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St James’s Place starts search for new CEO

By Nagasunder in UK Business News, posted May 29, 2023

St James's Place, one of Britain's largest wealth management firms overseeing more than £150 billion in client assets, has begun the search for a new chief executive officer (CEO), as Andrew Croft prepares to step down.

The FTSE-100 company has enlisted the services of Russell Reynolds Associates, a renowned headhunter, to help in finding a suitable successor, according to sources familiar with the matter.

Andrew Croft has been with St James's Place since 1993 and held the position of finance chief from 2004 to 2017 before assuming the role of CEO in 2018.

Although there is "no rush" to find a replacement, insiders suggest the transition to a new CEO could span over a year, indicating a deliberate and careful selection process.

St James's Place specializes in serving affluent clients and employs thousands of financial advisers, referred to as partners, who collectively manage £153 billion in assets.

The firm has faced scrutiny regarding its recent performance, with Mr. Croft characterizing quarterly net inflows as "good," while analysts have expressed differing opinions.

Additionally, the company issued a warning this year it would fall short of a key expenses growth target.

In 2019, St James's Place became embroiled in a controversy surrounding partners' compensation and benefits, such as luxury cruises and jewelry, which were awarded to high-performing individuals.

Following a review, the program was discontinued to promote appropriate behavior, addressing concerns that partners were being incentivized to engage in misleading sales practices.

The news of the potential leadership change at St James's Place coincides with the upcoming introduction of a new consumer duty overseen by the Financial Conduct Authority.

Paul Manduca, a respected figure in the financial industry who chairs St James's Place and previously led Prudential, will oversee the search for Croft's successor.

During the company's recent annual meeting, more than 20 percent of shareholders voted against its remuneration report, reflecting discontent within the investor community.

Andrew Croft's total package for the previous year amounted to just over £3 million, with some investors expressing dissatisfaction over his receipt of long-term awards tied to the company's depressed share price during the pandemic.

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St James's Place partners operate on a self-employed basis, and the firm is headquartered in Cirencester.

A spokesperson for St James's Place stated that the board maintains regular communication with search firms as part of long-term succession planning and adheres to best practices in corporate governance.

As of Friday's closing, St James's Place shares were up 7.5p at 1112.5p, giving the company a market value of £6.1 billion. Over the past 12 months, the stock has experienced an 11 percent decline.