St. James Aktie

Hello, and welcome to St. James' Place 2026 Half Year Results Q&A session. My name is Carla, and I will be coordinating your call today. [Operator Instructions].

I would now like to hand you over to your host, Mark FitzPatrick.

Thank you, and good morning, everyone, and thank you for joining us. Before we open for questions, a few brief opening remarks from me. Firstly, I'm very pleased that we've achieved a strong set of results for the first half. Good operating and financial performance, continued strategic progress and further growth in both our client and adviser base. We delivered positive net inflows of GBP 2.7 billion, grew funds under management to a record GBP 240.8 billion and continued to see strong engagement between clients and advisers. These outcomes reflect the enduring demand for trusted financial advice and the strength of our advice-led model. We also continue to make good progress on our strategic journey. Over the last few years, we are focused on strengthening and simplifying the business through a series of major programs.

During the period, we made substantial progress in our historic ongoing service evidence review. And this has enabled a further provision release, which we will be returning in full to shareholders through a buyback. Alongside all of this, we continue to strengthen both our client and adviser proposition invest in technology and productivity tools and enhance the pay and benefits and support available to advisers across the partnership. Looking ahead, we remain confident in the long-term outlook for financial advice in the U.K. The advice market remains underpenetrated, client needs to becoming ever more complex and the value of trusted advice continues to grow.

As we move through the latter stages of the spending phase of our strategy, our focus is increasingly turning towards the opportunities ahead and the transition to amplify. We believe St. James's Place remains the most compelling place in the U.K. to build, grow and realize value from a successful financial advice business. This enables our advisers to deliver the trusted advice service and support our clients value. This leaves us well positioned for the next phase of growth. With that, let's open up for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. And our first question comes from Andrew Lowe with Citi.

I've got two. The first is on your adviser retention rate in the first half. Could you clarify what that was in the first half and how that compares to the 91% retention rate that you saw in 2025. It seems likely to have gone down rather than that, but your adviser numbers are up 0.3% in the first half, and there have been unquantified planned exits from underperforming advisers.

Can we conclude that you're doing more lateral hires from other advice firms or has the gap been bridged by a step-up in the number of advisers graduating from the SJP Academy where presumably day 1 productivity may be lower. So any color there would be great. And then the second question is just on your pass-through of your fees to Europe advisers. There's been a lot of debate on this during the past couple of weeks. And how you have ceased to be retaining more of the adviser fees versus other platforms who seem to be talking about passing through 80% to 85% of the growth fees to their advisers.

So if I take the 25 basis points ongoing advice fee the as a percentage of the 80 basis points that you charge your clients that the or retaining your advisers are keeping 70%. But I'm conscious that there may be further pass-through that we don't see in the financial disclosure. So could you just clarify exactly what your as high the retention is and whether you think that, that figure is like-to-like, [indiscernible], thanks.

Okay, Andy. Thank you. So hitting the topic I expect and we spend a little bit of time on today. I think maybe just some broader comments around the whole element to partner, partner retention in the back and then I will get to those explicit components. Firstly, I think I would say the reality for us every wealth manager around the world is the ebb and flow of advisers. We've seen it for decades in St. James's Place, and it's not particularly [indiscernible].

So our partner retention number is running at 90% at the moment. Last year, it was 91%. So it's a marginal 1% delta which [indiscernible] I think, ends up at about 50 advisers in terms of the difference. So it's very much at the margin in terms of what project. We unfortunately lose advisers to a broad range of firms and many retire or leave the profession. However, we also recruited advisers from a very broad range of forms, including IFS, and we have a phenomenal recruitment team. So the adviser retention levels that we've seen over the course of the first half is -- and additions are a combination of natural highs experienced lateral hires.

We've done that from day 1, as I said, we have a very, very good team. And if anything, we actually we've recently strengthened the team earlier this year, we sent in the team, we bought some additional proton because we initiated back in February, our ambition to be able to see the Pfizer numbers grow from 2027. Therefore, there's normally a bit of a time lag in the pipeline in terms of building up on that. So we've started investing in that piece. And the other component is the Academy. And the academy over the first half of this year has been very, very busy.

We're seeing good numbers coming through in terms of graduation and we're seeing great demand for advice and a real positive reaction to our campaign of trying to encourage more women into the advice profession. So we've been active in that regard and we're seeing real pick up in interest in that for the longer term. But over the course of the last 6 months, the Academy has actually contributed significantly in terms of our advisory numbers. In terms of the broader pass-through component, again, just a little bit of color and context. We set out as part of our strategy in 2 that 1 of our key pillars is having the leading and file offering.

And we want to make sure the St. James' Place is the best place for the best advisers to join developing and build a successful Korean business and we are laser focused on this. Also that the vast majority of our investments of over GBP 250 million over the next few years is focused on improving our offering for advisers and in space. Now no one else in the market is investing in anywhere near the scale. And we think that's also why we have nearly 20% of the U.K. advisers within St. James's Place and nearly half of all new advisers to the profession come through our category. Now remuneration is of adviser pays one of the components of effectively the offering that we have to advise us.

There are so many other components to it. But to answer your question directly, the partner elements that advisers retain of the advice fees we pay. It's about 80%. And I think the figure that's a lot higher than the many folks assume. So it's -- our focus as an organization as an executive team is on ensuring we have the leading adviser offering, ensuring we continue to retain, attract, grow our adviser base because we see the total addressable market is growing in the U.K. There is a huge opportunity. Our growth algorithm, we think factors on two key components, one of which is productivity increases, and we're going to continue to stay focused on that, supporting our advisers in that regard.

And the second is adviser numbers. So we're focused on both, and we expect to be able to deliver both over the medium term. So hopefully, that answers your question. Maybe a little bit more fulsome, but hopefully, it just gives everyone a bit of sense of the broader color on how we're focusing on these matters.

Thank you, and the next question comes from Nasib Ahmed with UBS.

Maybe I just want to follow up on the two parts that you just made, Mark. Can you give us the numbers? So you've basically hired 500 advisers. What's the split between Academy hires and Natural hires to the 50-50, 300, 200?

And then on the 80% retained by advisers, I mean, it's hard to get the math. I mean, you've given us the number, but can you -- another way of asking the question would be the 25 basis points that you retained, how much of that is actually resumed in helping advisers on business rates interment insurance, et cetera, right? So just trying to see the 25 basis points or emerging how much of that are you retaining net of costs for advice.

And then on Slide 24, you showed at kind of the EY chart, which is helpful. Quilter have a similar chart and they've got 1.56% on the 10-year basis with a $500,000 part instead of the 100,000 parts. So they don't seem to be on the chart, so I don't know what I'm missing there. I don't know if you can comment on that?

So I'll ask Caroline to give a little bit more color on the element of the 80% and how that is how that's come part. On the chart, I think we've got 16 competitors. I don't think we named them, et cetera, set out who they are. I would expect them to be -- to have all the usual suspects in them on that way. So I can't comment on what others have done and how they have compiled their numbers. On the element to the breakdown of the adviser numbers, we're not looking to kind of give granularity on the category or the recruitment element in terms of specific numbers other than to say, I think both play an active role.

And the ratios shift and change broadly over the course of the years within a fairly tight corridor. So we haven't seen anything majorly change in that regard. But we are looking at that, and we are looking to spend more in the academy in terms of increasing the number of cohorts that we have going in. So over the fullness of time, we'd expect to have more people coming in through the academy.

In addition, we'd also expect to have more natural higher. We think that the new fee structure that we set out in and we've pivoted to in -- from August last year actually means that there are surprises we previously weren't necessarily fans of the old regime in the marketplace who would now be receptive to a conversation with St. James's Place. And then finally, I'm also very confident of the fact that there's been a lot of consolidation, a lot of movement around the market. and not be advised, that's been subject to some of those acquisitions are thrilled by those. So there's an opportunity for us to be able to lift out a few advisers on some of those organizations.

So we're spending considerable time and energy around that. So I think it's fair to say that as a team, we are very focused on retention, we are very focused on acquisition, and we're very focused on creating a long-term pipeline full of profession through the academy. Caroline, do you want to give a little bit of extra color on the [indiscernible]?

Yes. Yes. So if we look at the 80%, you have to consider, obviously, together all the initial and ongoing advice that we paid to partners plus the allowances we give them so we paid out 2/3 of initial advice charges to advisers. This one increased substantially all in toward [indiscernible] you add the other allowances we paid to the partnership. So that's consistent with what you said under our new charging structure the sort of new business makes minimal profit. When you add in the amount we pay on an ongoing basis, there's two elements to this. There's obviously the 55 out of 80 basis points under the new charging structure. But then you've also got under the old charging structure advisers got all the ongoing pipes. So it's a combination rather than specifically picking out any of the specific costs. So you have to take all that together in

And once you're off gestation, can you just confirm that your -- that 80% become 75% or greater than 75%?

[indiscernible]

So you're paying out 100% on all of the firm that's in gestation, but once that runs off and, let's say, 2022, that 80% becomes 75%?

It reduces not [indiscernible] uses a little bit, yes.

Thank you. And the next question comes from Andrew Crean Red Autonomous.

Three questions, if I can. Caroline, on slide 8 you make the point that results were lower in the first half of 25% because of the lower initial ongoing margins. Then you say whether this affect to full year 2026 will depend on how markets develop in the second half. I just wanted to explore the implications of that. If markets are normal, is the implication of what you're saying that the second half profit will be higher than the second half. That's the first question.

Second and third question is just can you update us a bit more on the high net worth initiative and also on the Flagstone cash transmission if I'm transferring cash now from Flagstone into a state, how long will it take me?

Perfect. All right. Well, why don't I start with the high net worth piece and the Flagstone and then Caroline can pick up on the second piece. So [indiscernible] will continue to be part of part of our strategy over the course of the last 6 months, we got a dedicated high net worth program and leadership team. have begun a significant increase in high-quality private client events to be able to deepen engagement with expanding our sensor adviser support to enhance the servicing upon it worth.

We've launched a pilot highlight work training program with one of the largest practices paving the way for a broader rollout next year. increasing the volumes of high-quality practices serving the complex high net worth client. So the high net worth component continues to be a very important aspect. And I think our investment in this area and the energy and commitment of resources, we think will deliver more consistent and somewhat differentiated high net worth experience.

In terms of Flagstone, so in the second half of this year, we are expecting to dramatically change, and we're working closely with an on dramatically changing the length of time it takes to move money from Flagstone into St. James's Place. So I would expect we'll be able to report that, that is all done and dusted when we chat you again. It's a key component of the engagement with Blackstone. In the meanwhile, with Blackstone, what they've done is they've massively facilitated take on procedures. So most of the information is now as auto populated from across from St. James's Place. And the rate that time for getting has been -- has improved the level at which clients invest has been lowered a bit to make it more accessible. And we're seeing an increase, I think it's just GBP 5.9 billion between the team, yes? GBP 5.9 billion now in Blackstone. So a meaningful increase clearly, just talking about clients in the markets generally, in U.K. markets, confidence in global economy and the uncertainty and wishing to have some in cash in.

This is an incredibly effective and efficient way of being able to get your cash to work a little bit. But ultimately, as we all know on this call, the U.K. has a broader issue and that people are overinvesting and underinvested. So at least through Blackstone, our advisers have got visibility of [indiscernible] and as part of the general engagement with clients are exploring the size of scale of what's in Blackstone and what possibly could be -- should be invested because the opportunity cost of being in cash versus being in the market. is quite significant, as I'm sure you're aware. Caroline?

Yes. Thank you, Andrew. Yes, look, I think I'm actually not sure what the normal market is any more or actually some. But so I can put that aside, we think it's something normal second half of the year, yes, we would expect will be the half 2 '26 profits will be higher than half 225 profit. But I said, it all depends on the market.

Thank you. And our next question comes from David McCann with Deutsche Bank.

Two things, please. The first one to follow up on the adviser retention piece. Obviously, a few questions had already about the split of shareholder and adviser economics, but I just want to drill into that a bit more. Obviously, you question really focused on what is the current split? The question really is, do you see this change going forward, given the comment you made about the competitiveness of the market and there's obviously what we're all seeing now adjacent to that point, are you still expecting roughly overall adviser numbers over the whole year?

And then the second question is on flows more generally. It's fair to say they remain at the softer and I think where most people would have to like to see them. Maybe you can drill into why is that the case? What do you think it will take for them to positively inflect? And indeed, do you have any medium-term aspirations of where you like them to be for the business of our size.

David, thank you. In terms of advisory retention adviser numbers just generally, I think, as I said at the end earlier on, the element of advisers and our leading advice offering is fundamental to who we are as an organization. So we are laser-focused on ensuring that we have the very best offering to advisers in the round. So when we talk to partners, advisers about why they join us, why they stay with us, they tell us the academies are so valuable to them. the element of really joining a community.

They been alone isolated their part is so much bigger, longer in technical support, training, advice, et cetera, we also have the highest concentration of financial -- chartered financial planners in the U.K. So it's another way of saying we have the highest quality financial advisers, the unique investment management approach, the BSP program kind of growth and succession component. We also guarantee our advisers advice, which is really important for the advisers and their clients, gives them great confidence and a massive recognizable and supported brand all of those components are part and parcel of what the leading adviser offering component is. And we will ensure that we continue to have a leading adviser offering.

So we're constantly looking at it, constantly looking to see what we need to do to ensure that we are providing the best all-around offering. Part of that is around the element of how we support around technology and how we make the overall profitability of our advisers and partners businesses better. So the element of how we do more for them, how we facilitate how we support them will continue to be really, really important. As for advice numbers going forward, I think our ambition would be that we would look to see kind of numbers flattish as we said at the beginning of the year.

And in 2027, would look to be seeing great kicking off again in terms of either numbers based on the elements I mentioned earlier this morning around the fact that we have invested further in the Academy, and we've invested further in our recruitment team and all of these by efficient have got an element of a lead time so [indiscernible] to come through later this year, early next year. in terms of their contribution of that investment. Caroline, do you want to comment on the first, please?

Yes, absolutely. Thanks, David. So look, if I take the flows apart into the component parts. I mean if you take the gross flows, we attracted GBP 10.5 billion of gross loans for the half, which is consistent with our record results, which we achieved in half 1 2025. So and that's despite the sort of heightened macroeconomic and sort of geopolitical uncertainty during the period. So we're happy with that, but advisers a bid case volumes are up 9% on H1 2025, okay, size down a little bit about the same amount.

So that I mean outflows in absolute terms are up because that's given the strong sort of fund growth. So average fund in H1 2020 was up 18% on the previous half but our flow for increased by 16%. So our retention rate for the half was 95.4%, up from 95.3% in last year, so it's above our 95% ambition. And total outlets also fail period-on-period from 6.9% of average fund last year to 6.7% this year in half 1. So that's a little bit. But then if you come to net flows, which we know is obviously the sum of the 2, with average funds higher, 8% higher than the year ago, it was obviously a really good result for our clients. We're pleased with that, but inflows don't scale at the same extent as out which generally increase with band.

So this one has been obviously reflected in our net flows. But they are in the 2% to 3% if, which is sort of our expectations right now. So that's good. But I think as you go forward, to your point going forward, obviously, there are 2 factors we look at here Obviously, partner numbers and adviser numbers and obviously productivity we're switching our tension Academy and [indiscernible] invested into. And also we're batting to amplify we're continuing our work and increasing our work on the products that you work with in Amplify. So what I would say is the 2% to 3% is definitely not a cap.

And the next question comes from Christiane Hostein with Bank of America.

My first question just following on from the discussion on adviser attention, sorry. So I wanted to ask, there's been a lot of media speculation about a potential exit from volatile practices [indiscernible]. I was just wondering if you're able to provide an update here and whether they've actually provided notice to leave. And then how do you also intend to retain advisers and some in the event of a practice or partnership leading.

My second question is relating to AI. So I was just wondering how you think about shared economies of scale from your productivity benefits relating to AI? And how do you also intend on reinforcing your large-scale advantages versus peers? And then I just had a follow-up question as well on net flow expectations. So you were talking about how you've done quite a bit in terms of the Academy and improving productivity. Pricing is obviously not lower now remediation is pretty much behind. So in terms of accelerating this 2% to 3% net flows, given it seems like a lot of the building blocks are in place, how long until you expect to see this start to improve? And yes, what are your expectations there for the more medium term?

Okay. A nice cross section of questions, Christiane. So firstly, unsurprisingly, we're going to comment on an individual partner business within St. James' don't monopoly understand the reasons for that along that. I think just a couple of things just to remind or maybe inform people about Firstly, when an adviser lease. And as we say, it is normal that we will lose some and would much rather not lose advisers, but we understand everybody's got the right personal reasons for all that. It doesn't mean that the clients -- and the clients often find that actually what they have with St. James's Place is incredibly attractive for all the reasons that I've set out earlier in terms of investment performance, in terms of service in terms of support, in terms of the brand, the advice guarantee, all these different components.

They really match it to clients. And so we generally find that we retain on average, on a 50% of client fund. Now another key component is that when a partner that has multiple advisers and a practice leaves we do have those as well. And as I said, we don't get a triad encourage that, but we even much rather than to say. But if they do go, we tend to retain at least 50% of their advices. That's just what the factor. So the element of -- there is some location, there is kind of time and attention that needs to be spent with much rather than not have it. but it's not an immediate flow that if somebody leaves all their business leaves with it.

And that, I think, just talks to the testimony of the strength the relationship we have with multiple partners and advisers and with clients as well and what it is at Capital. On the question of AI and technology and thank you for the question. Share scale of economics and the economies of scale is like scale benefits for us really coming through in a few ways. One is in terms of our ability with fund managers to be able to expect greater margins. And unfortunately, you and others on the call will be just generally seeing that across the sector. Two is an element of -- because of our size and scale, most of the big global IT brands work with us, talk to us.

And because of our scale, we can negotiate very good prices for either ourselves or for and for the partners and advisers making sure that they pay well below rack rate for any of the kits that they use or that they need, whether it be conventional technology or whether it be some of the newer AI capabilities and technologies. And effectively, the scale benefits we look to put back into the business. So the scale benefits and just general kind of efficiencies are part and parcel of how we've been able to pay for and fund the elements of the changes we made to the fees that we're paying to the advisers from later this year and for next year.

It also going forward, I think, will be how we will look to reinvest back into the business in terms of technology because the pace of technology is constantly evolving. It truly is exponential, not linear. And therefore, I think how we continue to evolve our technology stack and how we continue to ensure that advisers get the most streamlined process as possible is going to be really, really important because ultimately, what advisers love doing is being in front of their clients.

The admin piece is generally speaking an avid around the world. That's not what they do what they do. So wherever we can, minimize that component, maximize the opportunities as bending front of clients because that's where the buzz. That's where the gene. That's where the rush comes from. So that's the piece that we are really laser-focused on. We have mapped out the client journey. We've mapped out the Pfizer journey. We understand where the pain points are. And one by one, we are knocking these on the head to give the advisers more time greater efficiency and greater ability to improve. And part of the pilots that we've been running have shown increases in new client acquisition for those parts of the business that have been part of the pilot.

We've seen some of the smaller tractors where they're using some of the AI, a significant uptick in terms of client numbers and a significant increase in terms of productivity. So as we roll these new technology and capabilities out throughout the partnership. And then as we help them optimize that technology into their processes into their systems, we'd expect to see the advisers being able to do more and actually be able to support their profitability at one of the earlier points. And then on the net flows expectations, one of the things that we have tracking quite carefully is to partner productivity.

And partner adviser productivity, we have seen from a case count increased quite significantly. So last year was a very busy year. We all know it was a vacancy. It was a very busy year. And last year -- first half last year and first half this year, we've seen a 9% increase in the number of cases that advisers are talking to clients about and engaging with Platform. The case size is down 10%. And largely, I think that's a function of the confidence in the economy. And we're seeing a lot more in Flagstone as we mentioned earlier, talking to induce answering this question. So we do think that actually the advisers are very busy.

When I talk to them, they tell me how focused they are on what they're doing and how they're growing their practice, and how they're looking for new advisers and how they really feel they're making a difference in society. And to me, that's why I'm here because I want to facilitate and enable more of that because what we do, what our advisers do matters. It's really important that helps people's life. So no expectations over the medium term, I would expect them to start pushing through the 3% level. On the basis, again, we need to be very alive to what happens in the economy, what's happening with confidence, et cetera. Because we don't operate in a vacuum. But we are moving into the amplified phase next year.

The amplified phase is a serious growth rate. You've seen the consensus numbers in terms of the profitability. We're looking to continue investing in the firm. And St. James' Place is very different from what it was a year ago, and it will be very different in a year's time and in 2 years' time. We're getting better and better at what we do.

The next question comes from Ben Bathurst with RBC.

Question on two areas, if I may. Just on the flow outlook and trying to tie that back to some of the adviser growth discussion this morning. I wonder, do you think that the high-profile departures that we will be reading about will be noticeable in the net flow results in 2027 just in terms [indiscernible] or given the movements you're talking about and the sort of the general ebb and flow, should this effectively be a wash given that capacity is expected to be constant and the guidance around growing the adviser numbers next year?

And then just secondly, on the BSP process. Can you provide some color on how that process typically works for larger firms how do you mitigate the complexities setting up larger books of business to help attain those assets? And is that complexity playing any part in any of the higher profile adviser movements that we've been reading about recently.

Thank you for those two questions. I [indiscernible] pick up the BSP process, BSP will report into her. So she's all over it. In terms of net flow results for next year. I think there's going to be so much more safe than necessarily a number of advisers leaving how the economy does, what the government does in terms of any budgets and the like is going to be a real factor and just general consumer confidence, I think, is going to be -- are going to be very relevant. Then if you think of the steps I gave just responded to tens questions on our retention of FUM generally and our retention of advisers when a partner lease with a number of with a number of advisers. That if you get into that world, you effectively say that quite quickly, you're talking more than 25% of the fund that may be at real risk of an outflow.

And as you can imagine, we are very keen to try and retain as much of the -- as many of the clients as possible. We have lots of clients who do so we'll continue to try and can support our clients if they wish to set clients are free to move as advisers are free to move. And therefore, like in your business, every day, the IP walks in and out of the door we need to create an environment to culture, community and environment that people want to be in. And that's where we are. These are focused. That's where our time, energy, as an executive and as a Board is focused on that too.

Yes. No. Thank you for the question, Ben. I am open passion about this area. It's one of our big USPs, and it's a pet fantastic thing we have here. So we are -- we're spending a lot of time and energy and efforts on this. The short answer is no, it doesn't -- it isn't a problem for larger practices. We were growing hard. We're doing management buyers, management buyout, employee ownership trust. We have a succession consulting team. We've set up that now works with businesses like the real world, if we have time to work with people, we can do basically anything we can work with teams on any of those measures. We've got a great corporate finance team. We've got great relationship with our lenders. We've got a lot of people who can work through the different problems that come with larger businesses.

But to give you some real-life examples, in the first half, we did our biggest BSP ever, which sold one of our top 10 businesses into another one. So that's the biggest one we've done. And also, we've also half, we had a smaller business buying a business, and I think it was about 3x bigger than it. So we're also helping a new businesses. You can have things like that. So absolutely not. I mean, I think the bigger they are, the more time it takes. But we have all the people, the funding and the ability to do that. So it's exciting times, and we'll continue to evolve our position.

And just a bit of you, just a little bit of [indiscernible] on my response to your first question as well, is feedback from an the partners of the back of the announcements on Friday last week, have been incredibly positive. And partners and advisers up and down the country, saying that they plan on using the catch-up payments that we will pay them in March next year to invest back into the business in terms of capability, in terms of advisers, in terms of growing their business.

So there's a real confidence in the partnership in terms of growth. And every quarter, we are releasing new and improved technology and elements, which are giving people and giving our partners and advisers greater confidence in our ability to get things done so that we can progress and need to make their lives easier. So all of that should support the earlier message that I gave as well. But thank you for those questions. That's the answer.

And the next question comes from Gregory Simpson with BNP Tara.

Few questions from my side. Firstly, are you seeing any behavioral changes or different client conversations around pensions, given inheritors tax, the enhances exchanges going in next year. Just where it's a big part of your flow base? Second question is I wanted to ask if you did see a pronounced shift into index funds like some other advice businesses have seen in the U.K. how would you see that impacting your net profit margin from FUM.

And then finally, just on that 50% retention rate [indiscernible] advisers that do leave. Just wondering, do you think you can proactively increase that over time to come at a better efforts in [indiscernible].

Thank you. So the world of advice has become more complex because of the inheritance tax changes, which land in April next year. So we are seeing advisers, partners, talking with clients where they have a large pension fund and engaging with them on how they -- and what they might do that might be different from the original plan before the tax rules changed. So there's induct been a degree of a shift I don't want to tell you what necessarily what the shift is because that might be a tantamount to giving you financial advice.

And I've got 5,000 experts who can do that incredibly well. But suffice to say that actually the element for many brokers actually use the pensions in terms of what's been done. In terms of index funds, we have seen an impressive take-up on Polaris multi-index since launch, launched in October last year. It now stands at GBP 4.6 billion. Some of that is new money coming in. Feedback from clients has been overwhelmingly positive. Many clients have been asking for something like this for some time. So it's been great that we've been able to give it to them on that particular patch. The margin, the profitability of [indiscernible] multi-index is appropriate, and we don't feel that it would necessarily be a drag in terms of our margin because there's quite an active asset allocation layer that sits above it.

And then finally, in terms of the 50% retention, let me significantly say that we're not sitting on our hands. We will do and we will engage with advisers, partners, clients to try and make sure they understand the direction of travel that we are taking, what we're doing and why we believe that St. James' is placed as the best place for them to grow and run a business regardless of what competition may or may or may not be offering. So the environment is more competitive. There are -- there's more consolidation happening, and I expect that to be a case. In light of that, we are going to be active in the market as well as we have been for the last 34 years.

I'd just add on that, Greg, on the index, Obviously, it's our fund manager that were the where our cost benefit comes from, we can use our scale advantage and work with their scale advantage, and that's where we get the benefit of the value on those funds.

Okay. Can I just quickly follow up, actually, all the changes around adviser remuneration in the last week or so. Do you see that as being kind of fairly neutral to the that net margin kind of guidance?

Yes. Yes, it's within that, any funding was done within efficiencies we've made within the business margin, the guidance still faster the margin guidance still stands here.

[Operator Instructions]. And our next question comes from Alex Powers with KBW.

Just two questions from my side. Just firstly, a number of funds obviously scaled very successfully on the [indiscernible] train [indiscernible] historically now being poached by consolidators, it feels kind of what you call that consolidated will continue to target these top firms within your business? Just interested to hear you give us any color on kind of conversations you've had with other big partner firms within the SGP network and how you're kind of bonding to this threat.

The second question is just around the kind of size of new partner firm you're looking to bring into the network. Given you lost some large funds, are you looking to replace these kind of like-for-like size firms? Are you happy to add smaller firms at age. Thank you.

I think it's fair to say, Alex, that we have a very active program of engagement with our firms within certain games as place, and we will continue to have fee program. We have a number of consultation groups where we consult with partners and advisers on various matters before we decide on them. So we're trying to do as much as possible with the partnership rather than to the partnership and ensuring that what we do lands well is clearly understood and is really focusing on the things that matter to the partnership. So we have a very active line of dialogue always have, and I expect always will because it's our USP and you look after you protect a new policy of USP.

So we're very, very focused on that piece. In terms of size of flow coming in, we have and have had practices of all the conjection sizes coming in, except along the way. Our existing firms are growing. We have a good smattering of firms that are very large, some that are medium-sized and the lots that are in the smaller element, et cetera. They all share 1 thing in common, which is focused on fine and through that, a real element of growth into the opportunity that's there. So there isn't a particular size of cut that we are looking for. If somebody is excited by the culture, the environment, the community that we create here that we think is very, very different. Then they're very welcome to join us, and we're glad to have them.

Thank you. And our next question comes from Charles John Bendit.

2023 to 2030...

Charles, do you mind starting that again. We missed the beginning of your question, Charles.

Of course, So the first question is you reiterated your confidence in doubling adjusted profits from 23 million to what markets and net flow assumptions from here are now embedded in that doubling assumption? And do you expect to revise that profit target up or down as we get closer to 2030? Or are you going to manage the business so that that's roughly where you end up?

Second question, you talked earlier in this call about your growth algorithm having 2 drivers: productivity and adviser growth. Where do you see that second driver trending over the medium term, noting that it's been a period of relatively slow by the head count growth versus history in the last few years. Just keen to understand where you'd like that to settle long term and whether the Academy and the adviser head count movement in the industry more broadly can support that long-term rate?

And then thirdly, I think you've talked in the past about SS&C as being one of the expenses on FUM. Can you quantify in terms of basis points on FUM, just trying to deconstruct the new simplified expense on fund margin into adviser fees, third-party funds and then other ongoing costs like SS&C?

Okay. All right. Why don't I deal with the second element in terms of the growth algorithm question and then ask Caroline to pick up the first and the third.

So in terms of the growth algorithm, as you said, I mentioned productivity being very, very important and adviser growth also been very important. And we said last year, that actually adviser growth in the short term would slow down as we went through an element of looking at some of the partners where productivity was it low and looking to see what we could do to try and support an increase in terms of activity, which led to some partners leaving and that trickles through in terms of some of the numbers from last year and a little bit of the numbers this year.

I would expect adviser growth to increase to low single-digit growth going forward. I do think that the industry as a whole has been in terms of adviser numbers growing at less than 1% for quite some time. And therefore, the Academy is going to have to do the lion's share of heavy lifting on that because we've been doing the academy for the last 10-plus years, we know what takes. We know what's required. We have a great pipeline of recruiters. We know the type of people we're looking for.

And we think the market is actually very attractive for people to come in and join us. through the element of the economy. So adviser [indiscernible], we think will be real and meaningful. And we think the productivity will also be a very, very important lever for us to pull. And we are focused on both, and we're looking to grow both productivity and adviser growth from '27. Caroline, in terms of the doubling?

Doubling, yes. I mean, look, that's our ambition rather than specific formal guidance. We're saying with that, we have to set that in 2024 when the world was sounding places look out further. We're not going to say going to reiterate that right now and obviously we guide every year. I mean the assumption around that sort of mid- to high single-digit increases in FUM every year. Going back to the normal market. So I think we are -- I would actually say, as I did the vote, it's not a cap, definitely not a cap on our ambition. So but we will obviously guide every year as we go towards that.

On the actual interest or expenses on FUM. When we did our new implication of reporting, we had a lot of debate about how we should do this. And with the simplicity, we don't give that breakdown, we find that both income and expenses obviously vary. We think our daily fund levels, but we pay out such obviously, other than the margin we pay out a significant amount of that. So look, we're just not -- we're not having that. We're not giving that granularity.

Yes, Charles, just to reinforce what Caroline has said, we wouldn't see the ambition as a cap. I'm not going to manage this business in curtail growth. We're going to grab every piece of growth that we sensibly quality growth because the opportunity is so huge out there. And U.K., on average, 9% of take advice in the U.S. is something like 27%. So the U.K. market should be able to grow at least 2 to 3. And therefore, the growth opportunity for us is huge. And we're going to look to prosecute that at 3 position.

Thank you. And that was our final question. So I will hand back over to you, Mark, for any final comments.

Okay. Thank you for your time today, everyone, and questions. As I said at the outset, we're very pleased with the progress remains in the first half, both in terms of performance and in terms of operational execution. And we think that with strong foundations, continued investment in our client and adviser proposition and a clear strategic direction, we remain very confident in the opportunities ahead. Thank you very much, and I know I'll be chatting with you over the course of the coming days and weeks. Thank you.

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.

Good morning, everyone, and thank you for joining. I'm delighted to be here today to present our new framework for reporting financial performance, which we'll be implementing for half year 2026. Let me start with the most important point. Nothing about our profitability is changing. There is no change to our financial business model, anticipated profitability, financial ambitions or shareholder returns guidance. This is purely a change in how we present our results with the aim of making them easier to understand.

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 model adjusted IFRS profit after tax under the updated guidance that I'll provide later compared to what you modeled under our previous cash result guidance.

What is changing is the way we present financial performance. We are introducing an adjusted IFRS profit and loss account, replacing the cash results analysis with income and expenses shown separately and before tax. We're also simplifying parts of our Financial Review to make it easier to follow. In practical terms, this is about updating your models and not rebuilding them.

I'll now take a moment to set out our objectives and what we hope to achieve with our new framework. We have a straightforward wealth management business model, and we want our reporting to reflect that more clearly. So, we've developed our new framework to meet three key objectives. First is to provide a simpler and more transparent way of reporting our financial performance, which is aligned with our financial business model and charging structure.

Second is to provide a clearer link to statutory IFRS reporting requirements; and third, to improve comparability by better aligning to market practice. We believe that by doing this, we'll make it easier to see the drivers of our profitability. I'll now move on to detail the changes that we'll introduce at the half year to meet these objectives.

Throughout the presentation, you'll see both full year 2025 numbers and a pro forma result for Q4 2025. The Q4 view better reflects what we expect our financials to look like in the future after their shape change following the implementation of our simple comparable charging structure in late summer 2025. There will be no change to our quarterly reporting going forward. We will continue to report flows and funds under management each quarter, but not quarterly profits.

So, as I said at the start, our new adjusted IFRS P&L will replace the existing cash result as the key way in which we report and explain our performance. Our key profit metric, adjusted IFRS profit after tax, is unchanged from the current underlying cash result, except for being renamed. You'll see on the slide the adjusted IFRS profit after tax for 2025 was GBP 462.3 million, the same as we reported for the 2025 underlying cash result in February. Keeping our key profit metric consistent provides a number of benefits.

It represents the regular emergence of profits from the business and provides a consistent and appropriate base against which our 70% payout ratio for shareholder returns will apply. It provides continuity with our historic performance. It means the shape of future profitability is unchanged, so your financial forecast and thereby consensus profit estimates remain appropriate. And finally, it means our ambition to double our profits from 2023 to 2030 continues to apply.

Adjusted IFRS profit after tax is based upon our statutory IFRS profit measure, but with adjustments to remove items which are not reflective of underlying performance. For example, policyholder balances and material one-off items such as releases from our ongoing service evidence provision. These adjustments are set out in the slide in the appendix. Whilst the bottom line number isn't changing, the analysis that we present above that line will be different, and I'll get into that now.

You can see how we will present our adjusted IFRS P&L on the slide. This is consistent with the presentation of our full IFRS profit and loss statement, which means it presents income and expenses separately and on a pretax basis. After removing the policyholder tax-related items and grouping some of the less material lines together, the adjusted IFRS P&L simplifies down to just a few key elements. This presentation demonstrates that profitability is driven by fee and commission income, which represents client charges less the cost of running the business.

Now, I'll take you through each of the four lines of the adjusted IFRS P&L in more detail. Each of the tables I'll talk through will be included in our new style financial review, which you will see for the first time in our half year 2026 reporting. After I've walked you through each line, I'll provide guidance on how to model them under our new framework.

So, firstly, fee and commission income. This is revenue we generate by attracting and retaining clients that need and want long-term financial advice and wealth management. It represents all client charges. We split it into income from funds under management, which I'll refer to as FUM, and income from inflows with these being our two key business drivers.

Income from FUM is recurring and is generated from ongoing advice, products and investment management charges that are applied to FUM for as long as the client remains invested with us. Income from FUM in Q4 2025 equated to 131 basis points of average total FUM in the period on an annualized basis. Given that we still had GBP 52.9 billion of non-income-generating gestation FUM at 31st of December 2025, we would expect this margin to increase through to 2031 as this gestation FUM begins to contribute to ongoing profitability. I'll come back to this when I talk through guidance later on.

For those less familiar with the concept of gestation FUM, further information can be found in my CFO's report in the 2025 annual report and accounts, which is available on our website. The 131 basis points income from FUM margin is lower than you might expect from the simple illustrative charging rates we have in place under our new charging structure.

These are 167 basis points for investment bonds and pension business and 159 basis points for Unit Trusts and ISAs. This reflects the impact of gestation FUM but also factors such as fund-by-fund variation, investment management charges and tiering of ongoing product charges. Income from inflows is earned when clients invest. As you can see from the fourth quarter pro forma, this reduced significantly when we removed initial product charges upon the implementation of our new charging structure.

This income moves directionally in line with gross inflows but the relationship is not linear, for example, because third-party products do not generate a gross inflow.

The next line in the adjusted IFRS P&L is expenses. We group these in three categories: expenses which relate to FUM, expenses which relate to inflows and expenses which are not directly related to either. We've also subdivided this final category into a number of items to help with modeling. Expenses which relate to FUM include payments to partners for providing ongoing advice, payments to third-party fund managers and payments to a third-party provider for ongoing administration services. Each of the expenses in this category vary with FUM levels as does the associated income.

Expenses which relate to inflows include payments to partners for providing initial advice and payments to a third-party provider for the initial setup of investments on our administration system. These expenses vary with inflows as does the associated income. You're then left with expenses which are unrelated to FUM or inflows. We work hard to manage these expenses, the most significant of which is people, property and technology, or PPT costs.

This includes all costs, which we previously referred to as controllable expenses, plus those PPT costs, which we used to recognize outside of controllable expenses. For example, those relating to our Asia and Middle East and discretionary fund management businesses.

Performance-related costs primarily relate to employee bonuses, which vary with business performance against a scorecard of different metrics. The metrics which apply for 2026 are detailed in the report of the Group Remuneration Committee within our 2025 Annual Report and Accounts. Financial Services Compensation Scheme, or FSCS, as well as other regulatory fees, are the same as we used to present in the cash result, although they are now grossed up for tax, as are all the numbers in the adjusted IFRS P&L. These expenses are a cost of doing business in a regulated industry over which we do not have any influence.

Charge structure implementation costs represent expenses associated with putting in place our new charging structure in late summer 2025. As a result, these costs fell to 0 in the Q4 2025 pro forma. Other expenses represent all items not covered in any of the other categories. For example, corporate donations to the St. James's Place Charitable Foundation and the remediation costs associated with client complaints.

The next line in our adjusted IFRS P&L is investment return and net finance income. Investment return represents interest we earn on shareholder investments in money market funds. It does not include investment return on client investments, which are stripped out of the adjusted IFRS P&L, as these returns benefit clients and not shareholders. Finance income represents interest we earn on business loans to partners and shareholder investments in cash and cash equivalents, while finance costs primarily represent interest paid on group borrowings.

The final line in our adjusted IFRS P&L before tax is the insurance result, which combines all insurance-related lines in the IFRS P&L. Given our insurance business is small and in runoff, the overall insurance result is trivial and will remain so going forward.

A significant proportion of our income and expenses are closely linked. For example, advice charges and the associated payment to partners. So, the table on this slide demonstrates how these can be considered together to provide a breakdown of profitability by key business driver. The pro forma for Q4 clearly shows that since we embedded our new charging structure, our profitability is driven by FUM. The profit from FUM margin in the Q4 pro forma represented 46.5 basis points of total average FUM on an annualized basis. We expect this margin to increase through to 2031 as gestation FUM begins to contribute to ongoing profitability, which I'll cover shortly when I turn to guidance.

The Q4 pro forma also shows that profit from inflows is modest under the new charging structure. Profit from FUM and profit from inflows as presented here are similar to, but not the same as, the previous cash result metrics of net income from FUM and margin arising from new business, respectively. This in part reflects the grossing up for tax in the new metrics, but we have also taken the opportunity to review and reclassify certain items of income and expenditure recognized in a number of different lines of the cash result to more accurately reflect their nature. As a result, it is important to decouple the guidance that we used to give on net income from FUM and margin arising from new business from the guidance I'm about to give on profit from FUM and profit from inflows under our new framework.

At this point, I want to take a moment to explain a change in the way that we will present our FUM margins and associated guidance going forward. As a reminder, under our former charging structure, investment bond and pension business did not generate ongoing product charges for the first 6 years following the initial investment, with FUM in this period described as being in gestation and not contributing to profitability. We've previously provided guidance on margin as a percentage of income generating or mature FUM, which excluded this gestation FUM.

Going forward, we'll instead be presenting our margins as a percentage of total FUM with guidance on how we expect this margin to increase as the existing gestation FUM matures. We believe that this will be easier to understand and model. We expect profit from FUM to represent 47 to 49 basis points of the average total funds under management for 2026. We will provide 1-year forward guidance on the profit from FUM range, but for modeling purposes, we suggest you assume an approximately 3 basis point annual increase in the range out to 2031 due to gestation FUM maturing.

This is driven by additional income from FUM as gestation FUM starts contributing to the adjusted IFRS result for the first time. And so, the income from FUM margin will increase by a corresponding amount annually. We expect the profit from inflows to remain small going forward as it was in Q4 2025. This is an appropriate starting point for modeling.

On expenses, we anticipate that growth in people, property and technology costs will be contained to 5% for 2026, in line with our previous guidance for controllable expenses. As previously guided, there will be no net impact from our cost and efficiency program in 2026. We expect the performance-related costs will increase broadly in line with people, property and technology costs over the medium term, though with greater year-on-year variation based on business performance.

There will be no further charge structure implementation costs to come in 2026 or beyond. For other expenses, for modeling purposes, we suggest annualizing the expense in the fourth quarter 2025, though there will naturally be some year-on-year variation. To get from adjusted IFRS profit before tax to adjusted IFRS profit after tax, we suggest you apply the standard rate of 25% corporation tax in all years. Again, there will be some year-on-year variation.

So, what does all of this mean for your modeling and consensus expectations? Given adjusted IFRS profit after tax under our new framework and the underlying cash result under our previous framework are equivalent, and there have been no changes to how our financial business model operates, we expect that you will model materially the same result under our new framework and guidance as you currently have under the cash result and associated guidance. This means that current consensus expectations for sharply accelerating earnings growth from 2027 remain valid.

Before I wrap up, I'll touch on a couple of other changes that we'll make to the financial review you'll see in our half-year 2026 results. Firstly, in the spirit of further simplification, we will rationalize our gestation FUM disclosures. We'll no longer present a table indicating how gestation FUM may mature over the next 6 years and how much it could contribute to the cash result over time. This is because our new guidance for profit from FUM is based on total FUM rather than mature FUM, meaning you no longer need to deal with the complexity of modeling gestation FUM runoff and how this might support future margin. Instead, our guidance that profit from FUM is expected to be in the range of 47 to 49 basis points of average total FUM for 2026, which will increase each year to 2031, already factors in gestation FUM maturing.

Secondly, to remove unnecessary complexity, we've retired the full Solvency II Net Assets balance sheet from our Financial Review. We will, however, continue to report this balance sheet and how it's derived from the IFRS balance sheet, in the databooks, which we will publish on our website each time we report half-and full-year results.

Going forward, we'll show an extract of the shareholder balance sheet and how it is derived from the IFRS balance sheet for financial investments and cash and cash equivalents. This is to provide the total shareholder liquidity balance, which we discussed in the capital and liquidity section of the Financial Review.

To summarize, I am pleased to have been able to take you through our new framework for reporting financial performance, which we will be using from our half-year 2026 results onwards. This is a simpler, clearer way of presenting the financial performance of our business. There is no change to profitability, just a better way of showing the key drivers behind it. I'd like to invite you to join me in Investor Relations for a Q&A session today at 4:30 p.m. about this reporting simplification. A transcript of the Q&A session will be available on our website in due course. Thank you for listening.

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 is 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 named -- 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 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'd 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. How -- why is that higher than the 167 that you're charging under the new structure? So, can you just, kind of, square the math there? And then 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 and DIR, does that just run off over time given you're not writing...

So, on the first question, 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, we 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. The gestation FUM is 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.

Yes, we can do the calculations for sure.

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

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 DIR. 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 fees charges. So, yes.

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's changed here. The [ rec ] 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 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 thing in other expenses are [indiscernible] 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 [indiscernible] so many questions. I'm getting my brain and this was not one. I think it's within people, property and technology costs. It should be within that. I think that's where we would find it.

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. I mean to think about it.

Understood. That's clear. That's very clear. It's above the line. That's very clear.

Yes, it is. Yes, it is.

The next question is from Greg Simpson from BNP Paribas.

A few random ones here. The -- 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 3 basis points can -- 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, would it be 2 or 4? Just want to square that kind of how smooth that margin increase is.

Yes. I mean -- I'll start with that. I stopped you asking multiple questions, but I will ask you -- let you ask another question in a minute. So on the 3 basis points, 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 -- 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 3 basis -- 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. So just you are excluding share-based compensation from your adjusted figures, just to confirm that's the case and 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, right? Kind of the cost...

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 -- in their type of income rather than splitting it out by Asia and DFM. So yes, it's all in the income from FUM and -- sorry, profits, from FUM profits, from inflows and PPE. 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, if the equity settled is actually excluded from the cash results. That's aligned. Number one, that's aligned -- sorry, the adjusted IFRS now, that 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 is that -- it's not necessarily a cash item. And then when we do, do that, we will do that out of 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 to 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 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 present in 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. Top of head, no. 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 we get -- 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...

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 had a slightly higher H2 weighting, but by a similar amount, just over 50%. Apart from FSCS, everything else is pretty even in general.

I just want to take you up on that. Performance-related costs were 26 in the first half, 39 in the second. Other expenses, 28 going down to 18. People project costs, 256, 269. I can see that, that's sort of just general progression. But they 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 would 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 -- 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.

[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 [Technical Difficulty] you're disclosing.

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

Yes, of course, yes. Sorry about that. So on Caroline's recorded remarks this morning, you mentioned that there was obviously a gap between the 167 for investment bonds and pensions and the 159 bps for Unit Trust and ISAs, other disclosures comparing the 131 that you're disclosing within the data today. Obviously, much of that is going to be the gestation difference. If I do 3 times 6, 3 basis points times 6, that's obviously about 18, but 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? 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 for bonds and pensions and 159 for Unit Trust down to the 131 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 expect over time, as more of our gestation FUM matures, that margin will trend upwards.

And 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.

So on the fee compression, I think the way we look on this is, obviously, the same way we've always -- we've always said we think advice is something that with the scarce resource in the industry is something that will be one of the last 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 see if we can pass it 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 have some -- we obviously have some sort of some degree of conservatism into that. But I mean I think that's how we sort of see it going as we -- as time moves on.

Our 43 to 45 bps...

Yes, just 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 to 45 bps margin range, that did assume, as we move out to 2031, that we could give up 1 bp or 2 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 and 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 profit 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 and 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 a 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.

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.