UPDATE 3-UK money manager St. James's Place says demand for advice 'stronger than ever'

* FUM up at 135.46 bln pounds at end-March

* Q1 net inflows 2.90 bln pounds vs 2.37 bln pounds last year

* Shares up 2.5% (Adds CEO comments from call, updates share move)

April 29 (Reuters) - Britain’s St. James’s Place said on Thursday that its funds under management and inflows surged in the first quarter as clients sought to commit savings to longer-term investments, and that demand for investment advice was stronger than ever.

SJP shares rose 2.5% to 13.56 pounds on the UK blue-chip index by 0732 GMT, nearing the all-time high of 13.67 pounds hit earlier this month and extending a 17% increase this year.

Over the past few quarters, SJP has seen rising demand for its wealth-management services as more investors sought financial and retirement advice, while government stimulus during the pandemic also boosted sentiment.

That marked a turnaround from fund withdrawals by panicked investors in the initial months of the coronavirus outbreak last year because of concerns over the economy.

“Although COVID-19 restrictions and economic uncertainty continue, the demand for trusted advice is stronger than ever,” Chief Executive Officer Andrew Croft said.

Croft added that robust business from year-end tax planning took gross inflows for the quarter to 4.79 billion pounds.

Funds under management jumped to 135.46 billion pounds ($189 billion), surpassing the previous record of 129.3 billion pounds last year and 103.52 billion pounds in the March quarter in 2019. Net inflows rose to 2.90 billion pounds from 2.37 billion pounds.

“Although ... this high growth rate might not follow in coming quarters, we believe that the growth in gross flows should continue in quarters to come,” JP Morgan analysts, who have an ‘overweight’ rating on the stock, wrote in a note.

Croft told Reuters that SJP was facing softer comparatives, given a pandemic-hit 2020, adding that targets were not being upgraded despite a strong quarter due to a potential change in spending patterns as lockdowns ease.

“I am sure people are going to go out spending money, everyone is going to take a nice holiday at some point... we will probably get back to a more stable pattern in the final quarter,” he said.

$1 = 0.7165 pounds Reporting by Muvija M in Bengaluru; Editing by Rashmi Aich, Hugh Lawson and Emelia Sithole-Matarise