After it was announced St James's Place will drop out of the FTSE 100, analysts reflected on a challenging 12 months for the firm.
In a note published yesterday (June 12), analysts from Peel Hunt said it is positive the firm is dealing with historic issues.
It said: "Newsflow has recently been dominated by the £426m pre-tax provision recognised for shortcomings in evidencing ongoing servicing, and proposed changes to fee structures.
"We view both as dealing with historic issues, albeit there is some uncertainty as to their lasting impact."
In February this year, SJP revealed it had put aside more than £400mn for potential client refunds to address ongoing advice issues, after it saw an uptick in complaints.
This came a few months after it announced would overhaul its charging structure, including new investment bonds and pensions operating with an initial charge and ongoing charges but without any early withdrawal charges.
These changes are set to come into effect in the first half of 2025.
The analysts added: "With regards to fees, in our view SJP is now moving to be more in line with market norms, which suggests that the impact on client behaviour should be relatively modest.
"Funds under management growth remains depressed given weak investor confidence, but this is a consistent issue across the sector."
It added the charging structure could result in a loss of advisers and clients or could be the target for claims management companies following the cash set aside for claims.
More recently, SJP was relegated from the FTSE 100 after its stock had fallen more than 50 per cent in the past year, giving it a low valuation compared with previous norms.
The note said the slow down in SJP's flows is believed to be a cyclical market-wide issue.
tara.o'connor@ft.com
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