Good morning, and welcome to our 2024 full year results. Today, I'm going to talk you through three key areas. Firstly, the strong business and financial performance we've delivered in 2024. Secondly, the progress we're making against our key programs of work and our broader priorities. And thirdly and finally, how our strategy is positioning us for further success, ensuring we keep delivering for all our stakeholders in the years ahead. I'm delighted to be accompanied this morning by our CFO, Caroline Waddington, who joined us in September last year. Caroline will shortly cover our financial performance for 2024. But first, I'll begin with a recap of our new business performance. While 2024 was in many ways a challenging year for SJP. I'm pleased to report it was also a year in which we delivered a strong outturn for our flows. So this is a testament to the power and quality of our advice-led business model. Even more importantly, it reflects the value that more than 1 million clients place in a trusted relationship they have with our great advisers. In 2024, despite a mixed environment for U.K. consumers, we grew our client base and they entrusted us with GBP 18.4 billion of new investments, which is 20% higher than in 2023. Even with pressures on household finances and a bumpy macro environment, individuals still need to save and invest for the future. Our advisers provided support and trusted advice to do just that. That's what our business is all about, empowering clients with invaluable advice to realize bolder ambitions. That same focus has once again underpinned high client retention and resulted in annual net inflows of GBP 4.3 billion. I'm very pleased that we were able to extend our long track record of achieving net inflows. It was another period in which we delivered strong investment returns for clients with the performance of Polaris being a particular highlight. In aggregate, investment gains across our range of funds and portfolios amounted to GBP 17.7 billion, representing 10.5% of opening funds under management. Together with our sustained net inflows, we delivered a 13% increase in funds under management to a record GBP 190 billion by the end of the year. This has been reflected in our financial performance for the year, where we delivered an underlying post-tax cash result of GBP 447 million, which is up 14% on 2023. And this is after one-off costs, Caroline will expand on this shortly. So all in all, a year of strong business and financial performance. On to my second topic now, namely an update on our major programs of work. I will start with our simple and more comparable charging program. We have undertaken a huge amount of work around our IT infrastructure so that it is ready to safely accommodate our new model by the second half of the year. To that end, we have completed the vast majority of the coding required. The new IT infrastructure build is near completion, and we are now in an extensive testing phase. We have also been working with our advisers to equip them with the right tools and literature so that they can work effectively with the new charging structure at the point we transition. Though we still have a lot of heavy lifting to do to complete the project over the next few months, we're on track, both in terms of overall budget and timetable. Now while there's inevitably been a lot of focus on our implementation program, I don't want you to lose sight of what we're aiming to achieve here and the benefits we hope to see over the long term. The introduction of simpler and more comparable charges will improve transparency for clients and make it easier for them to understand the costs associated with the services we provide. Clients will be better equipped to compare our charges with other providers and understand the enhanced value we believe we provide. This could also open up more of the market to us. And further, it will improve our ability to demonstrate the performance of our investments. And that's because under our current charging structure, when a client is advised by SJP and invests with us, they pay an all-in charge. This covers the cost of investing in all the other services they receive from us, including advice. Regulations require us to report performance net of all of these charges. Most asset managers just report their performance against their fund management fees. So this inevitably impacts perception of the investment performance. And this is all too often used against us by competitors. We removed this problem by disaggregating our charges. Changing our charging structure will also unlock our ability to innovate our client proposition in the future from developing passives, through to broadening alternative solutions and building out a more integrated cash offering. Moving to a new charging structure is a major exercise, but it's one that will broaden the market opportunity for SJP and position us for further success. Now moving on to our second key program of work, namely addressing the historic client service evidencing gaps. We've made good progress through building the infrastructure needed to efficiently and accurately gather and analyze historic servicing records. We are now in the process of collecting and validating evidence to correctly identify servicing gaps across our client base. We said from the outset that this was a very significant exercise that would take the best part of 2 to 3 years to complete, and we're confident of making further substantial headway during 2025. We remain confident in the adequacy of our provision. Our third key program of work relates to enhancing the efficiency of how we operate. This will create the capacity to invest in the strategic initiatives that will power our growth ambitions in the years ahead. The tangible changes we'll be making around organizational design, optimizing procurement and simplifying our technology estate will enable us to invest for the future in a way that is unique in the market. 2024 wasn't just about those programs, though. We've been ensuring we deliver for our clients and advisers day in and day out. We've worked hard at building our reputation, promoting the value of financial advice and leading the conversation in U.K. Wealth Management. We've done this in 4 key ways

a national brand campaign conducting real life for advice research and sharing inspiring client stories, working closely with the government and the FCA on the Advice Guidance Boundary Review and closing the advice and savings gaps more generally. When it comes to our investment performance we've achieved significant milestones with our Polaris range. Polaris is the largest multi-asset fund range in the U.K. with more than GBP 60 billion in total client investment and Polaris 3 is now the single largest fund in the U.K. More important than its scale is the fact that Polaris is delivering for our clients with all 4 of our Polaris funds outperforming their respective IA peer group last year and that's net of all charges including advice. We've continued to focus on and refine our Academy program, which is one of our key strengths. We are, by far, the largest recruiter and trainer of people in the financial advice industry. Our advisers and our clients benefit from the fact that individuals in our Academy have an average age of 37, and 34% are female. This adds longevity to our model and broadens the appeal of the partnership to more potential clients. But it's not just about training new advisers, it's also about providing them with the right support so they can build successful careers with SJP. We do this well. And so we are proud that over 89% of those who complete our Academy program are still with SJP 3 years later. This supports adviser retention, continuity of client service and the creation of future generations of senior advisers. We strengthened our executive team, ensuring we have the right blend of skills and experiences in place to lead SJP through our current period of change and deliver on our refresh strategy. So it's been a busy year for SJP, one of progress and achievement and one of which we're putting our business in good stead for the future. I want to take this opportunity to recognize and thank our entire SJP community from our advisers and their support staff through to every one of our employees. You've all delivered brilliantly through a period of significant change across the business. I'll now hand over to Caroline to talk you through the financials for 2024, before I return to set out how we're positioning for further success in the years ahead.

Thanks, Mark, and good morning, everyone. This is my first results presentation as CFO of St. James's Place. And I'm delighted to be able to present the strong set of numbers you can see on the slide. I'm going to start off today by providing detail on our financial performance for the year where I'll take you through our cash results, the strength of our balance sheet and the financial impact of our key programs that Mark covered earlier from an operational perspective. I'll then touch on out how I think about capital allocation, which will include my perspective on the visibility of future income growth and partner lending as well as a recap on our approach to shareholder returns. I am not going to cover IFRS or EEV, but information about these metrics can be found in the appendix of the slide deck. So let's start by taking you through our cash results. We are really pleased to have delivered an underlying post-tax cash result of GBP 447 million per year, which is an increase of 14% on 2023. This result is despite almost GBP 60 million of short-term costs we incurred in 2024 as we progress with the implementation of our simple comparable charging structure. If these were excluded, the underlying cash result would have increased by 27% year-on-year. Let me take you through the 3 key drivers of this strong result. Firstly, average funds under management, which I'll refer to as FUM, increased by 15% year-on-year. This has increased the net income we earned from FUM to GBP 684 million, up 14% year-on-year. This result is within our guidance range of 54 to 56 basis points on mature FUM, excluding Asia and DFM. For those of you who are less familiar with what this means I'll spend a bit of time later explaining what the increase in FUM means for the visibility of future growth in our cash result, including our concept of mature and gestation FUM. Going forward, we continue to anticipate that net income from FUM will be within the 54 to 56 basis points range until the implementation of our new charging structure, after which the range will reduce to 43 to 45 basis points, as we have previously guided. As usual, you can find a summary of all our 2025 guidance in the appendix. Secondly, our margin arising from new business has increased by 12% to GBP 117 million. This 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. This margin increase is driven by higher new business year-on-year. As a reminder, margin arising from new business will be negligible following the implementation of our new charging structure as the initial product charges are removed. Again, this is in line with previous guidance. Finally, we have continued to focus on cost management. Our controllable expenses in the cash results increased by 3% year-on-year to GBP 292 million. It's important to remember that each of the numbers given in our cash results are post tax and the increase in the corporation tax rate from April 2023 means that different tax rates applied in 2023 and 2024. On a pretax basis, our controllable expenses increased by 5%, in line with our guidance. This guidance continues to apply for 2025. More information on the other lines within our cash results can be found in the appendix. Now I'll move on to our balance sheet, which remains strong. We hold assets to fully match our obligations to clients. This means that movement in external factors such as investment markets and interest rates have little impact on our ability to meet our obligations to clients even during challenging market conditions. We also have a prudent approach to investing shareholder funds, which are predominantly held in AAA-rated money market funds or cash. All of this means we have a resilient solvency position. Our approach to solvency is to hold at least 130% of the Solvency II standard formula requirements. And at the end of the year, the solvency ratio for our life companies was 154%. Our financial strength is also reflected in our credit rating. SJP plc was reaffirmed as A rated by Fitch during the year. So now let's move on to our key programs of work. The implementation costs for our new charging structure on a post-tax basis, as you see in the cash results, were approximately GBP 12 million lower in 2024 than we originally guided to in October 2023. You should think of these costs as having been deferred into 2025. We expect the overall implementation cost of the project to be towards the upper end of our original guidance range of GBP 140 million to GBP 160 million pretax. It is important to note that this cost phasing change does not impact our planned implementation time line, which remains by the second half of this year. As a reminder of what our future charging structure will look like, we've included detail in the appendix. For the avoidance of doubt, there were no fundamental changes to the core charging structure we set out in October 2023. Though we have made refinements within the structure, which were anticipated and accommodated within the margin guidance we issued at the time. Let's move on to our historic ongoing service evidence review now. As Mark said, there is no change in our estimates of the cost of the program, so we remain comfortable with the provision. Our cost and efficiency program is on track to be delivered by the end of 2026, and in line with the guidance we provided in July last year. As expected, the program has had no material impact on our 2024 results as the cost to achieve have offset the savings we made during the year. We anticipate this will also be the case for this year as the benefits we realized, net of cost to achieve, are reinvested in the business to drive future growth. A reminder of our financial guidance on this program is set out in the appendix. Having covered the financial performance of the business during 2024, and where we stand on our key programs, I now want to spend some time setting out my perspectives on 2 fundamental areas of our financial model. First, that we're cash generative with a high degree of visibility over future income growth. And second, that we have a simple and disciplined approach to capital allocation, that means we're able to invest in our business to drive sustained growth while delivering returns to our shareholders. I'll start by recapping on a high level of visibility we have over our future income growth in the medium term, driving capital generation. Conscious, of course, of the expected dip in profitability in 2025 and 2026. As previously announced, this is caused by the transition to our new charging structure. Our financial business model is simple. Our key profit drivers are annual product management charges on our FUM. As we grow FUM, these ongoing charges grow. And for our current charge structure, this is complicated by the fact that these charges are not taken for investment bonds and pensions business in the first 6 years, which is our concept of gestation FUM. However, our high retention rate means we have good visibility of future income, which will generate as this gestation FUM matures, and this is without incurring any additional costs. To help bring this to life, this slide gives an illustration of the growth drivers for net income from FUM over the past 6 years. It highlights that the biggest factor here has been additional income from maturing gestation FUM. So what does this means for the future. At the end of 2024, we had GBP 50 billion in gestation, which will be maturing over the next 6 years. Ultimately, this should generate in the region of GBP 290 million of additional income in the cash result every year when it has all matured. At the same time, under our new charging structure, we'll benefit from all charges applying from the day that any new investment is made. We will not have to wait 6 years for new investment bond and pension business to contribute recurring income to cash results. So this means that for 6 years post implementation, the cash result will benefit from charges applying from day 1 for all new business written under our new structure as well as benefiting from our existing gestation FUM at the point of transition, maturing to make a positive contribution. Together, these dynamics build a powerful picture of how our income can develop in the medium term. We anticipate that the cash result will accelerate from 2027 onwards, supporting our ambition to double the underlying cash result from 2023 to 2030. Having touched on how we generate income and grow our capital resources. I'll now spend some time on capital allocation. During last year's half year results, Mark shared our capital allocation framework, which you can see on this slide. This puts the safety of client investments first by ensuring we maintain an investment-grade credit rating and meet all regulatory solvency, working capital and liquidity requirements. Our second priority is to invest in the core capabilities of the business to ensure we remain fit for the future. As Mark explained last July, investing in our business to align to our refreshed strategy will be funded by savings we generate through our cost and efficiency program as we change the way in which we are organized and operate to enable us to deliver our strategy effectively. We will also continue to invest the capital necessary to support our partner succession proposition, which we refer to as our business sale and purchase, or BSP scheme. For those less familiar with this aspect of our business, it's something that I see as a key differentiator and a point of competitive advantage for SJP in our marketplace. BSP enables partners who want to downsize or retire to realize the value in the business they have built by selling all or part of it to another SJP adviser. I want to share with you 4 stakeholder benefits of the scheme. Firstly, it supports the delivery of good outcomes for clients as it enables them to be transferred to another adviser ensuring they receive continuity of service within the SJP ecosystem. Secondly, it makes SJP a great place for motivated entrepreneurial advisers to build high-quality businesses over the long term. Thirdly, it helps to support the next generation of SJP advisers who can acquire the right number of clients at the right time. And finally, it ensures high retention of advisers and clients, which leads to high retention of our FUM, which is critical in supporting our financial results. We facilitate the BSP scheme by matching sellers with buyers, supporting them and shaping a transaction that works for all parties and arranging finance for the transaction. Whilst we originate and initially underwrite all loans, over time, we have successfully diversified loan funding. We have done this through loan sales, establishing a nonrecourse securitization vehicle and securing external funding facilities. This provides scalability and sustainability of external loan funding. At the end of the year, nearly 60% of our loan book was funded externally. Going forward, we'll continue to optimize the way we fund our BSP scheme to ensure we're making the most efficient use of our capital. Once we've invested in the business, we provide reliable returns to shareholders. To recap on the guidance we announced last year for the years 2024 to 2026, we expect to return 50% of the underlying cash result. We continue to expect that for these years, the returns will be structured as 18p per share in annual dividends, with the balance distributed through share buybacks. For 2024, we paid an interim dividend of 6p per share and conducted an interim buyback of GBP 33 million. In line with our approach, the Board has proposed a final dividend of 12p per share subject to shareholder approval at the AGM and a final buyback for the year of nearly GBP 93 million. This final buyback represents around 1.5% of our current market capitalization and brings total shareholder returns for 2024 to GBP 224 million. The Board intends to reassess its approach to shareholder returns for 2027 and beyond at the appropriate time. Finally, we'll consider returning any remaining excess capital to shareholders. We don't anticipate additional returns in the immediate future as we complete the key programs of work and invest in the priorities described in our refresh strategy. Since joining the business nearly 6 months ago, something which has really struck me is the power of our business model. Clients truly value the trusted personal relationship they build with their adviser as demonstrated by our high retention levels through what has been a challenging time for the business. The advice they provide really is invaluable in helping them navigate the ups and downs and complexities of their lives. I can vouch this firsthand having been an SJP client with the same adviser for 27 years. Something I didn't fully appreciate until I joined however, is the simplicity of our financial business model and how it provides such good visibility of future growth in income. But that simplicity is not necessarily reflected in our financial reporting. That's why one of my priorities is to review what we can do to simplify it. As I said at the outset, we've had a successful year, which has translated into strong financial results. We have grown our underlying cash result by 14% despite additional short-term costs as we implement our new charging structure. We have a highly visible earnings profile, a robust balance sheet and a disciplined approach to capital allocation. With that, I'll hand back to Mark.

Thank you, Caroline, for walking us through a strong financial outcome for the year. Now on to how we're positioning for further success. Back in July, we set out the findings of our business review and our resulting refreshed growth strategy for SJP. I won't cover the same ground again, but I do want to remind you of the market opportunity for our business and to recap on our strategy and priorities that will underpin our growth. So starting with the market opportunity. Across the U.K., individuals today have about GBP 3.3 trillion in liquid investable assets. And this figure is expected to increase by about 7% per annum compound to 2030. The higher wealth segments are expected to grow more quickly than this. This is a growth market, and we are focused on the main growth segments. The need and demand for advice is present today. We are living in a world of acute complexity and uncertainty, whether this be geopolitics, market volatility or changes to pensions and savings rules and taxes. People need advice and they need advice from people they trust. This is what the SJP partnership does. So financial advice is in high demand, and we see that demand only growing. Three key reasons for this. First, the savings gap is large and growing. Many people in the U.K. do not have enough put aside for retirement. An industry report last summer indicated that 38% of people are not on track for what the Pensions and Lifetime Savings Association deems as even a minimum retirement lifestyle. At the same time, many individuals have over saved, but underinvested in the market compared to other major developed economies. Over the past decade, 3/4 of ISA subscriptions have been into cash ISAs, but only one quarter have been into stocks and shares ISAs. With interest rates having been near 0 and lagging inflation for most of the period, that is a concern. Even with interest rates being better today, the opportunity cost of not being invested adequately in the market is huge. Second, the decline of defined benefit pension schemes and population demographics means there is an increasing need for people to provide for their own retirement as well as to consider how to pass on their wealth efficiently. Proposed changes to the inheritance tax regime and the recent budget highlight the complexity of making the right choices in this critical area and why financial advice can make such a difference. Third, the proliferation of different and sometimes esoteric investment products, together with access to endless, but often unreliable information at the click of a mouse or swipe of a phone to make people feel overwhelmed in how to make positive decisions. Too often, they then disengage or withdraw from potential investing. With the financial consequences of a wrong action or indeed inaction so significant, the role of a trusted and highly qualified financial adviser can prove invaluable. So while it's clear that our marketplace has experienced significant change in the regulatory landscape, there continues to be strong support amongst politicians, policymakers and regulators for a healthy U.K. financial advice industry. This creates a compelling growth opportunity for SJP as the market leader and home of financial advice today. Our business model has clearly worked very well in the past, and it delivered again in 2024, yet we are in no way complacent. We are evolving our business to ensure we maintain our market-leading position going forward. That's why we set out a refreshed growth strategy in July. As a reminder, it's based around 4 pillars

brilliant basics, differentiated client proposition, leading adviser offering and performance-focused organization. Our strategy is split into 2 very different phases. Right now, we're in the heart of our strengthen phase where we are working on delivering the 3 key programs of work I talked about earlier and more broadly building the right foundations for the future. This is critical work as the hard yards we're putting in now will create the capacity for us to progress into our amplify phase. And this is where we can invest into further developing our proposition and support for clients and advisers alike, which will underpin our continued growth. In due course, we look forward to building our high net worth offering where we have great opportunity, expanding our product shelf to incorporate new cash and alternative offerings and harnessing the power of the data we have across our ecosystem and developing our technology, so we can improve processes, enhance client and adviser experiences and drive productivity. While much of this work is yet to come, we are making progress where we can. For example, we're developing and trialing AI tools to support advisers with administrative and technical queries, which will enhance efficiency. And our investment team is actively exploring options around the dedicated passives proposition and will develop and refine their thinking as this year unfolds. So we have a clear growth strategy, but what does success look like? Our ambitions are to continue to be the best place to be a financial adviser in the U.K. and drive leading adviser advocacy. To embed a high-performance culture with empowered and engaged colleagues make a real difference to our clients and advisers. To support a growing base of clients who stay invested with us for the long term and to deliver mid- to high single-digit annual growth in funds under management over time. If we achieve all of this, we have the ambition to double the underlying cash result from 2023 to 2030, underpinned by the visibility we have of our future growth and income, as Caroline laid out earlier. So to summarize, we've had a very busy year, one of change and challenge, but one of progress and achievement too. We've grown the business. We've grown the adviser base and we have grown client numbers. We're embracing the opportunity to enhance what we do and how we do it, and we do so from a position of strength. We have clear market leadership as the home of financial advice. We have a robust, resilient and scalable business model, a fantastic SJP community, working hard to drive great outcomes for our clients and an opportunity to drive significant operating leverage as we grow. We believe we have the best advisers in the industry, and we are committed to providing them with the best product range, technology and support in the marketplace as we both grow our businesses. We have a compelling long-term opportunity ahead, and I'm excited about what we can deliver for all our stakeholders. Good morning, and thank you, everyone, for joining us. It's Mark FitzPatrick here. I'm aware today is an incredibly busy day in the marketplace. So we will try to keep our timing as accommodating as we can for you. I'll open up for questions in a moment. But before that, I wanted to reiterate 3 key takeaways from the full year results announcement. First, it's been a year of challenge, change and hard work for SJP, but also one where we've achieved a lot. The partnership has delivered very strongly this year and being there for clients, guiding them through the changes from the budget and the ups and downs in the economy and their hard work has helped to grow our client base, mainly through word-of-mouth referrals from existing clients. We've realized strong investment returns for clients and collectively maintained a high client retention level. All of this adds up to strong flows and good financial results. We've also refreshed our strategy, and we've made progress on each of our key programs of work. I want to acknowledge and thank everyone in our SJP community for their contribution in driving this. It's not been easy, but as I said in the presentation, they have all delivered brilliantly. Secondly, 2025 is going to be another year of heavy lifting for the business. I am confident that this will strengthen SJP further and put us in good stead for the future. Beyond delivering our key programs of work, we'll be investing to support and underpin our long-term growth ambitions. The role of the partnership is critical to that so we will help our advisers to do more and be more efficient in how they do it. For example, we're developing and trialing tech-enabled tools to support advisers with administrative and technical queries. We're also working to extend our product and investment shelf with a focus this year on exploring a dedicated passives proposition. Thirdly, I want to reiterate the size of market opportunity ahead. There is a GBP 3.3 trillion of investable wealth in the U.K., and this is growing, and so too is the need and demand for trusted financial advice. As the home of invaluable advice, we are ideally positioned to help more people secure their financial futures. All of this means I'm really excited about what we can achieve for all our stakeholders in the years ahead. With that, we'll open up for questions, and I'll hand back to Lucy, the operator.

[Operator Instructions] We have a question from Andrew Sinclair of Bank of America.

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

Andy, thank you. And yes, it's been a very interesting 12 months. So much more comfortable this time around than this time last year. In terms of provision update, I think last year, we said this would be a 2- to 3-year program. So year 1 was all about building the infrastructure needed. Year 2, so the current year is all about execution, connecting with our clients, and year 3 is really about finishing up the task. In terms of building the infrastructure that's needed over the course of the last year, probably taking a little bit longer because we want to be more efficient and more effective at how we -- effectively hoovering up the data from the partnership and from their records. And that's not quite as effective and efficient as we want it to be because I want to do this in a high-quality way, and I only want to do this once. So there's lots of time, lots of attention on it and expecting this year to make significant progress and to be mailing out significant numbers of clients that are affected. In terms to the second question, deferral of implementation costs. I'll hand over to Caroline.

Andy, yes, the deferral of implementation costs, we expect these to be in half 1 and some will be in half 2, but we expect them all to be spent in 2025 with nothing in 2026.

And in terms of adviser headcount, yes, a stronger addition in the second half of last year. We have a good pipeline coming through on the Academy . I think they're about 345 in the Academy still to come through, training well. And as I think I've said to a number of you, the Academy is absolutely, I think, one of the crown jewels we have in the business and just delivering so strongly for the sector as a whole in terms of the need for advice. And I think over the last 5 years effectively, I think we've delivered the lion's share, a significant proportion of the advisers for the market as a whole. Thank you, Andy.

Sorry, just to clarify on that, Mark, just coming back to the point, do we think that the head count can be up in 2025 given the productivity focus? Or do you think we will see that number go down a little bit in '25, just any guidance on that?

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

Our next question comes from Nasib Ahmed from UBS.

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

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

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

Our next question is from Andrew Crean of Autonomous.

Yes, 3 questions, if I can as well. When you look at excess capital or how should we look at when you're generating excess capital? I assume is the life company solvency ratio, you target 130%, but presumably you want a buffer. What I'd like to know is above what levels would you deem you have excess which could be returned? Secondly, could we come back to the redress issue. And could you comment on the FCA study of the 22 companies, which appeared to show that on 2% of cases, there was an issue where you charge -- where people have been charged but have not received ongoing advice. That was the same ratio that you had or said that you had for 2023. Could you confirm that, that is still the case having done the work on the earlier years as it is only 2% of cases involving 1% of funds under management? And then thirdly, there's no mention here of either Asia or Rowan Dartington. Are these still core parts of your business? And perhaps you could say on Rowan Dartington what proportion of your 1 million customers actually also have a Rowan Dartington account?

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

Mark, specifically, are you still at the case where only in 2% of cases and 1% of funds under management, have you got an issue, which is what you said in 2023...

Yes. So in 2023. Andrew, that was the situation as of 2023, and we had complete confidence in those numbers by virtue of the fact that 2023 we had effective full utilization of sales force, and we could see the overall picture on that. The issue, if you recall, going further back to 2018, and we're very pleased, the FCA has effectively agreed with us and for the market that 2018 is the right parameter in terms of how far people should be going back that they have to do this exercise. We at that stage and still are working out exactly what the size and scale of the gaps are for those earlier years. But we based our provision based on the samples that the skilled person had done on the basis of last year. And there's no new information that comes through in the intervening 12 months that would cause us to revisit the adequacy of our provision.

Okay.

And then Asia RD piece, effectively, I think the number of clients from an RD component is kind of probably about 1% of the overall number. So it's not a huge number at this stage. And that's one of the things we want to look at as part of our high net worth component. Because we think there's a lot more that can be done, and we want to see the -- what the role of DFMs around high net worth can be. We think there's a lot more we can do in that and be a lot more deliberate. And on to your first question around the excess capital and the like, Caroline?

Yes. So thank you, Andrew, for that. I mean our solvency ratio is one measure. And obviously, we are an insurance company, although we're not a traditional insurance company, and we have to adhere to the Solvency II requirements. And as you say, we're above that. But I don't have a target on that. The way I actually look at the capital required for this business is actually what capital do I need. So I've got pretty much a match book. So we have a management solvency buffer, which looks at sort of things like operational risk and the capital we need to -- we believe we need to hold for the entities. And then that feeds into our capital calculation requirement. We then have other elements of it. So things like the liquidity has to feed in. So we have intangible assets on our balance sheet that obviously can't be paid out, and then we also have a degree of working capital, things like sort of the much loved policyholder tax and things like that. So there's other things that means we can't pay out. And we do aim to then pay out what we can to shareholders, that's through our capital allocation framework, which was -- which I talked about in the presentation, but I think was also spoken about in July. So that's how I think about my capital.

Andrew, it has been pointed out to me...

How should we view it?

Externally, how should they view it.

So I will -- after my 5 months, I've looked at my internal view. I will reflect on that, Andrew, and get back to you with an eloquent answer, which would not be the case right now. So let me reflect on that. It's a fair question, and I will get back to you.

Thank you.

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

Our next question is from Greg Simpson of BNP Paribas.

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

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

We now have a question from Charles Bendit from Redburn Atlantic.

Just 1 for me. I wanted to follow up on Greg's question about the initial charges. So the 1% to 3%, I think, is referring to the initial advice charges and tier, depending on case size. And I just wanted to check that there's no tiering on the 1.5% initial product charges. I'm just curious whether the regulator is applying an industry-level pressure on firms to share economies of scale on all aspects of their charging structure, and whether we could see that come through in due course?

So Charles, I think the regulator would be at pains if they were on this call, and they may well be on this call. They will be at pains to say that actually, they're not a pricing regulator. So ultimately, I think, what they're looking at is to understand people's prices vis-a-vis the value, and that's a key component of the consumer duty aspect. So when we've looked at all the different aspects of our charging structure and charging model, we've looked at it vis-a-vis value and vis-a-vis the element of value versus the cost for each individual component. We can see as we go forward and as we set out an element of tiered ongoing product charge for sizes set out in terms of the slides and the appendix on that. But from an element of anything else at this stage, I'm not expecting to see any other aspects of tiering come through over and above those we set out.

And just to confirm, there is no initial product charge on the new charging?

Sorry, I missed that piece, sorry. Thank you.

Our next question is from Enrico Bolzoni from JPMorgan.

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

Enrico, thank you, three very, very different questions. So firstly, on the tiering model. We have a very broad base of advisers and different models. There are some advisers who really focus on the high net worth component and really drive that, and there are some who focus predominantly on the more retail component, and there are some who do everything in between. So we think that actually the fee structure will definitely start to remove the headwinds that some folks have faced around the perception of SJP being expensive. It should make it a lot easier for the media to understand -- a not less -- a lot more difficult for competitors to confuse prospective clients with fee levels because it's going to be very straightforward, and the fee levels that we're advocating are very much in line with market. So what, I think, will stand out is going to be the quality of our advisers, the quality of support they get, the quality of training they have and the depth and quality of relationships. Because I believe they are truly exceptional on that side. In terms of year-to-date performance, to some extent, it's testament to that. The first quarter really in the run-up to tax year-end, March is such an important component of that. March effectively makes or breaks the quarter as everybody prepares and make sure they have used their tax allowances properly. And this year-end, there's a lot more activity for everybody to do to make sure they're managing any capital gains properly and effectively. So it's the after tax affairs rather than just their affairs. So there's a lot of work. Our advisers are incredibly busy at the moment, working incredibly hard with clients, supporting them. So let's see how March goes, but the beginning of the January, February is looking good. As regards to culture, it's something that I am a real -- I spend a lot of time focusing on the culture. And I'm very keen to have a culture where people feel empowered, emboldened, open, bringing more of the outside world into the organization and creating a closer connectivity with the advisers, with our people, ultimately, all driven around what is the right thing to do for the clients and how do we support the clients? So if you're a receptionist in Cirencester, it's a bit like, if you're kind of that whole NASA story. It's all about kind of looking after the clients, it's all about helping somebody get to the moon. We're all aligned to that. So it will take some time to get the culture to the place I want it to be, but I think people are recognizing the opportunity to shift the culture and the opportunity for us all to work very, very hand in glove in terms of being very focused on how do we support clients, how do we help clients. And that's been a big part around the national brand campaign and a lot of the research we've been doing is all about understanding the needs of clients and how collectively can everybody in the SJP community play a role in delivering against that. But I appreciate that question. Thank you.

Our next question is from Ben Bathurst from RBC.

I've got questions in 3 areas, please, starting with the charge change implementation. I just wondered if you could maybe be a bit more specific around the planned timing of this in 2025. Perhaps at the minimum, you could maybe say that it's Q3 or Q4 implementation that you're planning for as clearly, there are implications for the cash result modeling for this year? And secondly, also on charge changes. Do you have any internal expectations around how short-term flows might be impacted, sort of either side of the changes? I mean do you think it could be reasonable to expect maybe some pull forward and then a slowdown either side of the implementation date? Or do you think there could be a distraction factor maybe weighing on new business in the run-up? Any thoughts around that would be appreciated. And then thirdly, on the BSP process, at H1, you referenced as part of strategy update potentially needing to invest capital to ensure successful operation of that scheme. I wondered if there's any update there, and if that's something you're envisaging doing more of over the course of 2025?

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

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

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

They are included in investments in associates in the accounts.

Okay. Great. And within the cash results -- and within the underlying cash results?

Within -- I will double check that. I think -- I believe they will be in miscellaneous, but let's just get you the specific answer. I'll get that through. And very -- but it is very small. By the way, it's going to be -- it is really small.

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

Our next question is from Steven Haywood of HSBC.

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

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

We have a question from Andrew Lowe of Citi.

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

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

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

I do not have that here. And that would be an interesting number because our individual advisers would know that for their individual clients, by virtue of looking at their confidential financial reviews, looking at 100% of where they are, acknowledging their clients invest a subsets of their portfolios and wallets with us rather than the whole thing. So that's not a readily available number. So dare I say, I'm not going to ask the partners to run around and do that for me at the moment. I'd much rather than be engaging with clients. But if I stumble upon it, I'll bear it in mind the next time I see you.

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

Lucy, thank you very much indeed, and thank you, everyone, for your questions and your attention. I know it's an incredibly busy morning. Just a few final things from myself. This 2024 was a year of challenge and change at SJP, but I think it's only strengthened my conviction in the business. We've performed well. I think we've delivered a strong outturn for our flows and our financials, and we've made good progress on our core business priorities. The company is in good shape. We've got a lot of hard work to do. I think Caroline said we've got a lot of wood to chop this year, which is absolutely correct as we strengthen the business and execute on our plans, and I'm really excited about the opportunity ahead of us. We have a strong business model, a fantastic SJP community, a refreshed strategy that gives us clarity around our future priorities, and we're ideally positioned to deliver for all stakeholders in the year ahead. So I look forward to chatting to you, many of you over the course of the coming days. Thank you very much indeed for your continued support, and good luck with everything going on today. Thank you.