In an interim statement today the company said 11.22 pence per share would be held back while the company assesses the impact of the virus on business.
The move comes despite a rise in gross inflows from £3.61bn in Q1 2019 to £4.04bn in Q1 2020 although Funds Under Management dropped from £103.52bn a year ago to £101.67bn in the first quarter.
SJP chief executive Andrew Croft said the company remain financially strong but it was “prudent” to withhold some of the dividend, keeping cash within the business.
He said: “Although gross and net flows in April have been robust, albeit below the same month last year, 2020 is shaping up to be another challenging year. Whilst our business is resilient, we are not immune to how the unprecedented level of uncertainty may impact the operating environment for the business and our clients for the foreseeable future.
“It is therefore imperative that we have the ability and flexibility to continue providing clients with the quality of service they need through the partnership in scenarios that have the potential to become significantly more challenging.
“For this reason, and acknowledging the heightened regulatory sensitivity at this time, the board has decided to withhold 11.22 pence per share, or around one-third of the proposed 2019 final dividend, until such a time as the financial and economic impacts of Covid-19 become clearer.
“This prudent judgement will ensure we are able to deal with such scenarios and protect clients, the long-term value of the business, and our proven ability to benefit from the growth opportunity that will undoubtedly emerge on the other side of this crisis.”
The company plans to pay 20 pence per share as a second 2019 interim dividend on 27 May. In addition, the board will make one dividend decision relating to the 2020 financial year in February 2021 at the time of the full-year results.
Mr Croft added that he believed the fundamental Financial Planning requirements of individuals remained “considerable” with the need for trusted financial advice continuing to increase, “arguably even faster now given the uncertainty that prevails.”
He praised the 'can-do' attitude of SJP staff in tackling the changes that have been forced on the group as “a credit to everyone within the St. James's Place community."