Uncertainty hitting wealth managers, says St James's Place

The group's combination of life assurance and wealth management helped it deliver a rise in 2009 operating profits.

But the general election, a low interest rate environment, new UK rules to govern sales of investment products and a lack of clarity on tax could make 2010 a lot tougher.

St James's Place, which is 60-per cent owned by Lloyds Banking Group, was cautiously upbeat yesterday after operating earnings on an embedded value basis in 2009 rose to 229m from 204m in 2008. The group also raised its final dividend by four per cent.

Chief executive David Bellamy said: "The current economic climate remains uncertain, and the recovery is fragile, but we begin 2010 with a little more optimism and confidence than last year." Mr Bellamy called for a quick end to the continued speculation about when and how Lloyds will sell its stake.

Analysts expect Lloyds to sell the stake, considered non-core, most likely via a share placing in the next two years as banks seek to boost balance sheets.

The general election this year has thrown more uncertainty into the mix for wealth management clients, with concern over possible tax hikes a double-edged sword for companies touting for their business.

St James's Place has 100 staff in Leeds.