Barclays has cut St James's Place to 'equal-weight' from 'overweight' and slashed its price target by 23% to 1,300p, citing artificial intelligence as a near-term threat to UK wealth managers. The brokerage raised its discount rate for St. James's Place from 11% to 13% to reflect margin compression risks from AI automation, while applying a lower price-to-earnings multiple of 15x.

St. James's Place shares fell 17% by mid-February, with platforms AJ Bell and Integrafin also declining as investors priced in AI disruption fears. Barclays estimates that if margins compress from 45 basis points to 25 basis points and growth slows 25% from year six onwards, valuations could fall up to 65%. The brokerage incorporated an implied 10 basis point margin compression impact into its forecasts.

On the fundamental comparison, St. James's holds a 22% relative market share of adviser assets under management versus Quilter's 11%, with St. James's posting an AuMA compound annual growth rate of 11% since Q1 2021. The company's turnaround includes a £426 million provision for client refunds and revised charging structures. Barclays forecasts adjusted earnings per share of 82.4p for fiscal 2026 and 108.6p for fiscal 2027, down from previous estimates.