St. James's Place plc

I will now hand over to Mark Fitzpatrick, CEO, to begin. Please go ahead.

Thank you, Lucy, and good morning, and thank you, everyone, for joining us. It's Mark Fitzpatrick here. I'm aware today is an incredibly busy day in the marketplace, so we'll try to keep our timings as accommodating as we can for you. I'll open for questions in a moment, but before that, I wanted to reiterate three key takeaways from the full year results announcement. First, it's been a year of challenge, change, and hard work for SJP, but also one where we've achieved a lot. The partnership has delivered very strongly this year in being there for clients, guiding them through the changes from the budget and the ups and downs in the economy, and their hard work has helped to grow our client base, mainly through word-of-mouth referrals from existing clients. We've realized strong investment returns for clients and collectively maintained a high client retention level. All of this adds up to strong flows and good financial results. We've also refreshed our strategy and we've made progress on each of our key programs of work. I want to acknowledge and thank everyone in our SJP community for their contribution in driving this. It's not been easy, but as I said in the presentation, they have all delivered brilliantly. Secondly, 2025 is going to be another year of heavy lifting for the business. I am confident that this will strengthen SJP further and put us in good stead for the future. Beyond delivering our key programs of work, we'll be investing to support and underpin our long-term growth ambitions. The role of the partnership is critical to that, so we'll help our advisors to do more and be more efficient in how they do it. For example, we're developing and trialing tech-enabled tools to support advisors with administrative and technical queries. We're also working to extend our product and investment shelf with a focus this year on exploring a dedicated passives proposition. Thirdly, I want to reiterate the size of market opportunity ahead. There is a £3.3 trillion of investable wealth in the UK, and this is growing. And so too is the need and demand for trusted financial advice. As the home of invaluable advice, we are ideally positioned to help more people secure their financial futures. All of this means I'm really excited about what we can achieve for all our stakeholders in the years ahead. With that, we'll open up for questions and I'll hand back to Lucy, the operator.

Thank you, Mark. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We have a question from Andrew Sinclair of Bank of America. Andrew, please go ahead.

Thank you very much. Morning, everyone. And what a change in sentiment in the share price versus 12 months ago at results last year. Three from me, please. First, just on the provision, maybe hope for a little bit more colour today. I expect you've made some progress in recent months. Can you update us on that progress and can we very much draw a line under your announced provision number and move the discussion on? The second was just for the deferral of some of the implementation costs for the new charging structure. Just to clarify, will all of these deferred costs come through in H1 2025 or with the new charging structure, I guess, going by 1st of July? Or are there any residual costs in H2 or even dragging into 2026? And third, I know I go on about this, just advisor headcount, really good print in H2, but you've talked about the productivity focus. Do you think we'll see advisor headcount up, flat or down in 2025? Thanks.

Andy, thank you. And yes, it's been a very interesting 12 months, so much more comfortable this time around than this time last year. In terms of provision update, I think last year we said this would be a two to three year program. So year one was all about building the infrastructure needed. Year two, so the current year, is all about execution, connecting with our clients. And year three is really about finishing up the task. In terms of building the infrastructure that's needed over the course of the last year, And probably taking a little bit longer because we want to be more efficient and more effective at how we effectively hoovering up the data from the partnership and from their records. And that's not quite as effective and efficient as we want it to be, because I want to do this in a high quality way and I only want to do this once. So there's lots of time, lots of attention on it. and expecting this year to make significant progress and to be mailing out significant numbers of clients that are affected. In terms of the second question, deferral of implementation costs, I'll hand over to Caroline.

Yeah, hi, Andy. Yes, so the deferral of implementation costs, we expect these to be in half one and some will be in half two, but we expect them all to be spent in 2025 with nothing in 2026.

And in terms of advisor headcount, a stronger addition in the second half of last year. We have a good pipeline coming through on the academy. I think there are about 345 in the academy still to come through, training well. And as I think I've said to a number of you, the academy is absolutely, I think, one of the crown jewels we have in the business. And just delivering so strongly for the sector as a whole in terms of the need for advice. And I think over the last five years, effectively, I think we've delivered the lion's share, a significant proportion of the advisors for the market as a whole.

Thank you, Andy. So just to clarify on that, Mark, just coming back to the point, do we think that the headcount can be up in 2025? given the productivity focus, or do you think we will see that number go down a little bit in 2025, just any guidance on that?

I think there may be a marginal decline as we go through the element of dealing with some of the productivity component, but I'm not expecting it to be anything significant. Ultimately, our objective is to grow our advisor numbers, and we will continue to grow advisor numbers in the longer term. There may be a short-term element while we deal with some of the productivity aspects.

Thank you. Thank you.

Our next question is from Naseeb Ahmed from UBS. Naseeb, your line is open. Please go ahead.

Perfect. Thanks. Three questions for me as well. Firstly, on the client propositions that you highlighted previously, the ultra high net worth proposition and the cash product, I think you said you're focusing on other things at the moment, but any update on that, on the progress on getting those out to the market? Secondly, on kind of advisor and client feedback on the new charge structure, I mean, it's pretty open what you're doing. any feedback that you've got from advisors or clients on the new structure. Are they happy or are some advisors unhappy with the new structure? And kind of related to that, if I can bunch that question in as well, on tiering, I didn't see anything on the tiering of charges, and I think you're going to come back to us on how the tiering is going to work. And then finally, on the bridge facility, you're repaying that back. That's about $250 million. It seems like you're generating quite a lot of cash, and the payout ratio still remains at 50%. So, If you're generating 250 million every year in excess, when is the payout ratio going to go up?

Thanks. Okay. Naseeb, thank you. There's quite a lot in there. In terms of proposition, actually, the proposition firstly was on high net worth, not the ultra high net worth. The ultra high net worth we're going to leave for the private bankers to play with and the like. So it's really the high net worth component. We think reality, that's really part of the Amplify phase. So that's going to be, we're going to be planning that the back end of this year, next year. And reality, that'll be coming through more strongly as we get to the end of 2026. Likewise, an element of the cash component. In terms of advisor feedback on the new fee structure and actually on tiering, let me deal with both those together. You'll see in the slide deck, in the appendix of the slide deck, we set out what the tiering component is. So you'll be able to see that there. Look, the advisors, we've been talking to the advisors, you know, effectively since before I took over as CEO. So there's been lots of interaction, lots of discussion. Our advisors are on, incredibly resilient and when they see the world is changing they adapt to that incredibly well so they're adapting their models they're adapting how they do things what they do think how they do things they're incredibly versatile so they're moving and preparing and getting themselves ready for the the new world there's lots of training lots of support going on in that regard and we're so confident in our timing to be able to get this done by the by the end of this half And in terms of the payout ratio, Caroline?

Yeah, so on that, I would just say initially that the bridge, we did take that out when we took the provision out. It wasn't necessarily utilised. So we're not actually generating, didn't generate necessarily that £250 million. We're just paying back what we borrowed. But your question is valid because obviously we are cash generative. So just to clarify, because I'm not sure everybody's clear, our current distribution policy is to pay out 50% of our underlying cash results annually. for the year ends 2024, 2025 and 2026, as we go through this period of transition for the business. Our approach to shareholder returns will be considered for 2027 year end and beyond. That's a decision for the board at the appropriate time. I'm obviously not going to preempt that. But if performance is in line with our ambition, we would expect upward pressure on the payout ratio. What I would say is, though, I would say we have got a lot of wood to chop between now and then. But that's when we will be considering it.

Makes sense. Thank you both.

Thank you.

Our next question is from Andrew Crean of Autonomous. Andrew, please go ahead.

Good morning. Yes, three questions if I can as well. When you look at excess capital, or how should we look at when you're generating excess capital? I assume it's the life company solvency ratio. You target one 30%, but presumably you want a buffer. What I'd like to know is above what levels would you deem you have excess which could be returned? Secondly, can we come back to the redress issue and could you comment on the FCA study of the 22 companies which appeared to show that on 2% of cases, there was an issue where people had been charged but had not received ongoing advice. That was the same ratio that you had. or said that you had for 2023, could you confirm that that is still the case, having done the work on the earlier years, that it is only 2% of cases involving 1% of funds under management? And then thirdly, there's no mention here of either Asia or Rowan-Dartington. Are these still core parts for your business? And perhaps you could say on Rowan Dartington, what proportion of your million customers actually also have a Rowan Dartington account?

Andrew, good morning and thank you. I'll deal with the second and third and then I'll ask Caroline to pick up the first piece. In terms of the redress exercise that we're going through, As I mentioned earlier on, we're making meaningful progress around that for a multi-year program. We're focused on completing the program. We noticed, you know, kind of I read the FCA statement like everybody else and appreciates the guidance it provides. I think it's helpful for the industry as a whole in terms of the you know kind of removing that that potential overhang for the industry and I think it provides a slightly more nuanced picture in terms of what advice ongoing advice is and Really good to hear the FCA talk very openly, very strongly supporting the need for advice and the appetite for a strong wealth management and advice sector in the UK, because the more we can get people investing, the better it is for the UK economy, et cetera. Andrew, we weren't part of the 22 companies that the FCA looked at, so we don't have firm, you know, kind of specific feedback from the regulator. We just read what everybody else read on that particular piece. But we will take into consideration the guidance as we move through the programme. But we remain confident in the adequacy of our provision.

On the element of our... Mark, specifically, are you still at a case where only in 2% of cases and 1% of funds under management have you got an issue?

Which is what you said in 2023. Yes, so in 2023, Andrew, that was the situation as of 2023, and we had complete confidence in those numbers by virtue of the fact that 2023, we had effectively full utilization of Salesforce, and we could see the overall picture on that. The issue, if you recall, going further back to 2018, and we're very pleased the FCA has effectively agreed with us and for the market that 2018 is the right parameter for in terms of how far people should be going back if they have to do this exercise. We, at that stage and still, are working out exactly what the size and scale of the gaps are for those earlier years. But we based our provision based on the samples that the skilled person had done on the basis of last year, and there's no new information that's come through in the intervening 12 months that would cause us to revisit the adequacy of our provisions. Thanks. Okay. And then Asia RD piece. Effectively, I think the number of clients from an RD component is kind of probably about a percent of the overall number. So it's not a huge number at this stage. And that's one of the things we want to look at as part of our high net worth component, because we think there's a lot more that can be done. And we want to see what the role of DFMs around high net worth can be. We think there's a lot more we can do in that and be a lot more deliberate. And onto your first question around XSE.

capital and the like caroline yeah so thank you andrew for that i mean our solvency ratio is one measure and obviously we are an insurance company although we're not a traditional insurance company and we have to adhere to the um the solvency two requirements and as you say we're above that but i don't have a target on that um where the way i actually look at the capital required for this business is actually what capital do i need to hold because i've got pretty much a match book so we have a management solvency buffer which looks at sort of things like operational risk and the capital we need to we believe we need to hold for the entities And then that feeds into our capital calculation requirements. We then have other elements of it. So things like liquidity has to feed in. So we have intangible assets on our balance sheet that obviously can't be paid out. And then we also have degrees of working capital, things like sort of the much-loved policyholder tax and things like that. So there's other things that means we can't pay out. And we do aim to then pay out what we can to shareholders. That's through our capital allocation framework, which I talked about in the presentation, but I think was also... spoken about in july so that's how i i think about my capital and andrew it has been pointed out should we view it externally how should they view it um yeah so i will i will After my five months, I've looked at my internal view. I will I will reflect on that, Andrew, and get back to you with it with an eloquent answer, which would not be the case right now. So let me let me let me reflect on that. It's a fair question. And I will I will get back to you.

Thank you. Andrew, I'm conscious I hadn't answered part 3A of your question around Asia. I think, you know, Kennedy, I wouldn't read too much into the fact that it isn't up in bold lights at the moment. I think between Asia and RD, they represent, I think, about 5 billion of our 190 billion of funds, so it's more in that context. And I think... Just trying to keep the messaging today fairly simple. The businesses are operating in exciting markets. And you'll see from the cash write-up in Caroline's section of the accounts that actually the team have done a great job in terms of expense control and investment level. So that's moving in a good direction. And the team are enthusiastic to prosecute the opportunity ahead of them well.

Okay, great. Thank you. Thank you.

Our next question is from Greg Simpson of PNB Paribas. Greg, your line is open. Please go ahead.

Yeah, hi, good morning. Free again, if possible. Just to go back on, firstly, just to go back on the FCA publication. They had quite a large cohort of clients where they declined or did not respond to an offer of an annual review. I think it was 15%. Just wanted to check your understanding of what you do going forward with these kind of more unengaged clients in the client base. Second question would be, The original guidance around initial charges was up to 4.5%, and now it seems like it's up to 3%. So just to understand, our advisor is going to be getting less upfront than you were originally budgeting for. And also within the 80 basis points ongoing advice fee on slide 38, our advisor is still getting 55 of that. And then finally, just wanted to check in if there's any comments around current client advertising behavior. In particular, Q4 was very good for growth inflows. How's that kind of continued post-budget?

Thank you. Thank you. So I think in terms of the... The first one in terms of the FCA's review, it's candidly because we weren't part of the, you know, the 22 companies that they look at. We don't have any specific feedback from the regulator. So we'll, you know, we'll look at what they've come up with. We'll take it into consideration. But at this stage, it's still very early days to kind of to kind of land on anything conclusive. As for the advisor component, the ongoing advice charge, 55 pips is going to be paid through to the advisors. The 3% component, actually, when we look back and we look at the number of kind of transactions over the course of the last year, about 97% of those were done through that first level, that first tier of about 3%. And on average, I think I remember Craig telling me this a little while ago that actually many of the advisors do their own kind of or did their own kind of discounting. And the average kind of discount that we were working at was about a 3% level. So there will be some adjustment for some of the advisors. But again, this is something we've been speaking to them about since, you know, during the course of back end of last year. And they've been adjusting their models and their reflections of how they go forward. And it's very much in line with what I think the rest of the industry is doing. And then in terms of the third question around client appetite and the like and client behavior, I think direction of travel is, you know, when we see the budget, when we look at the uncertainty in geopolitics and the market, actually it's crying out for people to seek further advice and to understand and have somebody who can advise them what to do and what not to do. Sometimes advisors help clients clarify calm themselves, relax and not overreact to what they read in the paper at every verse end. So we expect the demand for advice to continue to grow in these somewhat more turbulent markets that we're seeing at the moment.

Thank you. Thanks, Rick.

We now have a question from Charles Bendit from Redburn Atlantic. Charles, your line is open. Please go ahead.

Thank you. Just one for me. I wanted to follow up on Greg's question about the initial charges. So the one to three, I think, is referring to the initial advice charges and tier depending on case size. And I just wanted to check that there's no tiering on the 1.5% initial product charges. And I'm just curious whether the regulator is applying an industry level pressure on firms to share economies of scale with on all aspects of their charging structure and whether we could see that come through in due course. Thank you.

So, Charles, I think the regulator would be at pains if they were on this call and they may well be on this call. They'd be at pains to say that actually they're not a pricing regulator. So ultimately, I think what they're looking at is to understand people's prices vis-a-vis the value. And that's a key component of the consumer duty aspect. So when we've looked at all the different aspects of our charging structure and charging model, we've looked at it vis-a-vis value and vis-a-vis the element of value versus the cost for each individual component. We can see as we go forward and as we set out an element of tiered ongoing product charge for sizes set out in terms of the slides in the appendix on that. But from an element of... anything else at this stage. I'm not expecting to see any other aspects of tiering come through over and above those we've set up. There is no initial product charge of the new charging. Sorry, I missed that piece. Thank you.

Okay, thanks very much.

Our next question is from Enrico Bolzoni from JP Morgan. Enrico, your line is open. Please go ahead.

Thank you. Good morning. So my first question, going back again to the tiering and initial charges, I appreciate you communicating with the advisor. I was just wondering, being these slightly lower than what they were before, I appreciate, you know, clearly the average was 3%, but now the range is 1 to 3 as opposed to 1 to 4.5. Do you expect a change in advisor behavior in terms of the sorts of clients they will want to onboard? By that I mean they will focus more on wealthier customers because even more the not so wealthy ones are not so profitable. Or in a way you actually expect maybe the opposite, which is that by being relatively cheaper than others, you expect to see more of the mass affluent coming to St. James' Place. Just because now it's cheaper. So that's my first question. My second question, just if you can provide some general comment, I appreciate it's just the end of February, but how things have evolved here today? You come from a very solid momentum, so it will be interesting to hear your thoughts there. And then finally, a very general question, but you, in the press release, you mentioned about the importance of culture and making sure that the culture is aligned with the vision. So, Mark, can you just give us some color in terms of what sort of culture you expect at St. James' Place, how have things changed, and how the perception of the company is changing in your opinions?

Enrico, thank you. Three very, very different questions. So firstly, on the tiering model, we have a very broad base of advisors and different models. There are some advisors who really focus on the high net worth component and really drive that. And there are some who focus predominantly on the more retail component. And there's some who do everything in between. So we think that actually the fee structure will definitely start to remove the headwind that some folk have faced around the perception of SJP being expensive. It should make it a lot easier for the media to understand, a lot less, a lot more difficult for competitors to confuse prospective clients with fee levels because it's going to be very straightforward. And the fee levels that we're advocating are very much in line with market. So what I think will stand out is going to be the quality of advisors, the quality of support they get, the quality of training they have and the depth and quality of relationships, because I believe they are truly exceptional on that side. In terms of year-to-day performance, to some extent, it's testament to that. The first quarter, really, in the run-up to tax year-end, March is such an important component of that. March effectively makes or breaks the quarter as everybody prepares and makes sure they've used their tax allowances properly. And this year-end, there's a lot more activity for everybody to do to make sure they're managing any capital gains properly and effectively. So it's the after-tax affairs rather than just their affairs. So there's a lot of work. Our advisors are incredibly busy at the moment, working incredibly hard with clients, supporting them. So let's see how March goes. But the beginning of the January, February is looking good. As regards culture, it's something that I'm a real, you know, I spend a lot of time focusing on culture. And I'm very keen to have a culture where people feel empowered, emboldened, open, bringing more of the outside world into the organization and creating a closer connectivity with the advisors, with our people, ultimately all driven around what is the right thing to do for the clients and how do we support the clients. So if you're a receptionist in Cirencester, It's a bit like if you're kind of, you know, that whole NASA story. It's all about kind of looking after the clients. It's all about helping somebody get to the moon. We're all aligned to that. So it'll take some time to get the culture to the place I want it to be. But I think people recognizing the opportunity to shift the culture and the opportunity for us all to work very, very hand in glove in terms of being very focused on how do we support clients? How do we help clients? And that's been a big part around the national campaign. Our brand campaign and a lot of the research we've been doing is all about understanding the needs of clients and how collectively can everybody in the SJP community play a role in delivering against that. But I appreciate that question. Thank you. Thank you.

Our next question is from Ben Bathurst from RBC. Ben, your line is now open. Please go ahead.

Thank you. I've got questions in three areas, please. Starting with the charge change implementation, I just wondered if you could maybe be a bit more specific around the plan timing of this in 2025. Perhaps as a minimum, you could maybe say that it's Q3 or Q4 implementation that you're planning for, as clearly there are implications for the cash result modeling for this year. And secondly, also on charge changes, do you have any internal expectations around how short-term flows might be impacted sort of either side of the changes? I mean, do you think it could be reasonable to expect maybe some pull forward and then a slow down either side of the implementation date? Or do you think there could be a distraction factor maybe weighing on new business in the run-up? Any thoughts around that would be appreciated. And then thirdly, on the BSP process, at H1, you referenced as part of the strategy update, potentially needing to invest capital to ensure successful operation of that scheme. I wondered if there was any update there and if that's something you're envisaging doing more of over the course of 2025. Thank you.

Ben, thank you very much indeed. So in terms of the new charging structure, I think we're on track to have it in place by the end of this first half. So from a modeling perspective, you should be looking from the beginning of the second half of this year that the new charging structure is in place. As for what might happen in the run-up to that and the like, clearly at the moment, everybody's focused on taxi rent and supporting clients around that particular piece. There may be some movement at the margin. Candidly, it's quite difficult to say exactly what may happen. we will be sharing with clients effectively a this is what can happen today. This is what can happen in the future in the new model shortly before we go live so that clients are given complete transparency. So I think once we've seen how clients react or don't react to that, The key thing to remember is the main driver of change here, I suppose, is through the removal of the EWC on pensions and bonds. Those are long-term investments. Those also are investments that have important tax opportunities. So the difference from a client perspective is very much at the edges. And we don't think there should be a major change from a client motivation and a client timing perspective on that side. But we'll see soon enough as we start to provide the dual disclosure. And then on BSPs, Caroline.

Yeah, Ben, I'm very pleased you asked me this because BSP is one of my favourite things since I got here, actually. I think it's actually a fantastic thing. It's a very important part of our business as usual and our capital allocation business. So, yes, it's as a scheme, we very much back this. We do debt financing off our balance sheet, but we work very hard as a team to get that sort of off balance sheet. So I think 60% of our loans were actually off balance sheet as at the end of the year. We have some fantastic funders we work with on that. It is very much correlated with funds, so this is very much sort of a business as usual. We have made a couple of strategic equity investments. They're small compared to our loan book, which is a very well-performing loan book. And we obviously will look, I mean, as part of our sort of go forward, we are alive to looking at strategic equity investments, but the majority of this is going to be debt funded. And yeah, so as I say, one of my favourite parts of the business.

Thank you for that colour on BSP. As a follow-up, can I just inquire as to how you intend to be reporting the equity investments you make going forward? How will we be able to sort of monitor the performance of those investments and track them?

They're included in investments in associates in the accounts.

Okay, great. And within the cash results? and within the underlying cash results.

I will double check that, but I believe there will be a miscellaneous, but let us get you the specific answer. I'll get that through. Brilliant, thank you. But it is very small. By the way, it is really small.

Ben, I think one of the things I've asked Caroline to look at when she came in was to look at our financial reporting. For a business that should be relatively straightforward, our financial reporting seems to be wonderfully complex. And I'm desperately keen that we make that a lot easier. So over the course of this year, something Caroline and the team are going to look at so that this time next year, we've got some different disclosures, et cetera, along the way. And we'll take everybody through it carefully ahead of time. And one of the things I'm keen to do is to make sure we give proper prominence to the big items and that the small items, that they don't clog things up as, dare I say, they might have done in the past.

Great. Thanks for that.

Our next question is from Stephen Haywood of HSBC. Stephen, your line is open. Please go ahead.

Good morning. Thank you very much. Three questions, please. On your DFM business, can you give us an idea that you have broken even there in 2024? And can you give us a sort of guidance of where you expect the operating cash result to trend to on this business. Secondly, the FCA previously said that annuities were an underutilized product by advisors and is sort of trying to encourage advisors to make more use of annuities going forward. What is St. James Place's view on this and how ultimately changes in inheritance tax could impact the use of annuities and potentially other life insurance products. And then thirdly, looking at the charging structure differences, if a new pension customer was to come into St. James' Place before the second half of this year, is it actually beneficial for them to come in and not have the ongoing charges during the surrender period than actually to come in in the second half of the year when they get ongoing charges during the first few years, considering you said that 97% of transactions are done at a 3% initial commission or below currently anyway. Thanks.

Right. Let me deal with those in order then. In terms of DFM at the end of the year, we had got to break even. I think one of the things we're looking at now and in looking at what we might do around the the ultra high net worth component as well is I'm probably going to look to just, uh, make some tweaks to some of their systems and the like. So I think from a modeling perspective, if you're looking to model, I can probably model the same kind of level of investment that we had this year. I'd look to model that out from probably next year and then see that number coming down, uh, in the, in the future from there and then ultimately moving into a positive. Um, On annuities, I absolutely think that annuities, when interest rates were very low, were massively underutilized across the sector as a whole. We have seen an uptick in the utilization and in the references to annuities. We don't offer annuities ourselves, but we have, through external life companies, referrals that our advisors talk to clients about and help Clients access annuities and we've seen a modest uptick on that. It is a very specialist area, Stephen, and it's not an area we're going to look to get into ourselves. Whole of life is another area that you could use from an inheritance tax aspect. Generally, the margins and those are quite small. We used to do that a very long time ago. Again, there are specialist firms who do that very well, who change pricing on HoloLife products on almost an hourly basis. So it's not something that is actually a core capability for us anymore. And therefore, it's not something that we would look to pivot to. And then in terms of the charging structure, somebody, you know, at the edges of the end of the first half, et cetera, technically, yes, but the effect is very, very small. And the effect is probably offset more by the tax savings that an individual will get by savings on their pensions and investing in their pension, you know, in month rather than actually what might happen absolutely at the edges. So because these are long-term investments, I honestly don't think this is going to be a real consideration because the lion's share of our clients for years have kept going with their investments in terms of pensions and bonds. They haven't been pulling them out when the EWC period is over. Just by virtue of the construct of these savings tools, investing tools, pensions are incredibly tax efficient and A very smart way for people to invest and save for their future. So we see that continuing to be the case as we get closer to the go live. And by the time we have this call for the half year result, we'll have a bit of a sense of what's happened to client behavior. We'll be able to give an update then.

Thank you very much.

Thank you.

We have a question from Andrew Lowe of Citi. Andrew, your line is open. Please go ahead.

Hi, thanks for taking the question. I just wanted to follow up on the life assurance point, if that's all right. I just, do I understand it correctly that you're, does your offering in that sense sort of differ materially from peers? You sort of made a comment that you sort of outsource a lot of this and therefore what's the, if you get a shift away from pensions into more of this product? Is that a sort of scope for you to lose any of those revenues?

Andrew, I think my expectation is annuities, whole of life, it's going to be an and, not an or. I think it would be Fascinating for somebody, and I'm not giving financial advice here. It would be fascinating for somebody to go down the annuity and the whole of life route and not have a pension component because the pension component gives in-year savings as well from a tax perspective. So we think at the margins and our advisors are really focused on what the client needs and If there's an element that a client needs that's outside our offering, they will help a client access and facilitate the exposure to that to manage that component of risk. So I expect it to be at the margins. There are a lot of other kind of inheritance tax plannings and things like that that can be done. Bearing in mind, inheritance tax planning, inheritance tax is only paid, I think, by 4% of people in the UK. And OBR, I think, in light of the budget, thought it might increase by another 1, 1.5% going forward. So we're not talking a huge slice. Clearly, it's a bigger slice of our market, but it's not everyone in our market because, again, people are... advised to plan sensibly and there's still a lot of inheritance tax planning that can be done very sensibly, very effectively without needing to go down the insurance route. Thank you.

Would you be willing to put a ballpark figure on how many of your clients will be subject to inheritance tax?

I do not have that here and that would be an interesting number because our individual advisors would know that for their individual clients by virtue of looking at their confidential financial reviews, looking at 100% of where they are, acknowledging that clients investors subset to their portfolios and wallets with us rather than the whole thing um so that's not a readily available uh number so i dare i say i'm not going to ask the partners to run around and do that for me at the moment i'd much rather than be engaging with clients but if i stumble upon it i'll bear to mind next time i see you fair enough thank you very much thank you

We have no further questions. So I will hand back to Mark Fitzpatrick for closing remarks.

Lucy, thank you very much indeed. And thank you everyone for your questions and your attention. No, it's an incredibly busy morning. Just a few final things for myself. This 2024 was a year of challenge and change at SJP, but I think it's only strengthened my conviction in the business. We've performed well. I think we've delivered a strong outturn for our flows and our financials, and we've made good progress on our core business priorities. The company is in good shape. We've got a lot of hard work to do. I think Caroline said we've got a lot of wood to chop this year, which is absolutely correct, as we strengthen the business and execute on our plans. And I'm really excited about the opportunity ahead of us. We have a strong business model, a fantastic SJP community, a refresh strategy that gives us clarity around our future priorities. And we're ideally positioned to deliver for all stakeholders in the year ahead. So I look forward to chatting to many of you over the course of the coming days. Thank you very much indeed for your continued support and good luck with everything going on today. Thank you.