* Q3 funds at 112.8 bln stg vs 109.3 bln at end-June
* Net inflows of 2.1 bln stg; pensions get 1.5 bln
* Shares up 0.9% (Recasts, adds detail from statement, background, CEO quote, share reaction, analyst reaction)
By Simon Jessop
LONDON, Oct 22 (Reuters) - British wealth manager St. James's Place said funds under management hit a record high in the third quarter, as its affluent clients put more cash into their pensions.
Total funds at the end of September were 112.8 billion pounds ($146.35 billion), up 3.2% from 109.3 billion pounds at the end of June. Net inflows were 2.1 billion pounds, of which 1.5 billion pounds was into pensions.
From its base in the market town of Cirencester, St James's Place has grown rapidly in recent years, profiting from growing demand among retail clients for face-to-face financial advice.
As well as helping with pensions, insurance and tax-related issues, the company also parses the investment market for best-in-class money managers, often giving them billions of pounds to run on behalf of its clients.
"In what remains an uncertain external environment, these figures once again highlight the resilience of our business model," Chief Executive Andrew Croft said in a statement on Tuesday.
JPMorgan analyst Ashik Musaddi said the results were slightly ahead of consensus and broadly in line with his expectations, flagging an 'outperform' rating and 1,179 pence price target on the company's stock in a note to clients.
Despite taking in fresh money, clients' willingness to make discretionary investments other than into pensions and tax-free savings was subdued given uncertainty over Britain's exit from the European Union.
"Brexit continues to remain an overhang on SJP’s gross flows momentum in the short term which is key for cash earnings and dividends," JPMorgan's Musaddi wrote.
At 0724 GMT, shares in SJP were up 0.9%, among the top gainers in Britain's FTSE 100 index.
The company has also faced other challenges.
At the start of the period, the company withdrew a large investment mandate from fund manager Neil Woodford only after his flagship fund was suspended, after the fund ran out of cash to pay investors seeking to leave.
The fact SJP's mandate was invested separately to the suspended fund, meaning none of its clients had money trapped, had "reinforced the business model", Croft told Reuters.
It has also faced criticism over its fee structure and the perks it offers to its best-performing 'Partners', the network of financial advisers who meet clients across the country, one of which included a cruise.
"It isn't a holiday; there's a lot of business that gets conducted on these trips," Croft said, although changes would be made. "We're reviewing the overseas business meetings and, whilst we're doing that review, we're not having any."
Despite that, client retention remained strong at 96%, it said, only slightly below the 96.2% seen in the same period a year earlier.
($1 = 0.7708 pounds) (Reporting by Simon Jessop, editing by Sinead Cruise and Dale Hudson)