It has also announced the £34.2m takeover of Rowan Dartington Holdings, a Bristol based specialist stockbroking and discretionary investment service.

The details were released in its results for the six months to the end of June, which were published this morning.

The FSCS levy has hit profits, which have dropped to £72.9 million from £78.3 million 12 months earlier. The distribution arm of the business lost £23.5m compared to £8.8m last year.

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The report today stated: “The decrease reflects the underlying increase in income from funds under management but more than offset by the increase in the FSCS levy.

“The strength of the financial performance was only marred by the levy charged by the FSCS levy and in particular the very significant increase year on year.

“We expect the cost for the current period to be some £20 million (£15.9 million post tax), an increase of £13.1 million compared to last year's charge of £6.9 million (£5.3 million post tax), and this significant expense impacts all profit measures.

“We are naturally concerned about the scale of this year's levy and the burden on shareholders and will be actively engaging in the FCA's review of the allocation and application of the future levy.”

David Bellamy, chief executive, said: “Disappointingly, our profits have been impacted by the FSCS levy, which has almost trebled from £6.9 million to £20 million. Despite this significant cost, the sustained growth and maturity of our funds under management continues to provide growth in the underlying post tax cash result and the Board has declared a 20% increase in the interim dividend to 10.72 pence per share.”

New investments grew to £4.4 billion and net inflows increased to £2.7 billion taking total funds under management at the half year to £55.5 billion, up 6.7% since the beginning of the year.

The newly acquired firm, Rowan Dartington, employs around 100 people, including 31 investment executives across 10 regional offices and has in excess of £1 billion funds under management. The initial outlay will be £19m.

Mr Bellamy said: “St. James's Place has been looking at providing a Discretionary Fund Management service for some time and the acquisition of Rowan Dartington provides an excellent platform from which to build this additional service for our clients.

“The supplementary services, which include advisory portfolio management, direct equity, trust and charity portfolio management, will broaden the range of investment options we can offer to existing clients and enable us to access new clients who value such services.”