Shares slump hits new sales at St James's Place

St James's Place Capital, the upmarket financial services group that targets high-income individuals, yesterday blamed volatile stock markets for a slump in new business at its investment arm.

"The level of new business for St James's Place in the opening weeks of the current year has been running at about 10 per cent lower than in the corresponding period last year," the group said.

Shares in St James's Place responded with a fall of almost 13 per cent to 235p, their lowest for more than a year.

The global economic downturn and stock market slump has hit wealth management groups, with Amvescap and the Swiss private bank Julius Baer both reporting lower profits.

"We won't be pushing the stock until we get signs that their high-net worth clients are investing again," said a BNP Paribas analyst, Craig Bourke.

Despite the fall in business at the start of the year, the chairman, Mark Weinberg, said St James's would stick to its long-term goals.

St James's, which is 60 per cent owned by the banking group HBOS, revealed a 16 per cent jump in pre-tax profits to £92.4m in the year to 31 December, helped by a 15 per cent rise in new life and pensions business.