St James’s Place said its funds under management hit a new record high in the third quarter as market performance offset a rise in the number of customers pulling their cash from of its funds.

Funds under management (FUM) increased 14.2 per cent to £242.4bn, which the firm credited to an improvement in its margket performance.

It attracted £1bn of investment returns during the period, bringing returns for the year to date to £19.1bn.

Inflow drop

But the FTSE 100 group reported a slowdown in inflows. Gross inflows reached £5.1bn in the quarter, down from £5.7bn the previous year.

Net inflows also tumbled to £0.5bn from £1.7bn. Chief executive, Mark FitzPatrick, said the fall was in response to heightened customer caution caused by “market volatility” and uncertainty in the lead up to the Autumn Budget.

FitzPatrick added that momentum from the implementation of its new charging structure last year, which caused a surge in activity, had slowed.

The group also hiked its North American equities exposure to 40 per cent, amounting to £95.5bn, and boosted its investment in Asian equities by 14 per cent to £38.7bn.

Its exposure to UK assets remained low, accounting for just eight per cent of its portfolio, at £20.3bn. European equities also made up just 12 per cent.

Client performance

Despite a fall in inflows, client retention remained steady at 95.1 per cent. Outflows also remained stable at 5.1 per cent, inching down from last year’s 5.2 per cent.

FitzPatrick said the performance was based on business simplification, “improving efficiency” and creating further investment opportunities.

“We continue to invest in the areas that will drive future growth, including enhancing the proposition and experience for clients… and using technology and AI to improve productivity across the business.” he said.

But Max Harper, analyst at Third Bridge, said that while concerns around tax are pushing customers to access advice, the group’s “charges still continue to be expensive, compared to corners of the market.” 

“Consumer duty has brought fees into the clear, with outflows posing a threat, combined with differing generational approaches to wealth management, potentially causing younger prospective clients to handle their own portfolios,” he said.