Gloucestershire-based wealth management group St James's Place is withholding around one third of its final 2019 dividend after announcing a two per cent drop in assets under its management.

Figures for the first quarter of the year showed the drop to £101.7billion, although net inflows rose nine per cent to £2.37billion.

The Cirencester-based firm will withhold part of the dividend (11.22p per share) but the remaining 20p will be paid as second interim dividend next month.

A dividend decision relating to the 2020 financial year will be made in February 2021 when the full-year results are published.

Chief executive Andrew Croft said performance had been strong before the decline in global markets as the coronavirus crisis took hold.

He said: "With the escalation of the COVID-19 crisis during March there was a sharp decline in global markets and this negatively impacted our funds under management, which closed the period at £101.7billion.

"Given the nature of our unit-linked business model, where we match client liabilities with corresponding assets, our balance sheet is largely protected from these steep market declines and therefore our solvency position remains strong."

While stressing St James's Place was well placed to deal with the ongoing crisis, he admitted it will have to adapt.

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.

"While 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."

He continued: "We have seen from past crises that if we look after our clients, advisers and employees, as well as our wider community, we will be rewarded in the future with increased goodwill, loyalty and retention.

"Looking ahead, the fundamental financial planning requirements of individuals remain considerable with the need for trusted financial advice continuing to increase, arguably even faster now given the uncertainty that prevails.

"The strength and resilience of our business model means we are well-positioned to meet the challenges ahead and take advantage of the opportunities for continued growth over the medium term.

"The can-do attitude with which the business has set about tackling the changes that have been forced upon us is a credit to everyone within the St. James's Place community."

Rivals Ashmore, Jupiter Fund Management and Brewin Dolphin have also reported a drop in assets under management during the same period.