St James's Place, the wealth management group 60% owned by HBOS, has promised a special dividend after posting a 54% rise in full-year profit.
The group, which sells life insurance, pensions and investments to more than 400,000 affluent clients through its own sales force, has emerged as the quoted sector's biggest beneficiary of rising investor confidence, last year's pension reforms, and the widening net of inheritance tax.
Last month, St James's posted a 58% rise in 2006 sales, beating its 15% to 20% long-term growth target, and it said yesterday that new business profits had jumped 71%.
On this year's outlook, chairman Mike Wilson said: "Our investment business was very strong last year, up 49%, and assuming the wobble in the market is not going to carry on, we see more business coming on the investment side and on the pension side - we are still optimistic of growing our pensions."
Advice on inheritance tax was another major driver of customers to the St James's salesforce, which is now on the increase for the first time in three years "There are fewer high quality advisers around today and yet there is a significant demand for advice," Wilson said. "There is no doubt that the collapse of various networks has made people more insecure working for IFA networks."
On the comparison between St James's Place's salesforce and the former Equitable Life salesforce, Wilson said: "Equitable Life's problem was to do with the product, and misleading the public whereas we are unit-linked and don't have any guarantees, that is terribly important - we don't get any number of client complaints at all."
St James's proposes a special dividend of 6.35p, fuelled by around £40m of one-off gains in the second half from a reserving change and deferred tax assets. It also plans to raise its total dividend for 2006 by 16% to 3.65p.
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