Operator: Hello, and welcome to St. James's Place 2026 Half Year Results Q&A session. My name is Carla, and I will be coordinating your call today. . I would now like to hand you over to your host, Mark FitzPatrick, to begin. Please go ahead when you're ready.
Mark FitzPatrick: Thank you, and good morning, everyone, and thank you for joining us. Before we open for questions, a few brief opening remarks from me. Firstly, I'm very pleased that we've achieved a strong set of results for the first half. Good operating and financial performance, continued strategic progress and further growth in both our client and adviser base. We delivered positive net inflows of GBP 2.7 billion, grew funds under management to a record GBP 240.8 billion and continued to see strong engagement between clients and advisers. These outcomes reflect the enduring demand for trusted financial advice and the strength of our advice-led model. We also continue to make good progress on our strategic journey. Over the last few years, we are focused on strengthening and simplifying the business through a series of major programs. During the period, we made substantial progress in our historic ongoing service evidence review. And this has enabled a further provision release, which we will be returning in full to shareholders through a buyback. Alongside all of this, we continue to strengthen both our client and adviser proposition invest in technology and productivity tools and enhance the pay and benefits and support available to advisers across the partnership. Looking ahead, we remain confident in the long-term outlook for financial advice in the U.K. The advice market remains underpenetrated, client needs to becoming ever more complex and the value of trusted advice continues to grow. As we move through the latter stages of the spending phase of our strategy, our focus is increasingly turning towards the opportunities ahead and the transition to amplify. We believe St. James's Place remains the most compelling place in the U.K. to build, grow and realize value from a successful financial advice business. This enables our advisers to deliver the trusted advice service and support our clients value. This leaves us well positioned for the next phase of growth. With that, let's open up for questions.
Operator: Thank you. We will now begin the question-and-answer session. . And our first question comes from Andrew Lowe with Citi.
Andrew Lowe: I've got two. The first is on your adviser retention rate in the first half. Could you clarify what that was in the first half and how that compares to the 91% retention rate that you saw in 2025. It seems likely to have gone down rather than up, but your adviser numbers are up 0.3% in the first half. And there have been unquantified planned exits from underperforming advisers. Can we conclude that you're doing more lateral hires from other advice firms or has the gap been bridged by a step-up in the number of advisers graduating from the SJP Academy where presumably day 1 productivity may be lower. So any color there would be great. And then the second question is just on your pass-through of your fees to your advisers. There's been a lot of debate on this during the past couple of weeks. And how you are perceived to be retaining more of the adviser fees versus other platforms who seem to be talking about passing through 80% to 85% of the growth fees to their advisers. So if I take the 25 basis points ongoing advice fee the as a percentage of the 80 basis points that you charge your clients that they're retaining your advisers are keeping 70%. But I'm conscious that there may be further pass-through that we don't see in the financial disclosure. So could you just clarify exactly what your advice fee retention is and whether you think that, that figure is like-to-like with what your peers are reporting.
Mark FitzPatrick: Okay, Andy. Thank you. So hitting the topic I expect and we spend a little bit of time on today. I think maybe just some broader comments around the whole element to partner, partner retention in the back and then I will get to those explicit components. Firstly, I think I would say the reality for every wealth manager around the world is the ebb and flow of advisers. We've seen it for decades in St. James's Place, and it's not particularly new. So our partner retention number is running at 90% at the moment. Last year, it was 91%. So it's a marginal 1% delta which for the math, I think, ends up at about 50 advisers in terms of the difference. So it's very much at the margin in terms of what we're doing. We unfortunately lose advisers to a broad range of firms and many retire or leave the profession. However, we also recruit advisers from a very broad range of firms, including IFAs, and we have a phenomenal recruitment team. So the adviser retention levels that we've seen over the course of the first half is -- and additions are a combination of lateral hires, experienced lateral hires. We've done that from day 1, as I said, we have a very, very good team. And if anything, we actually we've recently strengthened the team. Earlier this year, we strengthened the team, we bought some additional [indiscernible] proton because we initiated back in February, our ambition to be able to see the advisers numbers grow from 2027. Therefore, there's normally a bit of a time lag in the pipeline in terms of building up on that. So we've started investing in that piece. And the other component is the Academy. And the Academy over the first half of this year has been very, very busy. We're seeing good numbers coming through in terms of graduation and we're seeing great demand for advice and a real positive reaction to our campaign of trying to encourage more women into the advice profession. So we've been active in that regard and we're seeing real pick up in interest in that for the longer term. But over the course of the last 6 months, the Academy has actually contributed significantly in terms of our advisory numbers. In terms of the broader pass-through component, again, just a little bit of color and context. We set out as part of our strategy in 2024 that one of our key pillars is having the leading adviser offering. And we want to make sure the St. James's Place is the best place for the best advisers to join, develop and build a successful career in business. And we are laser focused on this. Also that the vast majority of our investments of over GBP 260 million over the next few years is focused on improving our offering for advisers and in space. Now no one else in the market is investing in anywhere near the scale. And we think that's also why we have nearly 20% of the U.K. advisers within St. James's Place and nearly half of all new advisers to the profession come through our academy. Now remuneration or adviser pays is one of the components of effectively the offering that we have to advise us. There are so many other components to it. But to answer your question directly, the partner elements that advisers retain of the advice fees we pay, it's about 80%. And I think the figure that's a lot higher than the many folks assume. So it's -- our focus as an organization as an executive team is on ensuring we have the leading adviser offering, ensuring we continue to retain, attract, grow our adviser base because we see the total addressable market is growing in the U.K. There is a huge opportunity. Our growth algorithm, we think factors on two key components, one of which is productivity increases, and we're going to continue to stay focused on that, supporting our advisers in that regard. And the second is adviser numbers. So we're focused on both, and we expect to be able to deliver both over the medium term. So hopefully, that answers your question. Maybe a little bit more fulsome, but hopefully, it just gives everyone a bit of sense of the broader color on how we're focusing on these matters.
Operator: Thank you, and the next question comes from Nasib Ahmed with UBS.
Nasib Ahmed: Maybe I just want to follow up on the two parts that you just made, Mark. Can you give us the numbers? So you've basically hired 500 advisers. What's the split between Academy hires and lateral hires? Is it 50-50, 300, 200? And then on the 80% retained by advisers, I mean, it's hard to get the math. I mean, you've given us the number, but can you -- another way of asking the question would be the 25 basis points that you retain, how much of that is actually consumed in helping advisers on business rates, indemnity insurance, et cetera, right? So just trying to see the 25 basis points revenue margin, how much of that are you retaining net of costs for advice? And then on Slide 24, you showed at kind of the EY chart, which is helpful. Quilter have a similar chart and they've got 1.56% on the 10-year basis with a GBP 500,000 pot instead of the GBP 100,000 pot. So they don't seem to be on the chart, so I don't know what I'm missing there. I don't know if you can comment on that?
Mark FitzPatrick: So I'll ask Caroline to give a little bit more color on the element of the 80% and how that is -- how that's compiled. On the chart, I think we've got 16 competitors. I don't think we named them, et cetera, set out who they are. I would expect them to be -- to have all the usual suspects in them on that way. So I can't comment on what others have done and how they have compiled their numbers. Nasib, on the element to the breakdown of the adviser numbers, we're not looking to kind of give granularity on the academy or the recruitment element in terms of specific numbers other than to say, I think both play an active role. and the ratios shift and change broadly over the course of the years within a fairly tight corridor. So we haven't seen anything majorly change in that regard. But we are looking at that, and we are looking to spend more in the academy in terms of increasing the number of cohorts that we have going in. So over the fullness of time, we'd expect to have more people coming in through the academy. In addition, we'd also expect to have more lateral higher. We think that the new fee structure that we set out in and we've pivoted to in -- from August last year actually means that there are advisers who previously weren't necessarily fans of the old regime in the marketplace who would now be receptive to a conversation with St. James's Place. And then finally, I'm also very confident of the fact that there's been a lot of consolidation, a lot of movement around the market. And not every adviser that's been subject to some of those acquisitions are thrilled by those. So there's an opportunity for us to be able to lift out a few advisers from some of those organizations. So we're spending considerable time and energy around that. So I think it's fair to say that as a team, we are very focused on retention, we are very focused on acquisition, and we're very focused on creating a long-term pipeline full of profession through the academy. Caroline, do you want to give a little bit of extra color on the 80%?
Caroline Waddington: Yes. Yes. So if we look at the 80%, you have to consider, obviously, together all the initial and ongoing advice that we pay to partners plus the allowances we give them. So we pay out 2/3 of initial advice charges to advisers. This one increases substantially to all the initial advice charge when you add the other allowances we pay to the partnership. So that's consistent with what you said under our new charging structure the sort of new business makes minimal profit. When you add in the amount we pay on an ongoing basis, there's two elements to this. There's obviously the 55 out of 80 basis points under the new charging structure. But then you've also got under the old charging structure, advisers got all the ongoing advice fees. So it's a combination rather than specifically picking out any of the specific costs. So you have to take all that together in, Nasib.
Nasib Ahmed: And once you're off gestation, can you just confirm that your -- that 80% become 75% or greater than 75%?
Caroline Waddington: It will be- sorry, say that again, Nasib.
Nasib Ahmed: So you're paying out 100% on all of the that's in gestation, but once that runs off in, let's say, 2032, that 80% becomes 75%?
Caroline Waddington: It reduces -- not 75%, but it reduces a little bit, yes.
Operator: Thank you. And the next question comes from Andrew Crean with Autonomous.
Andrew Crean: Three questions, if I can. Caroline, on Slide 8 you make the point that results were lower in the first half of '25 because of the lower initial ongoing margins. Then you say whether this affect to full year 2026 will depend on how markets develop in the second half. I just wanted to explore the implications of that. If markets are normal, is the implication of what you're saying that the second half profits will be higher than the second half '25? That's the first question. Second and third question is just can you update us a bit more on the high net worth initiative and also on the Flagstone cash transmission. If I'm transferring cash now from Flagstone into St. James Place, how long will it take me?
Mark FitzPatrick: Perfect. All right. Well, why don't I start with the high net worth piece and the Flagstone and then Caroline can pick up on the second piece. So high net worth will continue to be part of our strategy. Over the course of the last 6 months, we got a dedicated high net worth program and leadership team. They've begun a significant increase in high-quality private client events to be able to deepen engagement. We're expanding our central adviser support to enhance the servicing of high net worth. We've launched a pilot high net worth training program with one of the largest practices, paving the way for a broader rollout next year and increasing the volumes of high-quality practices serving the complex high net worth client. So the high net worth component continues to be a very important aspect. And I think our investment in this area and the energy and commitment of resources, we think will deliver more consistent and somewhat differentiated high net worth experience. In terms of Flagstone, so in the second half of this year, we are expecting to dramatically change, and we're working closely with Flagstone on dramatically changing the length of time it takes to move money from Flagstone into St. James's Place. So I would expect we'll be able to report that, that is all done and dusted when we chat to you again. It's a key component of the engagement with Flagstone. In the meanwhile, with Flagstone, what they've done is they've massively facilitated take-on procedures. So most of the information is now is autopopulated from across from St. James's Place. And the rates that clients are getting has been -- has improved. The level at which clients invest has been lowered a bit to make it more accessible. And we're seeing an increase. I think it's GBP 5.9 billion looking at the team, yes, up from GBP 5.9 billion now in Flagstone. So a meaningful increase. Clearly, just talking about clients in the markets generally U.K. markets, confidence in global economy and the uncertainty and wishing to have some in cash. And this is an incredibly effective and efficient way of being able to get your cash to work a little bit. But ultimately, as we all know on this call, the U.K. has a broader issue and that people are overstated and underinvested. So at least through Flagstone, our advisers have great visibility of what's in Flagstone and as part of their general engagement with clients are exploring the size and scale of what's in Flagstone and what possibly could be, should be invested because the opportunity cost of being in cash versus being in the market is quite significant, as I'm sure you're aware. Caroline?
Caroline Waddington: Yes. Thank you, Andrew. Yes, look, I think I'm actually not sure what the normal market is anymore, actually. But that aside, if we think it's something normal second half of the year, yes, we would expect probably that half 2 '26 profits will be higher than half 2 '25 profit. But as I said, it all depends upon market.
Operator: And our next question comes from David McCann with Deutsche Bank.
David McCann: Two for me, please. The first one to follow up on the adviser retention piece. Obviously, a few questions you had already about the split of shareholder and adviser economics. But I just wanted to drill into that a bit more. Obviously, the question is really focused on what is the current split. But the question really is, do you see this changing going forward given the comment you made about the competitiveness of the market and obviously what we're all seeing. And adjacent to that point, are you still expecting roughly flat overall adviser numbers over the whole year? And then the second question is on flows more generally. I think it's fair to say they remain at the softer end, I think, where most people would like to see them. So maybe you can drill into why is that the case? What do you think it will take for them to positively inflect? And indeed, do you have any medium-term aspirations of where you'd like them to be for the business of your size?
Mark FitzPatrick: David, thank you. In terms of adviser retention numbers just generally, I think, as I said at the end earlier on, the element of advisers and our leading advice offering is fundamental to who we are as an organization. So we are laser-focused on ensuring that we have the very best offering to advisers in the round. So when we talk to partners, advisers about why they join us, why they stay with us, they tell us the academies are so valuable to them. the element of really joining a community. They are not alone, isolated. They're part of something much bigger, the ongoing technical support, training advice, et cetera. We also have the highest concentration of financial -- chartered financial planners in the U.K. So it's another way of saying we have the highest quality financial advisers, the unique investment management approach, the BSP program, kind of growth and succession component. We also guarantee our advisers' advice, which is really important for the advisers and their clients, gives them great confidence and a massive recognizable and supported brand. All of those components are part and parcel of what the leading adviser offering component is. And we will ensure that we continue to have a leading adviser offering. So we're constantly looking at it, constantly looking to see what we need to do to ensure that we are providing the best all-round offering. Part of that is around the element of how we support around technology and how we make the overall profitability of our advisers and partners' businesses better. So the element of how we do more for them, how we facilitate, how we support them will continue to be really, really important. As for adviser numbers going forward, I think our ambition would be that we would look to see kind of numbers flattish, as we said at the beginning of the year. And in 2027, we'd look to be seeing growth kicking off again in terms of adviser numbers based on the element I mentioned earlier this morning around the fact that we have invested further in the academy and we've invested further in our recruitment team and all of these by definition, have got an element of a lead time. So I'd expect to see them starting to come through later this year, early next year in terms of the contribution of that investment. Caroline, do you want to comment on the flows, please?
Caroline Waddington: Yes, absolutely. Thanks, David. So look, if I take the flows apart into the component parts, I mean, if you take the gross flows, we attracted GBP 10.5 billion of gross flows for the half, which is consistent with our record result, which we achieved in half 1 2025. So -- and that's despite the sort of heightened macroeconomic and sort of geopolitical uncertainty during the period. So we're happy with that. But advisers are busy. Case volumes are up 9% on H1 2025, although case size is down a little bit about the same amount. So that's what I'd say on inflows. I mean, outflows in absolute terms are up because that's given the strong sort of FUM growth. So average FUM in H1 2026 was up 18% on the previous half or half 1 but outflows only increased by 16%. So our retention rate for the half was 95.4%, up from 95.3% in last year. So it's above our 95% ambition. And total outflows also fell period-on-period from 6.9% of average FUM last year to 6.7% this year in half 1. So that's sort of it. But then if you come to net flows, which we know is obviously the sum of the 2 with average FUM higher 18% higher than a year ago. It's obviously a really good result for our clients. We're pleased with that. But inflows don't scale to the same extent as outflows, which generally increase with FUM. So this dynamic is obviously reflected in our net flows. But they are in the 2% to 3% of opening FUM, which is sort of our expectations right now. And so that's good. But I think as you go forward, to your point going forward, obviously, there are 2 factors we look at here, obviously, the partner numbers and adviser numbers and obviously, productivity, and we're switching our attention Academy and national hires, we've invested into. And also we're back into Amplify, we're continuing our work and increasing our work on the productivity work within Amplify. So what I would say is the 2% to 3% is definitely not a cap.
Operator: And the next question comes from Christiane Holstein with Bank of America.
Christiane Holstein: My first question is just following on from the discussion on adviser retention, sorry. So I wanted to ask, there's been a lot of media speculation about a potential exit from one of your flagship practices, Sovereign Wealth. I was just wondering if you're able to provide an update here and whether they've actually provided notice to leave? And then how do you also intend to retain advisers and FUM in the event of a practice or partnership leaving? My second question is relating to AI. So I was just wondering how you think about shared economies of scale from your productivity benefits relating to AI? And how do you also intend on reinforcing your large-scale advantages versus peers? And then I just had a follow-up question as well on net flow expectations. So I know you were talking about how you've done quite a bit in terms of the academy and improving productivity. Pricing is obviously lower now, remediation is pretty much behind. So in terms of accelerating this 2% to 3% net flows, given it seems like a lot of the building blocks are in place, how long until you expect to see this start to improve? And yes, what are your expectations maybe over the more medium term?
Mark FitzPatrick: Okay. A nice cross-section of questions, Christiane. So firstly, unsurprisingly, we're not really going to comment on any individual partner business within St. James's Place, if you don't mind, I'm sure you'll understand the reasons for that along that. I think just a couple of things just to remind or maybe inform people about. Firstly, when an adviser leaves and as we say, it is normal that we will lose some and we would much rather not lose advisers, but we understand everybody's got their own personal reasons for that. It doesn't mean that the clients leave. And the clients often find that actually what they have with St. James's Place is incredibly attractive for all the reasons that I set out earlier in terms of investment performance, in terms of service, in terms of support, in terms of the brand, the advice guarantee, all these different components. They really matter to clients. And so we generally find that we retain on average kind of 50% of client fund. Now another key component is that when a partner that has multiple advisers in a practice leaves, we do have those as well. And as I said, we don't try and encourage that, but we much rather than stay. But if they do go, we tend to retain at least 50% of their advisers. That's just what the stats are. So the element of -- there is some dislocation, there is kind of time and attention that needs to be spent, we would much rather not have it. But it's not an immediate flow that if somebody leaves all their FUM and all their business leaves with it. And that, I think, just talks to the testimony of the strength of relationship we have with multiple partners and advisers and with clients as well and what is that value. On the question of AI and technology, and thank you for the question. Shared scale of economics and economies of scale and the like, scale benefits for us really coming through in a few ways. One is in terms of our ability with fund managers to be able to extract greater margins. And unfortunately, you and others on the call will be just generally seeing that across the sector. Two is an element of -- because of our size and scale, most of the big global IT brands work with us, talk to us. And because of our scale, we can negotiate very good prices for either ourselves or for and for the partners and advisers, making sure that they pay well below rack rate for any of the kit that they use or that they need, whether it be conventional technology or whether it be some of the newer AI capabilities and technologies. And effectively, the scale benefits we look to put back into the business. So the scale benefits and just general kind of efficiencies are part and parcel of how we've been able to pay for and fund the elements of the changes we made to the fees that we're paying to the advisers from later this year and for next year. It also going forward, I think, will be how we will look to reinvest back into the business in terms of technology because the pace of technology is constantly evolving. It truly is exponential, not linear. And therefore, I think how we continue to evolve our technology stack and how we continue to ensure that advisers get the most streamlined process as possible is going to be really, really important because ultimately, what advisers love doing is being in front of their clients. The admin piece just generally speak to any adviser around the world. That's not why they do what they do. So wherever we can minimize that component, maximize the opportunity to spend in front of clients because that's where the buzz, that's where the adrenaline, that's where the rush comes from. So that's the piece that we are really laser-focused on. We have mapped out the client journey. We've mapped out the adviser journey. We understand where the pain points are. And one by one, we are knocking these on the head to give the advisers more time, greater efficiency and great ability to improve. And part of the pilots that we've been running have shown increases in new client acquisition for those parts of the business that have been part of the pilot. We've seen for some of the smaller practices where they're using some of the AI, a significant uptick in terms of client numbers and a significant increase in terms of productivity. So as we roll these new technology and capabilities out throughout the partnership and then as we help them optimize that technology into their processes, into their systems, we'd expect to see the advisers be able to do more and actually be able to support their profitability one of the earlier points. And then on the net flows expectations, one of the things that we are tracking quite carefully is through partner productivity. And partner adviser productivity, we have seen from a case count increased quite significantly. So last year was a very busy year. We all know why it was a very busy year. It was a very busy year. And last year -- first half last year and first half this year, we've seen a 9% increase in the number of cases that advisers are talking to clients about and engaging with clients on. And the case size is down 10%. And largely, I think that's a function of the confidence in the economy. And we're seeing a lot more in Flagstone, as we mentioned earlier, talking to Andrew Crean, answering his question. So we do think that actually the advisers are very busy. When I talk to them, they tell me how focused they are on what they're doing and how they're growing their practice, how they're looking for new advisers and how they really feel they're making a difference in society. And to me, that's why I'm here because I want to facilitate and enable more of that because what we do, what our advisers do matters. It's really important. It helps people's lives. So net flow expectations over the medium term, I would expect them to start pushing through the 3% level on the basis, again, we need to be very alive to what happens in the economy, what's happening with confidence, et cetera, because we don't operate in a vacuum. But we are moving into the Amplify phase next year. The Amplify phase is a serious growth phase. You've seen the consensus numbers in terms of the profitability. We're looking to continue investing in the firm. And St. James's Place is very different from what it was a year ago, and it will be very different in a year's time and in 2 years' time. We're getting better and better at what we do.
Operator: The next question comes from Ben Bathurst with RBC.
Benjamin Bathurst: Question on two areas, if I may. Just on the flow outlook and trying to tie that back to some of the adviser growth discussion this morning. I wonder, do you think that the high-profile departures that we will be reading about will be noticeable in the net flow results in 2027 just in terms outflows or given the movements you're talking about and the sort of the general ebb and flow, should this effectively be a wash given that capacity is expected to be constant and the guidance around growing the adviser numbers next year? And then just secondly, on the BSP process. Can you provide some color on how that process typically works for larger firms? How do you mitigate the complexities setting up larger books of business to help attain those assets? And is that complexity playing any part in any of the higher profile adviser movements that we've been reading about recently.
Mark FitzPatrick: Thank you for those 2 questions. I'll ask Caroline to pick up the BSP process, BSP World reports into her. So she's all over it. In terms of net flow results for next year, I mean, there's going to be so much more at stake than necessarily a number of advisers leaving. How the economy does, what the government does in terms of any budgets and the like is going to be a real factor and just general consumer confidence, I think, is going to be -- are going to be very real elements. Then if you think of the stats I gave just in responding to Christiane's questions on our retention of FUM generally and our retention of advisers when a partner leaves with the number of advisers that if you get into that world, you effectively say that quite quickly, you're talking more like 25% of the FUM that may be at real risk of an outflow. And as you can imagine, we are very keen to try and retain as much of the -- as many of the clients as possible. We have lots of clients who do say, and we'll continue to try and support our clients if they wish to stay. Clients are free to move as advisers are free to move. And therefore, like in your business, every day, the IP walks in and out of the door, we need to create an environment, a culture, community and environment that people want to be in. And that's where we are laser focus. That's where our time, energy as an executive and as a Board is focused on On that piece. Caroline, BSPs.
Caroline Waddington: Yes. No, thank you for the question, Ben. I am very passionate about this area. It's one of our big USPs, and it's absolutely fantastic thing we have here. So we're spending a lot of time and energy and efforts on this. The short answer is no, it doesn't -- it isn't a problem for larger practices. We work very hard. We're doing management buy-ins, management buyouts, employee ownership trust. We have a succession consulting team we've set up that now works with businesses like the real world. If we have time to work with people, we can do basically anything we can work with teams on any of those measures. We've got a great corporate finance team. We've got great relationship with our lenders. We've got a lot of people who can work through the different problems that come with larger businesses. But to give you some real live examples in the first half, we did our biggest BSP ever, which sold one of our top 10 businesses into another one. So that's the biggest one we've done. And also, we've also -- this half, we had a smaller business buying a business which I think was about 3x bigger than it. So we're also helping businesses. You can have things like that. So absolutely not. I mean, things -- the bigger they are, the more time it takes, but we have all the people, the funding and the ability to do that. So it's exciting times, and we're continuing to evolve that proposition.
Mark FitzPatrick: Ben, just a bit of -- thank you, Caroline. Just a little bit of an adjunct on my response to your first question as well is feedback we've had from the partners off the back of the announcements on Friday last week have been incredibly positive. And partners and advisers up and down the country are saying that they plan on using the catch-up payment that we will pay them in March next year to invest back into their business in terms of capability, in terms of advisers, in terms of growing their business. So there's a real confidence in the partnership in terms of growth. And every quarter, we are releasing new and improved technology and elements, which are giving people and giving our partners and advisers greater confidence in our ability to get things done so that we can progress and we can make their lives easier. So all of that should support the earlier message that I gave as well. But thank you for those questions, Ben.
Operator: And the next question comes from Gregory Simpson with BNP Paribas.
Gregory Simpson: A few questions from my side. Firstly, are you seeing any behavioral changes or different client conversations around pensions given the inheritance tax changes going on next year, just where it's a big part of your flow base? Second question is, I wanted to ask if you did see a pronounced shift into index funds like some other advice businesses have seen in the U.K., how would you see that impacting your net profit margin from fund? And then finally, just on that 50% retention rate of clients and advisers that do leave, just wondering, do you think you can proactively increase that over time through kind of better efforts in connecting advisers with clients and so on?
Mark FitzPatrick: Greg, thank you. So the world of advice has become more complex because of the inheritance tax changes, which land in April next year. So we are seeing advisers, partners talking with clients where they have a large pension fund and engaging with them on how they -- and what they might do that might be different from the original plan before the tax rules changed. So there's undoubtedly been a degree of a shift. I don't want to tell you what necessarily what the shift is because that might be a tantamount to giving you financial advice, and I've got 5,000 experts who can do that incredibly well. But suffice to say that actually, the element for many folks actually use the pensions in terms of what's been done. In terms of index funds, we have seen an impressive take-up on Polaris Multi-Index since launch, launched in October last year. It now stands at GBP 4.6 billion. Some of that is new money coming in. Feedback from clients has been overwhelmingly positive. Many clients have been asking for something like this for some time. So it's been great that we've been able to give it to them on that particular patch. The margin, the profitability of Polaris Multi-Index is appropriate, and we don't feel that it would necessarily be a drag in terms of our margin because there's quite an active asset allocation layer that sits above it. And then finally, in terms of the 50% retention, let me just elegantly say that we're not sitting on our hands. We will do and we will engage with advisers, partners, clients to try and make sure they understand the direction of travel that we are taking, what we're doing and why we believe that St. James's Place is the best place for them to grow and run a business regardless of what competition may or may not be offering. So the environment is more competitive. There are -- there's more consolidation happening, and I expect that to be a case. In light of that, we are going to be active in the market as well as we have been for the last 34 years.
Caroline Waddington: I'd just add on that, Greg, on the index fees, obviously, it's our fund manager that were our cost benefit comes from. We can use our scale advantage and work with their scale advantage, and that's where we get the benefit of the value on those funds.
Gregory Simpson: Okay. Can I just quickly follow up, actually all the changes around adviser remuneration in the last week or so. Do you see that as being kind of fairly neutral to the -- that net margin kind of guidance?
Caroline Waddington: Yes. Yes, it's within that. Any funding was done within efficiencies we've made within the business margin, the guidance still stands. The margin guidance still stands.
Operator: . And our next question comes from Alex Powers with KBW.
Alexander Bowers: I had 2 questions from my side. Just firstly, a number of firms obviously scaled very successfully on the SJP and [indiscernible] historically and now being poached by consolidators. It feels kind of logical that consolidators will continue to target these top firms within your business. Just interested to hear can you give us any color on kind of conversations you've had with other big partner firms within the SJP network and how you're kind of responding to the threat? The second question is just around the kind of size of new partner firm you're looking to bring into the network. Given you've lost some large firms, are you looking to replace these with kind of like-for-like size firms? Or are you happy to add smaller firms and allow them to scale?
Mark FitzPatrick: Thank you. I think it's fair to say, Alex, we have a very active program of engagement with our firms within St. James's Place, and we will continue to have a very active program. We have a number of consultation groups where we consult with partners and advisers on various matters before we decide on them. So we're trying to do as much as possible with the partnership rather than to the partnership. and ensuring that what we do lands well is clearly understood and is really focusing on the things that matter to the partnership. So we have a very active line of dialogue, always have, and I expect we always will because it's our USP and you look after you protect and you polish your USP. So we're very, very focused on that piece. In terms of size of coming in, we have and have had practices of all different shapes and sizes coming in, et cetera, along the way. Our existing firms are growing. We have a good smattering of firms that are very large, some that are medium-sized and a lot that are in the smaller element, et cetera. They all share one thing in common, which is focus on client and through that, a real element of growth into the opportunity that's there. So there isn't a particular size or cut that we are looking for. If somebody is excited by the culture, the environment, the community that we create here that we think is very, very different, then they're very welcome to join us, and we would love to have them.
Operator: And our next question comes from Charles Bendit with Rothschild.
Charles John Bendit: 2023 to 2030...
Mark FitzPatrick: Charles, do you mind starting that again. We missed the beginning of your question, Charles.
Charles John Bendit: Of course, So the first question is you reiterated your confidence in doubling adjusted profits from '23 to 2030. What markets and net flow assumptions from here are now embedded in that doubling assumption? And do you expect to revise that profit target up or down as we get closer to 2030? Or are you going to manage the business so that that's roughly where you end up? Second question, you talked earlier in this call about your growth algorithm having 2 drivers: productivity and adviser growth. Where do you see that second driver trending over the medium term, noting that it's been a period of relatively slower adviser headcount growth versus history in the last few years. Just keen to understand where you'd like that to settle long term and whether the Academy and the adviser head count movement in the industry more broadly can support that long-term rate? And then thirdly, I think you've talked in the past about SS&C as being one of the expenses on FUM. Can you quantify in terms of basis points on FUM, just trying to deconstruct the new simplified expense on FUM margin into adviser fees, third-party fund fees and then other ongoing costs like SS&C?
Mark FitzPatrick: Okay. All right. Why don't I deal with the second element in terms of the growth algorithm question and then ask Caroline to pick up the first and the third. So in terms of the growth algorithm, as you said, I mentioned productivity being very, very important and adviser growth also being very important. And we said last year that actually adviser growth in the short term would slow down as we went through an element of looking at some of the partners where productivity was particularly low and looking to see what we could do to try and support an increase in terms of activity, which led to some partners leaving and that trickles through in terms of some of the numbers from last year and a little bit of the numbers this year. I would expect adviser growth to increase to low single-digit growth going forward. I do think that the industry as a whole has been in terms of adviser numbers growing at less than 1% for quite some time. And therefore, the academy is going to have to do the lion's share of the heavy lifting on that because we've been doing the academy for the last 10-plus years, we know what it takes. We know what's required. We have a great pipeline of recruiters. We know the type of people we're looking for. And we think the market is actually very attractive for people to come in and join us through the element of the Academy. So adviser growth, we think, will be real and meaningful. And we think the productivity will also be a very, very important lever for us to pull. And we are focused on both, and we're looking to grow both productivity and adviser growth from '27 onwards. Caroline, in terms of the doubling?
Caroline Waddington: Yes. So the doubling, yes, I mean, look, that's our ambition rather than a specific formal guidance. We're saying that we set that in 2024 when the world was a challenging place to get people sort of look out further. We're not necessarily going to retrade that right now. And obviously, we guide every year. I mean the assumptions around that are sort of mid- to high single-digit increases in FUM every year, going back to sort of normal market type thing. We are -- I would absolutely say, as I did with those, it's not a cap, definitely not a cap on our ambition. So -- but we will obviously guide every year as we go towards that. On the actual -- sorry, expenses on fund, when we did our new simplification of reporting, we had a lot of debates about how we should do this. And really with the simplicity, we don't give that breakdown. We find that both income and expenses obviously vary with things like daily fund levels, but we pay out such obviously, other than the margin, we pay out significant amounts of that. So we're just not -- we're not having that -- we're not giving that amount of granularity.
Mark FitzPatrick: Yes, Charles, just to reinforce what Caroline has said, we wouldn't see the ambition as a cap. I'm not going to manage this business in curtail growth. We're going to grab every piece of growth that we sensibly can that is quality growth because the opportunity is so huge out there. And U.K., on average, 9% of take advice in the U.S. is something like 27%. So the U.K. market should be able to grow at least 2 to 3x. And therefore, the growth opportunity for us is huge, and we're going to look to prosecute that at as best as we possible can.
Operator: And that was our final question. So I will hand back over to you, Mark, for any final comments.
Mark FitzPatrick: Okay. Thank you for your time today, everyone, and questions. As I said at the outset, we're very pleased with the progress remains in the first half, both in terms of performance and in terms of operational execution. And we think that with strong foundations, continued investment in our client and adviser proposition and a clear strategic direction, we remain very confident in the opportunities ahead. Thank you very much, and I know I'll be chatting with you over the course of the coming days and weeks. Thank you.