St. James's Place plc

Good morning and welcome to our 2025 full year results. I'm pleased to report a year of significant progress for St James' 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, personalised 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 her 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 UK 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 high 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 normalised 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 £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 fund net of all charges. Together with net inflows, this drove funds under management to £220 billion, up £30 billion year on year. Now to put that into context, it took SJP two decades to reach 30 billion pounds of FEM after we were founded in 1991. Now we've grown our FEM by that amount in a single year. That's the scale we operate at today as the leading financial advice business in the UK. Strong investment performance together with growth in new business contributed to an underlying cash result of £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 £25 million from the provision held with respect to this work on a pre-tax basis. This equates to £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 £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 funder 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 advisors 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 advisors, and it has grown to over 1 billion pounds of thumb at the end of the year, just two 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 advisors 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 £462 million for the year, which is an increase of 3% on 2024. There are three key drivers of this result. Firstly, average FUM increased by 12% year on year. This has increased the net income we earn from FUM to £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 53 billion pounds of gestation fund. And once this is fully mature by 2032, it could contribute in the region of 300 million pounds 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 six 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 experience 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 £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 zero 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 and the cash result increased by 5% year on year to 306 million pounds in line with our guidance. This guidance continues to apply for 2026. 2025 charge structure implementation costs were 53 million pounds, bringing the total post-tax amount spent on implementation to 119 million pounds. This is in line with our guidance that we expect total costs to be towards the upper end of our original 105 to 120 million pound 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 recognised within our underlying cash result. For 2025, these releases amount to £82 million post-tax, and so our cash result for the year is £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 in 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 three of the financial review in this morning's press release. At the end of the year, we had approximately £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 £271 million, which we refer to as free liquidity held at Group Centre. You can see a full reconciliation between total liquid assets and free liquidity held at Group Centre 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 group center, we've 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 18 pence per share in annual dividends with the balance distributed through share buybacks. This means ordinary shareholder returns are £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 £19 million of shares as we return the post-tax release from the ongoing service evidence provision to shareholders. This means that the share buyback programme, which will commence shortly, will be for £123 million. Adding in the £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 £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 six pence per share and that the interim buyback will be a third 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 £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 UK. Analysis suggests that UK individuals have £3.5 trillion in invested assets and an additional £2.1 trillion in cash savings, totaling £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 over-saved and they're under-invested. Recent analysis shows that approximately 15 million people in the UK are holding an estimated £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 UK through great financial advice represents a huge opportunity for us, our industry and the UK economy. Yet there is an advice gap today with only 9% of adults in the UK 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 advisors. Advisors 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 advisor-client relationships are invaluable. Relationships enable advisors 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 their 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 advisors 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 a prospect for improving efficiency in how we and advisors operate, while enhancing client experiences and delivering good outcomes. Technology will strengthen relationships between clients and advisors, 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 UK 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 allows 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 organizations. 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 advisors. Ensuring we continue to provide a leading advisor offering with advisors 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 advisors 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 advisor 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 advisors 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 advisors across the UK. We'll lean into these as we continue to expand and enhance the suite of technology tools that are available across the SJP Advisor ecosystem going forward. This will improve the great service advisors 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 capitalise on the compelling market opportunity in UK wealth management, where the need for financial advice is growing. We are the scale operator and the home of financial advice in the UK. We're privileged that over 1 million clients are already securing their long-term financial futures through the power of SJP's professional advisors 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 in to our live Q&A, which will kick off at 9 a.m. 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 Wood, 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' 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 results of 462 million pounds, up 3% year on year and 4% ahead of consensus. Underlying cash basic EPS of 87 pence 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 313 million pounds 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 enable the successful launch of Polaris Multi-Index. This has broadened client choice and grew to over 1 billion pounds of FUM at year end, just two 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 £25 million from the provision today, taking total releases to £109.5 million for the year. We are now deep into the operational delivery phase and are on track to complete the programme 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 100 million pounds 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 dividends expected to be at least 28% of the underlying cash result and buybacks are remaining 42%. That's how you get to the 70. Our priorities for 2026 are completing our remaining transformation programs, expanding the range of technology tools, including those which are AI-enabled, making those available to our advisors 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 advisors, 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.

Thank you. Our first question comes from Andrew Lowe from Citi. Your line is now open. Please go ahead.

Hi, thanks for taking the question. I wanted to ask on Citi, 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 B2C platforms who in time might be able to offer AI-led financial advice as a sort of corollary to that would be really helpful to hear a bit more colour on the AI tools that are operational today, what we might expect in the next 12 months and how much this could improve your advisor productivity going forward. And the second question was just on the advisor numbers which fell by 0.4% in the second half of 2025. Could you please give a little bit more colour on on the productivity of your departing managers and just any comments on the outlook for advisor numbers going forward would be really helpful.

Andy, good morning and 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 advisor-client relationship and the longevity of that relationship. Because research that 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, etc., I think when we also think about AI, I think it's also important to bear in mind that advice in the UK is a highly regulated and a high trust service area. 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 positive role is in enhancing advisor 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 advisors back time. And I think that's where the deep vein is going to be for the next few years for our advisors, for us, and for the whole profession. I think the more we can give time back to advisors to really focus with their clients is going to be absolutely, absolutely key. I think by virtue of our size and scale at St. James' 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 advisors, the vast majority of these folk are phenomenal entrepreneurs, not just in being great advisors, but also in terms of finding solutions in their own businesses and how they make themselves more efficient. So within our 5,000 advisors, 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 blessing 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, is the innovation isn't just happening at the corporate level. It's also happening within the advisor 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 the integration and really make sure it plugs in place properly with the rest of our kit. So at the end of the day, I think AI will enable greater productivity. It'll enable advisors 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 or serving clients. It's being there for clients when they truly matter. Sorry, I'm rabbiting on, but I'm conscious that this is a big topic. And therefore, I'm probably going a little bit fuller in the onset, 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 an advice assistant, which kind of harnesses the data in Salesforce and can produce suggestions on plan 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 advisors 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 gets sent to the client, notes that gets 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's aligned. And what that does is that saves, you know, huge amount of time for every query that otherwise might be done through a call center and enables a call center operators to really focus on considerably more complex matters. So we're trying to introduce, or 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 advisor numbers. Yep, advisor 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 advisors that have left us as a result of that, their productivity was significantly below average productivity on both gross flows and from a fund perspective, which is why you haven't seen any real shift in productivity. If anything, productivity, 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.

Thanks, that's really helpful.

Thank you. Our next question comes from Andrew Queen from Autonomous. Your line is now open. Please go ahead.

Good morning, everyone. Just a couple of three questions. Firstly, can you say anything about trading so far in Q126? 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's talking about some of it retaining if you payouts. You're talking about retaining somewhere between 240 and 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, I think client 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?

Great. Andrew, hi, good morning. Thanks for those questions. So trading, first off in 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 taxi rent five 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 centre 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 it'll 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 early. We're very pleased to have increased the level of the payout. We think the composition, the two sectors of it in terms of dividend and buyback are important and are weighted appropriately. 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 271 number grow as the business grows. We are a growing business, and 271 for a business with 220 billion and a million clients under management feels appropriate for this size and this scale. In terms of client growth, really interesting one, Andrew, because client growth is, 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 is 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 advisors 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 advisors, when we did a survey with them 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.

Great. Thanks.

Thank you. Our next question comes from Naseeb Ahmed from EBS. Your line is now open. Please go ahead.

Thanks. Three questions for me. 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 off, 25 were still high. Relative to history, they're kind of stabilizing, but to a high level. When 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 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? Thank you.

Steve, thank you for those questions. AI, the simple comparable charging, I'd have hated to 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' Place. 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 advisor firms who's been working on some great kit and has got some great AI kit that helps facilitate and improve efficiency on 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, you know, 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, yeah, I spoke to them, but I didn't want to complain. So it's not a legit complaint. And others, you know, kind of aren't even our clients. So 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 normalised level. On regs, 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 advisor 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 in government and demonstrated a willingness to engage with industry and listen and with trade bodies and, you know, take views on. So I'm cautiously optimistic that if this comes through, it should come through in a good guise. But there's 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 UK take advice today, the market opportunity is so big for all of us in the UK. I truly believe it is one of the really few growth areas in financial services in the UK, the element of wealth, getting people to invest. So if government, the regulator, we, all the players in the sector, DTC or otherwise, are getting people to invest rather than save, That's going to be fantastic because there are three big gaps in the UK economy. There's an advice gap, there's an effective 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 risks 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.

Thank you. Thank you very much.

Thank you. Our next question comes from Ben Bathurst from RBC Capital Markets. Your line is now open. Please go ahead.

Thank you. Good morning. I've got questions in three areas, if I may, as well. Firstly, Mark, in your pre-recorded remarks, you mentioned you'll be looking to improve reporting of financial performance. I think you said before half year 2026 or for 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. And secondly, on flows, you saw it 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 three quarters of FY25? And then sort of related to that, 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 the draw rates from pensions to tick up over the next year or two in light of those changes. Thank you.

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

Charles. Hello, Ben. Very good to chat about this. Yeah, 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 liquidity metrics. New section on that, and hopefully that answers some 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 have 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'd necessarily change 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, Um, I think from memory about historically about 4% of, uh, individuals just across the market, uh, paid inheritance tax. And I think the ONS in light of the changes the government brought about thought that that might go up by a percent and a half, maybe 2%. So may call it 6%. So it's not for everyone, uh, thankfully. Um, but what we are seeing, I think is that, um, 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 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'd 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 is, 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 uh again because we cannot have a third year of further speculation um so get out of the blocks and just try and close that down uh early as possible please thanks ben thank you for that thank you

Our next question comes from Enrico Bolzoni from JP Morgan. Your line is now open. Please go ahead.

Yeah, good morning. Thanks for taking my questions. 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 advisor productivity and do wonders internally in terms of reducing costs and 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, you know, in theory would pick up advice in 10 years from now. Let's make an example. In the UK, 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 D2C platforms, which is another where, by the way, you don't want to go, will be gradually see the benefit of AI in their existing D2C 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 advice when they're in their 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 D2C platform. So are you concerned by that? And would you consider... be a bit more explicit in guiding your advisor to recruit, so to use the additional capacity free by AI to recruit younger clients, so 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. Thank you.

Enrico, hi, 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. I think by virtue of the fact that our average advisor is considerably younger than the average advisor in the market. Actually, what we're finding is the average age of our new clients is actually coming down. So over a third of our new clients are under 40 years old. which is fantastic. So we are effectively, the advisors 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 understand do the right things and getting the right behaviors in place. As my 17-year-old son said, Dad, SJP, it sounds like you guys are financial PTs, financial physical trainers. You get people to do what they should do. When left-hand devices, they may not do it. So I think the element of we're getting more and more younger clients, our advisors are 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. So it's not 100%. People have money in DTC, but they understand what they get from St. James's Place, what they get from the advisor, etc. And in time, what we see is actually more and more 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, that talks 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 folk 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 two months, have gathered effectively a billion pounds 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.

Thank you, Conor.

Thank you. Our next question comes from Gregory Simpson from BNP Paribas. The line is now open. Please go ahead.

Yeah, hi there. Good morning. Two questions on my side. Firstly, wondering if you could share any comments on how you're seeing advisors 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. Does it really get anything into the flows? That was the first question. Secondly, can you provide a bit more of an update on the high net worth push? What's the timeline? Would you have advisors that are more directly employed by SGP in this model? And what do you need to add on the product and investment proposition side? Thank you. Great.

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 advisors, as I mentioned, I think earlier on, are incredibly busy engaging with with clients. So they are absolutely connecting. Very, very busy. Case count is very strong at the moment. it's all looking, you know, 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 is, 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 advisors and clients in this area. We have, I think now, as of year end, 10% of our FUM is effectively in the high net worth segment, so a slight increase on last year. The team are working very closely with some of our advisors who specialize in the high net worth area. We've had some offsites 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, and 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 advisors who are very interested in, 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, with a greater support, they'll be able to do even more in and around this space and they're all looking to grow their businesses. Um, so I think that's probably the routine rather than us trying to kind of think we're going to have our own employed advisors focusing on the, uh, on the high net worth space. Uh, So I'm excited about it. In reality, I think it'll 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 companies. the high net worth opportunity because I think it is so real. So you've picked on a real pet topic of mine. Thank you. Thank you.

Thank you. Our next question comes from Larissa Van Deventer from Barclays. Your line is now open. Please go ahead.

Thank you very much and good morning. 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' Place's 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 2027, or is there a statute of limitations that needs to run before you will be able to finalise how much of the provision is needed? And then the last one, AI, a very topical source 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?

Thank you. 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-to-funds. They're 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-to-funds. less frequent rebalancing in a MPS 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. Um, it looks like, you know, the latest, uh, NPS is out there is kind of got a mixture of kind of active and passive, et cetera, um, along the way. Um, and effectively at the moment, Polaris is, you know, kind of, uh, we have, uh, Polaris, where there is some kind of systemic, systematic activities in normal Polaris and Polaris multi-index work through 14 index funds. So the 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 advisor demand and pull. It's been great to hear some advisors 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 service time period of going back to 2018 was effectively linked to statute of limitations. And that has 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 FOS and complain about X, Y, Z, 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 one. 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 three 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 of you know on the phone, and I won't insult you, you know the pressure that that's under. In terms of platforms, we see 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 advisors in the UK. The regulation is very high in the UK 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 I mentioned earlier, as we do more in the high net worth space. that might give rise to slightly fewer new clients, but larger firm with that more sophisticated, more challenging needs, and therefore a bigger role for the advisor 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 UK adults take advice. We have so few advisors in the UK. An interesting stat I saw is that SJP contributes 52% of all new advisors 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. Thanks, Larissa.

Thank you. Thank you. Our next question comes from Fahad Changazi from Kepler Chevro. Your line is now open. Please go ahead.

Thank you for taking my questions. I've only got just two left. Could you give an update on your target of doubling the 2023 underlying cash results by 2030? I know it's only two years in, but in terms of underlying assumptions on costs, AUM, et cetera, where you are standing now versus the target. And finally, just to 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? Thank you.

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 re-broker that this early on because while we have had had a much stronger start than I think we all thought and we all expected. I'm conscious that markets are not linear, and there's quite a way to go between 20, 30, et cetera, along the way. From controllable costs, so 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 advisor's business. There will be some that will sit in us. But at the moment, our focus is in terms of trying to make our advisors as productive and supported them as possible. One, to make client interactions and advisor 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 advisors' 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 communication. how we actually simplify what we do internally here at the corporate and the role that AI can play. I know that folk 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.

Thank you. Our next question comes from David McCann from Deutsche Bank. Your line is now open. Please go ahead.

Morning, Mark. Morning, team. So, yeah, three from me, please. So, first one on the capital distribution to the new policy there. Can you just give us some colours to what the thinking was with the bias towards the buyback, the 40-60 in favour of the buyback? What was the thinking there rather than a more dividend biased amount? That's the first question. Secondly, thanks to the new disclosures on the liquidity, that potentially is quite useful. I just wanted to know how you're still thinking about the business in terms of the actual capsule. Historically, you've focused us towards MSB and the surplus around that as being the preferred metric rather than solvency too. But if we're thinking about the actual capsule and the free capital in the business, how should we be thinking about that today and what is the level? Because I think that disclosure doesn't appear to be in the statement anymore. And then finally, looking forward a bit more, clearly the business is in much better shape than it was when you came into the business market and lots of studying and the ship's been done, which is great. Looking at the business going forward, 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 acquisition still firmly off the table off the agenda or is it something that you might consider more yeah now the business is in better shape again um a lot of things have been clarified and you're kind of moving forward there's yeah the cash generation that's coming through and so forth be just curious as to how you're thinking about that right uh david thank you good to talk to you um let's take them in order in terms of distribution um

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 uh cash dividends and in the buyback so we we the board was comfortable that that would um respond to um 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 uk market and can can be very powerfully deployed and we were keen to deploy it on an ongoing basis rather than a discrete basis And on capital, 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? Yeah, that's right, Mark. Yeah, 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 2 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... That's not 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 too. As Mark notes, the management sovereignty buffer, the MSB, which has been replaced by the MCCA, still lives and it features in our capital and liquidity portfolio 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 gold. 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 folk, it creates huge disruption and huge distraction. There's a lot of distracted and disrupted 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. Thank you.

Thank you. Our next question comes from Charles Bendit from Rothschild & Co. Redburn. Your line is now open. Please go ahead.

Hi, Mark. Thanks for taking my question. 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 advisor experience. I'm just keen to understand if you think AI might drive advisor headcount to shift 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 advisor productivity tools could make it easier for independent advisors 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 advisors? 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 depths and the integration of your own tech stack? And then my second question is just wondering if there, 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. Thanks.

Charles, thank you. Two really, really interesting questions. the AI piece and advisor experience, et cetera. I think a few things stand out, and this is kind of what advisors who come to us and advisors who 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 260 million pounds 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's 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 advisors, effectively saying that we guarantee any of 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, it's 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, you know, 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' Place. And an IFA just can't do that. As for the cash piece, 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. It's 5.7 billion in Flagstone. Just to remind everybody, that is not included in our FUM number. We are working with Flagstone and 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' 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 will to live during that journey. What we're looking to do is to streamline that so it can be a single click across from savings to investment because, dare I say, as we all know, I think, People are over-saved in the UK, as in the US, 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, Joss. Thank you.

Thank you. 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 in 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.