekend at the end of August, what are the key steps that need to happen to ensure that this goes smoothly, please?

Larissa, there's a run book with about 880 lines that is going to run through. There is a huge amount of stuff that's going to be going through on that piece. The guys have run -- as I mentioned earlier, the guys have run through -- we've done 3 dress rehearsals now. Each one has had an element of learning, fine-tuning. So the guys have got it down. They know exactly how long each step of that 800 maybe will take. It's a fantastic team. I'm immensely proud of what they've done so far and all the testing and checking and support, et cetera. We'll have teams from around the world coming here to support us over the course of that weekend so that if there are any wrinkles along the way that we can deal with it. And we're doing it over a bank holiday weekend so that if there are any issues, we can deal with them. We need 48 hours to 72 hours, effectively just gives us the extra check and balance so that we know we can go live on the Tuesday morning with a great degree of confidence.

So at this stage, we're all systems go. Clients have been communicated with, all the data, all the systems that are there, and we've got everybody on standby. At the moment, they are catching a breath, recovering from all the testing they're doing so that they're ready to stand up in just under a month's time to go live.

We have Greg Simpson with BNB Paribas.

I have 3 questions from my end. Firstly, can I ask conceptually how you think the 43% to 45% margin evolves over time? I guess the assets ex gestation are higher margin, but you'll have more fee tiering, so the outlook in the medium term there?

Second question, within your fund mix, it's quite striking that only 3% of AUM is in alternative investments when many wealth managers are keen to get that up. Can you maybe flesh out your thoughts on private markets and if you can leverage your scale to get better pricing and differentiated product for your clients?

And then thirdly, I noticed SJP Asia is now Asia and Middle East. Can you maybe flesh out Middle East in -- the Middle East in terms of your current scale and offering, if it's mainly expats, and the opportunity?

I'll pick up the second and third first, and then I'll ask Caroline to comment on the first. So in terms of AUM, and also, yes, it is a fairly modest percentage of the overall, partly, that has something to do with the fact that the funds that we have have daily pricing and daily liquidity, and daily pricing and daily liquidity in the private market space are natural bedfellows, so also in this space and in our offering have an important role to play.

One of the things I did mention as part of -- last year as part of the strategy was that we would look at -- and this is probably well into the kind of second half of next year. We'll look at the element of how we might extend our alt offerings and what we might do with that. I'm not sure a normal daily pricing, daily liquidity is necessarily going to lend itself to that. So we're going to look at different vehicles that we might do. I am a fan of private markets. I do think they can complement an investor's portfolio well. We're seeing more and more of the economy in the private space. And therefore, we want to make sure that we get appropriate exposure to that for our clients.

On the question of Asia and the Middle East, we opened up operation in Dubai about 18 months ago, give or take. It is predominantly an expat market. I was out there earlier on in June, thankfully avoiding the worst of the July heat, but I was out there earlier in June, meeting the team. It's still a small team, but actually, the opportunity out there is huge. The market out there isn't particularly well served, so we think there is a great opportunity there. There's a lot of funds there. There are a lot of young folks there. So we want to really make sure that we give them and get them onto the right discipline and the right direction of travel.

The one thing I should also mention, Greg, is at the moment, Polaris doesn't invest in alts. So as Polaris has got larger, that also is going to be reducing an element of the percentage.

Right, so with that, let me hand over to Caroline on the margin piece.

Yes, absolutely. No, Greg, thanks for that. And you're right. I mean obviously, as the different product mix will -- it does impact that. But that is why we have the range and we think we'll be within that. Some aspects might be up, some might be down a bit, but we're going to keep monitoring it. We're comfortable within the range. And obviously, we'll get back to you in the future obviously in longer term if we see that changing, but just it's within the range.

We have a question from Andrew Lowe with Citi.

The client retention has improved quite a bit in the first half at above 95%. Can you just talk through the drivers of that? Is it a sort of normalization of the sort of macro environment, people feeling a little bit more comfortable? And how do you think this is likely to evolve in the future? Do you think this is a sustainable level? And how do you think this is going to be affected by your new charging structure?

The second question, just following on the discussion on the advice boundary review and various changes proposed at the FCA, clearly, it's good that policymakers are looking to encourage more investment and increasing your TAM. I'm curious if you think that the retention of high-value customers at D2C models and maybe also banks can be improved by this. And I'd love to know just in a bit more detail if you could break down where you're winning business from in terms of the gross flows. So specifically, D2C and banks, how meaningful is that in terms of your growth flows?

Andrew, thank you. So in terms of client retention, we are very, very pleased with it. We're pleased, it's kind of back up the levels that we saw of old. Partly, that is an element of our story, our brand and the narrative around SJP having improved, having settled down significantly. Main part of that, though, is down to the fantastic job the very professional high-quality advisers do, supporting clients, engaging with them and really demonstrating the true value that they bring to the conversation. The average duration of client-adviser relationship is nearly 10 years. I mean it is very, very impressive. And I think all of that helps to build up the element of client retention.

We're also bringing in more young clients, younger clients than we have in the past. We've got a good uptick in clients in their early 30s. So getting them engaging, investing early on, it's just so, so important. So if we can get that practice in early, that will also just help to drive up client retention because in an ideal world, those will be clients for the next 30, 40 years and et cetera in terms of as we go forward.

In terms of AGBR, yes, I'm delighted that policymakers have got together, Treasury, FCA, the market. The way they've done it has been exemplary across the patch. So absolute hat off to the FCA and Treasury for what they've done and the government for really leaning behind this, the Chancellor and the Economic Secretary really trying to drive this through.

The element of where do we think this is really going to buy, I think this model is likely to be -- the targeted support model is likely to be a digital model because it's going to need to be very lean. As soon as somebody personal, a human is engaged, you can't unhear what you've heard. And if you hear something that kind of breaks you out of targeted support, you're then in a more challenging situation with that potential consumer.

And as for the flows from our business and the pensions and the like, it's a broad smattering of consolidation, ongoing regular premium and kind of single premium elements that come through. We're taking from elements of a lot of the insurance companies and a number of the other platform providers along the way. So I know all the banks are really focused in terms of the Advice Guidance Boundary, very interesting opportunity for them. I think the answer to this is going to be the quality data and digital technical experience.

Your next question comes from the line of Ben Bathurst with RBC.

Three from me as well, if I may. Firstly, what's the client feedback been on the changes to the charges following the communications you've put out in recent weeks? Has that landed how you had hoped? And are you confident that clients are able to understand the changes?

And then secondly, on the flow outlook, I wondered, is your base case that there will be a period of adjustment for advisers from September that might slow down flows for a period post the changes? Or are you hopeful of a sort of seamless transition there?

And then thirdly, any update on plans to potentially acquire more businesses as part of the BSP process? And were you any more active in this respect during the first half?

So let me -- I'll deal with the first two, and I'll ask Caroline to pick up the third one. In terms of client feedback, well, as you can imagine, we spent quite a lot of time with client focus groups, we spoke to partners as well, and we had communication experts in, talking and helping us actually craft the letters and the messages that went to the client. So in theory, it's kind of as close as designed by clients for clients, if you will. When I asked my chief operating officer the other day what kind of uptake have we had in terms of inbound on the letters and the like, he said, I think last counter, there was something like 51 inquiries, so nothingness on that side.

And I think while we as an organization have agonized over this for nearly 2 years while you as analysts in the market have been very reflective in your modeling, et cetera, and while the media and the regulators have agonized over this, from a client perspective, actually, it's not a major event in their lives because ultimately, what they're doing is they have huge faith and trust in their adviser. They have a long-term relationship with their adviser. The underlying fee component isn't changing massively one way or other. So I think as far as many clients -- the vast majority of clients, they will see a modest decrease along the way. And I think that will probably -- all those factors contributing to the kind of level of feedback we are not getting.

In terms of flow outlook, as you can imagine, we have been spending a lot of time with all our advisers, trying to support them. One of the frustrating pieces around this program is it's taken so long. One of the upsides in it taking so long, it's given our advisers time to come to terms, get their head around, prepare us to help them and support them, prepare for this new world.

So they've all done online training. They've all done God knows how many webinars and support sessions. So they're all prepared for what needs to -- or what is about -- what they're about to embark upon. And from earlier this month, we have been making available to our advisers for them to make available to clients, if clients wish it, dual illustrations. So they're effectively beginning to talk to clients in that new world during the course of the back half of July and will be throughout the course of August along that way.

So that, I think, will also just give the advisers an opportunity to actually road-test and -- what they've learned and engage with clients ahead of it actually going live because all these kind of things generally, especially a pension transfer or an investment bond, these things are weeks, months in the making, in conversations and discussions with clients.

So don't expect there to be a major shift. I think we will see August being very slow just by virtue of what it is by virtue of holidays. When we move into September, that's normally everybody coming back, and they'll come back in the new element that if you're looking to consolidate your pension, if you're looking to invest wisely, you'll be continuing these conversations with your adviser, there shouldn't be a major dislocation. Hopefully, those aren't famous last words.

Caroline, for you, on BSP, please.

Yes. Ben, as you know, we have got a small number of investments across the partnership. We've used them when there's been -- sort of facilitating succession where we're confident it's a good use of shareholder capital. And we're going to take this philosophy going forward. We're open-minded as part of some succession to take stakes, but we've done nothing in the first half of the year. And look, it's not going to be a major sort of significant part of my capital allocation policy, but we're open-minded.

We now have Charles Bendit with Rothschild & Co Redburn.

I had one on the upcoming fee structure change and another on performance. So first of all, I think adviser economics are improving as part of this change, from 50 basis points ongoing to 55 basis points ongoing. How does that stack up versus what advisers can make elsewhere? And how much of a difference do you think that might make to SJP's appeal to new advisers? And as a follow-up, longer term, do you think the portion of the 80 basis points advice fee might shift further in favor of advisers? Or do you think that's now set?

And then my second question is on performance. I think the fee structure change is going to have a very positive impact on performance metrics. How important do you think that will be reputation-wise for SJP?

Charles, thank you very much indeed. On the adviser ongoing advice component, you are right, it has gone from 50 bps to 55 bps. I don't plan on changing that apportionment anytime soon. I think we need to get into the new world, see how everything settles down in that regard. I think the element of the overall fee structure that we are coming out with is very much in line with what I think we see in the marketplace. It's very, very competitive.

From an adviser perspective, I think there are many reasons advisers come to SJP. The element of the fees they earn is one component. The element of the breadth of the products, the quality of the products, the quality of SJP that stands behind them, the element of the guarantee that we provide for the advice that they provide, the support that we can give the academy and then ultimately the BSP component that Caroline picked up with Ben a short while ago, those are all key components of the proposition for our advisers. And you might expect me to say this, I honestly believe we have the best-quality advisers in the market. We have far more chartered and fellows of financial planning in the market. It's a great, great community of advisers, and they do their clients proud.

So it's across that mix that we think. And the fact that we are now aligning more closely with the market, I think there were some people that we've been interested to try and get them to join SJP for a little while, but they weren't big fans of the early withdrawal charge structure. In light of the new change, we are having conversations with some of them, and some of them are chatting to us about actually what life might be like in the new world and whether they might make a step across. So let's see what happens with that.

Secondly, on performance, you're absolutely right. It will be a significantly positive change. Removing the advice fee and removing the platform fee in the new world will give rise to effectively a reduction in the costs that come off our fees of about 107 bps. So it will be a significant improvement in our relative standing, and I think that will, a, go some ways to improving reputation in the marketplace, but it is important to point out that while investment performance is a very important part of what we provide, what we also provide is the peace of mind through long-term financial planning. The two go hand-in-glove. But the fact that actually we have such strong performance to date and we have now this new headwind -- or this tailwind rather that will come in on our relative performance, we think, will stand us in an exceptionally good stead. So thank you, Charles, for those questions.

Folks, I am conscious that we have -- we have run quite long, and we've got a meeting very shortly with the shareholder. So I was minded to draw stumps there if that's possible. I think we've had questions from everybody at this stage. And if anybody has a second round of questions, please do link up with the IR team.

But just in conclusion from my side, we did say that this year would be another year of heavy lifting for SJP. I'm pleased to say that we're making good progress as we strengthen the business for sustained growth and success. We continue to perform well, delivering a strong outturn for our flows and our financials. So we're a business in good shape. Our direction is clear. We are the home of advice, and we look to the future with confidence.

I look forward to talking to many of you in the coming days. But for now, thank you for your continued support, and good luck with what is a very busy day and busy week. Thank you.

Good morning, and welcome to our 2025 half year results. It's been a very successful first half for St. James's Place. We've delivered double-digit earnings growth and record funds under management, all while making substantial progress on our key programs of work. This performance reflects the strength of our business model, the quality and resilience of our advisers and the continued demand for trusted financial advice.

I'm going to talk through some of the business and financial highlights, then Caroline will cover the financials in more detail. I'll then update you about our priorities as we look to the second half and beyond. So let's begin with the strong first half we've just delivered. It was a period where the backdrop for consumers continued to be complex and evolve. More positively, mortgage rates are coming down rather than going up and interest rates are expected to trend lower over time.

On the other hand, we're seeing sluggish economic growth across major economies. Stock markets have been volatile, consumer confidence is fragile and geopolitical tension has been on the rise. Putting all this together, it's a tricky environment for a U.K. consumer. How can they plan with confidence when there's so much uncertainty? The answer for many is holistic financial advice, delivered by a trusted, highly qualified professional financial adviser with whom they have a long relationship.

Advisers can help their clients navigate a sea of uncertainty and make sense of markets. They help them block out the noise and encourage the right long-term behaviors to guide them on the way to financial freedom and flexibility. And they help their clients to stay in control of their financial affairs and remain well informed as pensions and saving landscapes shift over time. I believe it is a great time to be a financial adviser, one where they can really bring their expertise and experience to bear and add value to clients.

It's against this backdrop that we've achieved a strong first half for new business. Our advisers have been highly engaged with their clients, both in the run-up to tax year-end and beyond. Activity levels remain high ahead of what is seasonally a quieter summer period. During the first half, we attracted GBP 10.5 billion of new client investments as we sustained momentum, which built across 2024. Gross inflows were higher across all wrappers and reflected an increase in both case volumes and case size compared to the first half of 2024.

Now we should be careful about reading too much into short-term trends, but investment bonds have become a feature in more retirement planning conversations of late, given proposed changes to inheritance tax treatment on defined contribution pensions. This will have contributed to the improved flows we're seeing into this wrapper. Retention remains high at 95.3% and reflects a modest improvement in surrender rates versus the same period last year. This resulted in net inflows of GBP 3.8 billion for the half, double the net inflows we saw in the first half of 2024.

Achieving sustained net inflows has long been a hallmark of our business. But very important, too, is delivering positive long-term investment returns for our clients. So while there was heightened market volatility during the first half of the year, the importance we place on building diversified investment portfolios served clients well and contributed to positive returns that compare favorably against peers.

Combining investment returns with another period of net inflows, we now manage a record GBP 198.5 billion of client investments. A strong new business outturn has been mirrored in a strong financial result for the first half. We've delivered an underlying cash result of GBP 240.4 million, which is 17% up on the prior year, notwithstanding incurring additional charge structure implementation costs this half. Caroline will walk through the detail behind the cash results shortly. So another period of flows and financial performance that highlights the quality of our business and the fantastic service our professional advisers provide for clients.

This puts us in excellent shape as we continue to deliver change that will set us up for sustained growth and success going forward. I'll turn now to updating you with the progress we're making on each of our major programs of work, beginning with how we're implementing simple and more comparable charges. I'm pleased to say that we are in the final stages of implementing this work. We expect the new structure to be in place within a month from today.

The new charging structure will make clearer the value of our proposition, which has led through the value of personal advice that our professional advisers deliver day in and day out for clients. It will also help us to tell a clearer story around our investment performance for clients. Importantly, our new charging structure will enable us to unlock how we can develop our business and client proposition going forward. In the near term, this means being able to develop a new Polaris range of multi-index funds that we plan to launch later this year, subject to regulatory approval.

I'll talk a little bit more about Polaris Multi-Index in the second part of my presentation. Returning to implementation, we have informed clients of the forthcoming changes to their charges. We are fine-tuning and testing the final aspects of our IT infrastructure build and the partnership are primed and ready for the change. We remain on track for delivery in line with our plans and look forward to getting the job done.

So turning to our second key program of work, namely addressing the historic client service evidencing gaps. Back in February, we highlighted that we would take into consideration new industry guidance issued by the FCA around ongoing financial advice services as we progressed our work. Having engaged extensively with the FCA since then, we have now revised our approach to ongoing servicing and therefore, revised our redress methodology, bringing us into better alignment with the new industry guidance and, of course, our experience from the project to date.

This revised redress methodology has led to an GBP 84.5 million release from the ongoing service evidence provision. After tax, this release equates to GBP 63.4 million, which we will be returning to shareholders in full through an additional share buyback. Caroline will provide more information on this later. We said from the outset that this is a very significant exercise that would take the best part of 2 to 3 years to complete. We look forward to accelerating progress in the second half of this year as we embed our revised approach at scale.

Our third key program of work relates to delivering our cost and efficiency program. Now this will create additional capacity to invest in our strategic initiatives and enhance operating leverage as we grow in scale. We've made good progress in this work, including completing the implementation of most of our organizational redesign. Caroline will expand on this program and the other activities we are focusing on to achieve our planned cost savings going forward.

So to summarize, it's been a strong first half for SJP, one where we've delivered excellent new business and financial results and made further progress to position the business for sustained growth and success.

I'll now hand over to Caroline to talk through our financial results in more detail before I return to talk about the future.

Thanks, Mark, and good morning, everyone. I'm delighted to present a strong set of financials for the first half of 2025, which you can see on the slide. I'm going to start off today by providing detail on our financial performance for the period, taking you through our cash results and the strength of our balance sheet. I'll then set out the financial impact of our key programs that Mark spoke about earlier.

And finally, I'll cover shareholder returns for the period. As usual, I'm not going to cover IFRS or EEV, but information about these metrics can be found in the appendix to the slide deck. So let's start by taking you through our cash result. This is a post-tax metric. The numbers I will quote as I take you through it, are also post tax. We are pleased to have delivered an underlying cash result of GBP 240.4 million for the period, which is an increase of 17% on the first half of 2024.

This is despite incurring additional charge structure implementation costs compared to the same period last year. There were three key drivers of this strong result. First, an increase in average mature FUM; second, an increase in margin arising from new business; and third, our continued focus on cost management. So first, funds under management, which I'll refer to as FUM, has increased to a record GBP 198.5 billion as at 30th of June.

Despite market volatility, this increase drove average mature FUM up 13% on the same period last year and resulted in net income from FUM also being up 13% at GBP 366.1 million. This result is within our guidance range of 54 to 56 basis points on mature FUM, excluding Asia and DFM. For those of you who are less familiar with our financial business model, when I refer to mature FUM, what I mean is the portion of our total FUM, which is subject to annual product management charges.

These charges are our key profit driver. But under our current charging structure, they are not taken for the first 6 years after investment for most investment bond and pensions business. Whilst this FUM is in its first 6 years with us, we refer to it as gestation FUM. Gestation FUM does not yet contribute to the net income from FUM line in the cash result. However, as we have high levels of retention, we know that the vast majority of it will stay with us for the long term, which provides a high degree of visibility over future growth in income.

To bring this to life, once the GBP 51.1 billion of gestation FUM of 30th of June is fully mature by 2031, it could contribute in the region of GBP 300 million of additional income to the cash result every year, and this is without incurring any additional costs. From the point our new charging structure is in place, we will benefit from all charges applying from the day that a new investment is made. We will not have to wait 6 years for new investment bond and pension business to contribute recurring income to the cash result.

This means there will be no new inflows to the gestation FUM balance post implementation. As previously guided, we expect the margin we earn on mature FUM to reduce to 43 to 45 basis points under our new charging structure. As usual, you can find a summary of all our guidance in the appendix to the slide deck, which also contains a reminder of what our new charging structure will look like.

Whilst the margin range will reduce upon implementation, it will apply to an increasing proportion of FUM over time. This is because all new business under the new structure will immediately flow into mature FUM and the remaining gestation FUM will mature over the next 6 years. Together, these dynamics build a powerful picture of how our income can develop and compound in the medium term.

As already guided, following the expected dip in profitability post implementation in 2025 and 2026, we anticipate that the cash result will accelerate from 2027 onwards. This supports our ambition to double the underlying cash result from 2023 to 2030. The second key driver behind our strong underlying cash results is the margin arising from new business. This has increased by 40% to GBP 75.4 million, and it represents the initial charges on new business less the payment of directly associated costs, such as initial advice fees paid to partners and third-party administration costs.

The margin increase is predominantly driven by higher new business period-on-period. As a reminder, this line in our cash result will be negligible following the implementation of our new charging structure as initial product charges are removed. Again, this is in line with the previous guidance. Third and finally, we've continued our focus on cost management. For the first half, controllable expenses have increased by 7% on the same period last year to GBP 155 million. But it's important to note that this is due to phasing of expenses between the first and second half of the year only.

Our guidance to contain growth in controllable expenses to 5% for the full year remains. Our underlying cash result excludes items which are one-off in nature. And so it excludes the GBP 63.4 million post-tax release from the Ongoing Service Evidence provision following the implementation of our revised redress methodology. This is included in our cash result, which was GBP 299.2 million for the period.

As the creation of the provision was a key driver in reducing returns to shareholders. The Board has decided that the GBP 63.4 million release will be returned to shareholders in full via a share buyback program. Our remaining Ongoing Service Evidence provision stands at GBP 320 million at the end of June. More information on the other lines within our cash result can be found in the appendix.

I'll now take you through the strength of our balance sheet. As I said before, we hold assets to fully match our liabilities to clients, and we take a prudent approach to investing shareholder funds. This results in a resilient capital position capable of meeting liabilities even during adverse market conditions. The key risk for our business is operational. To keep things simple, we choose to manage capital by holding a management solvency buffer or MSB, on top of the assets we hold to match client liabilities.

Of course, we also ensure the capital we hold under this method meets the requirements of the Solvency II regime. At 30th of June, our MSB was GBP 575.9 million, and we held shareholder net assets over and above the value of our MSB of GBP 966.3 million. Most of this reflects investment to support the business and is relatively illiquid in nature, such as business loans to partners and the operational readiness prepayment asset.

We run the group in a capital-efficient manner and return excess capital to shareholders, subject to having liquidity and IFRS retained earnings capacity. The group operates with substantial liquid balances, but it's worth noting that much of this is already set aside for working capital requirements, including policyholder tax, funding for the Ongoing Service Evidence provision and to cover our MSB.

Moving on to our key programs of work. I've already covered the financial aspects of our historic Ongoing Service Evidence review. So now I'll cover the other two, starting with our new charging structure. Implementation costs of this significant project were GBP 38.1 million post tax in the first half, bringing the total spend recognized across the project to date to GBP 104.8 million. As we're near implementation towards the end of August, we are confident the overall cost of the program will be in line with the guidance we gave in February this year, which is towards the upper end of our original guidance range of GBP 105 million to GBP 120 million post tax.

The remaining implementation costs will be recognized in the second half of the year with no further cost to come in 2026. Our cost and efficiency program is progressing well, and we're on track to deliver it by 2027 as planned. The organizational redesign, which Mark spoke about earlier, is a significant project in itself, involving mapping out how we should be organized across the business to align to our strategic priorities and drive future growth.

We've completed most of the work to implement the new design and made headway in a number of other areas. These include optimizing our commercial relationships with suppliers and rationalizing our property footprint. We expect to deliver the program in line with the guidance we provided this time last year. As expected, the program has had no material impact on our half year 2025 results as cost to achieve and reinvestment spend have broadly offset the savings we've made during the period.

We anticipate this will remain the case for the full year 2025 and 2026, again, in line with previous guidance. Finally, I'm going to cover shareholder returns, which were key components in our capital allocation framework, which is included in the appendix. Under our current guidance, which covers the financial years, 2025 and 2026, we expect to return 50% of the full year underlying cash result to shareholders. This is structured as GBP 0.18 per share in annual dividends with the balance distributed through share buybacks.

For 2025, the Board has declared an interim dividend of GBP 0.06 per share, which equates to GBP 32.1 million and an interim share buyback of the same amount. In addition to this interim share buyback, as I set out earlier, we'll also be buying back GBP 63.4 million of shares as we return the post-tax amount released from our Ongoing Service Evidence provision to shareholders. Together, this means the total buyback, which will commence in August, will be GBP 95.5 million.

And so to conclude, as I said at the outset, we've delivered strong financial results for the first half of 2025 with our underlying cash result growing by 17% on the same period last year. Whilst our new charging structure will drive the expected dip in profitability for the remainder of 2025 and 2026 after it's implemented, we have a high degree of visibility in compounding earnings going forward. This gives us confidence in our ambition to double the underlying cash result from 2023 to 2030.

With that, I'll hand back to Mark.

Thank you, Caroline, for walking us through another strong financial outcome. In a moment, I will talk about our near-term priorities. But before I do that, I want to restate the opportunity for great financial advice-led businesses. You have heard us talk about the GBP 3.3 trillion in liquid investable assets in the U.K. and now the scale of this addressable market is set to grow. But there's increasing recognition that much of this collective wealth is not working hard enough for consumers.

The FCA recently estimated that over 7 million people hold more than GBP 10,000 in cash. Now holding cash is no bad thing. A rainy day fund is the cornerstone of any sound financial plan. But the real question is, are people saving too much and investing too little. The need to address this is urgent. According to Scottish Widows, 38% of people aren't on track for even a minimum retirement lifestyle. Our own research shows that nearly one in five expect to rely solely on the state pension. Those are stark statistics.

And this is where trusted financial advice makes a meaningful difference, helping clients build long-term plans, navigate uncertainty and crucially giving them the confidence to invest. Now it's telling that nearly half those with a financial plan prioritize retirement savings each month compared to just 1/4 of those without. That's the value of advice and why over 1 million clients have chosen SJP.

But holistic financial advice is about far more than investment returns. It's about maximizing tax efficiency, instilling positive investment behaviors and navigating the complexity of intergenerational wealth planning. And just as importantly, it provides peace of mind, confidence and long-term relationships built on trust. But we recognize the full financial advice won't be right for everyone. Those with simpler financial needs or lower investable wealth may need different support.

So that's why we back initiatives that help all consumers make better financial decisions from the FCA's Advice Guidance Boundary review to the Investment Association-led campaign to promote retail investing. As the U.K.'s largest wealth management and financial advice business, we're committed to shaping a marketplace where consumers have greater control and confidence in their financial lives. Beyond delivering good outcomes for our clients, our right to win is dependent on delivering on the strategic ambitions we have already set out.

As I highlighted this time last year, this means we must first strengthen our foundations, so we have the right basis from which we can then amplify and fully capitalize on the exciting market opportunity ahead. Making progress against our three key programs, therefore, remains a key near-term priority. I want these programs completed and in the rearview mirror, so we can move forward with pace and purpose. We must continue to deliver on the strategy we set out a year ago.

At this stage, this is mainly about strengthening our business. So in the second half of this year, we plan to build on our work around simplification and standardization, particularly around administration linked to advice processes and new business submission. Some of this will be exploring tactical improvements. For example, we're considering how we can automate processes to create ongoing advice suitability letters to improve service and free up adviser time.

The scope of some of this work to simplify and standardize could be transformational for some of our processes, for example, in reviewing and enhancing our business submission and our approach to payments. Where we can, we will also press ahead and accelerate some of our work for the Amplify phase. Now I spoke earlier about the launch of Polaris Multi-Index, which is planned for late 2025, subject to regulatory approval.

This is an initiative I'm really excited about as this will leverage our expertise in active asset allocation while giving clients access to index-tracking funds. This will add further choice for our clients and provide us with the opportunity to manage pockets of wealth that might be set outside of SJP today. We'll provide more detail on this once we have regulatory approval. I look forward to talking about the other aspects of our Amplify agenda at the time of our full year results in February.

Arguably, the most important priority is to keep focus on delivering to the level of service that clients and our advisers expect from us. This means we must keep doing things like ensuring that our academy program remains best-in-class for those who want to become professional, highly-qualified financial advisers.

It means working to support the partnership with a market-leading adviser proposition, and it means working hard to deliver great client experiences day in and day out, supporting the realization of clients' financial aspirations and helping our advisers to grow and develop their businesses further.

So to summarize, the first half of 2025 has been a very successful period for the business. We've delivered strong new business flows, record funds under management and double-digit earnings growth, and we're setting SJP up for sustained growth and success. The changes we're making will ensure we are best placed to continue to capitalize on the compelling market opportunity in U.K. wealth management, where the demand and need for financial advice is growing.

We are the scale operator and the home of financial advice in the U.K. We're privileged that over 1 million clients are already securing their long-term financial futures through the power of SJP's professional advisers, and we're driven by a desire to help more people achieve this. We've got a proven track record of delivering growth through all stages of the market cycle. And we expect to see this translate to strong compound earnings growth as we achieve scale operating leverage.

As we continue to invest in our capabilities and adapt to an evolving market environment, we remain confident in our ability to deliver sustainable returns and create long-term value for the shareholders. Thank you for listening, and do please tune in for our live Q&A, which will kick off at 8:00 a.m.