SJP withholds third of dividend as coronavirus crisis hits AUM by 13%

The advice giant's board also announced it will be making a single dividend decision for the 2020 financial year, which will be taken as part of the full year results in February 2021. This year's AGM will be held as a closed meeting on 7 May, although shareholders will be able to vote by proxy.

SJP's share price dropped by more than 4.5% by 8.30am on Thursday morning on the news of the dividend cut.

Strong net inflows helped temper the negative performance, growing 9% for the quarter to £2.4bn, but it was not enough to make a dent in the £17.7bn performance losses across the business, which saw total funds under management (FUM) decline by 13% in 2020 Q1. The firm's funds under management had dropped from £116.99bn at the end of 2019 Q4 to £101.67bn on 31 March 2020.

Investment management took a £4.2bn hit in net returns, but this was dwarfed by the pension arm's losses of £8.1bn, although it did also see the greatest net inflows at £1.6bn.

Equities comprise the greatest share of SJP's FUM, taking 60% of the total funds (£60.7bn), with North American equities seeing over a third of that total with £21.6bn. Fixed interest stands unchanged at 18% of total FUM, while both alternatives and cash saw a rise of around 10% on the previous year's first quarter.

SJP chief executive Andrew Croft (pictured) said: "At the time of our full-year results announcement I commented that improved investor sentiment, following the UK general election outcome, had driven an increase in activity across the business. With the escalation of the Covid-19 crisis during March there was a sharp decline in global markets and this negatively impacted our funds under management, which closed the period at £101.7bn.

"While our business is resilient, we are not immune to how the unprecedented level of uncertainty may impact the operating environment for the business and our clients for the foreseeable future."

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"We have seen from past crises that if we look after our clients, advisers and employees, as well as our wider community, we will be rewarded in the future with increased goodwill, loyalty and retention. Looking ahead, the fundamental financial planning requirements of individuals remain considerable with the need for trusted financial advice continuing to increase, arguably even faster now given the uncertainty that prevails."

Croft added: "At the same time, the availability of high-quality professional financial advice continues to be limited. The strength and resilience of our business model means we are well-positioned to meet the challenges ahead and take advantage of the opportunities for continued growth over the medium term. The 'can-do' attitude with which the business has set about tackling the changes that have been forced upon us is a credit to everyone within the St. James's Place community."

Correction: This aritlce originally said SJP had cut its dividend by a third. In fact, the company contested it has withheld a third of its dividend to shareholders.

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