Ah, St. James’s Place (SJP), the epitome of financial sophistication—or so they’d like you to believe. In the last two years, the company has seen its share price halved. No, that’s not a typo. Halved. And why, you ask? Let’s take a leisurely stroll down the rabbit hole.
The Tip of the Iceberg
First, we had the maximum annual product management fee for 65,000 clients who had been in bond and pension investments with the firm for more than a decade reduced in July from 1% to 0.85%. How charitable! Then, exit penalties on new contracts are to be removed from April 2025. Oh, the benevolence!
But not the £47bn — 30 per cent — of SJP’s assets under management subject to exit penalties.
And let’s not forget the rumoured shift towards 80% of investments moving to passive funds. A round of applause, please.
What Lies Beneath: The Trouble with SJP
1. The Phantom Reviews
Ah, the plot thickens. SJP partners are mandated to cancel adviser charges for clients they haven’t graced with their physical presence in two years. Why the absence, you ask? Well, it turns out the advisers didn’t even get a whiff of new assets under management, so naturally, they couldn’t be bothered.
Letters for reviews? Oh, they’re about as effective as a chocolate fireguard. And those factory-produced reviews? As authentic as a troll’s LinkedIn profile. But don’t you worry, St James’s Place advisers have been busy drafting their magnum opuses, cautioning clients that they’ll be given the boot if they don’t get the advice they’re forking out for. Truly, the epitome of thoughtfulness.
2. The Orphan Client Saga
Legal challenges are looming for past fee-for-no-service cases on “orphan” clients. Ah, the irony of charging 0.5% for doing absolutely nothing. Claims management firms are targeting the wealth manager – suggesting that clients may have been charged annual fees without speaking to an adviser for years. One firm, which says it has clawed back £3.5m in fees for clients of St James’s Place since the start of the year.
3. The “Reassuringly Expensive” Mantra
SJP also currently charges clients a 4.5% upfront fee covering advice for new Individual Savings Account customers, nearly double rivals’ level. After all, expensive must mean better, right?
4. The Gilded Cage
New starters are paid with loans, trapping them in a cycle of debt. Leaving SJP becomes a pipe dream, and other employers won’t touch them with a barge pole. As of December 2022, St James’s Place partners owed their employer £315.6m in loans, according to its annual report.
5. The Exploitative Recruitment
Hire professional athletes with vast networks, milk those connections, and then show them the door within three years to avoid payouts. All in a day’s work.
6. The Cufflink Cruise Culture
Ah, the good old days of the 1980s insurance sales forces, where titles and cufflinks were more important than ethics.
7. The RDR Loophole
Failure to comply with the Retail Distribution Review? No worries, just use the vertically integrated firm exemption and tell clients their contracts are ‘free’.
8. The Misleading Comparison
When clients question charges, they’re told they’re better off than leaving money in the bank. A misleading comparison, but hey, whatever keeps the money flowing, right?
9. The Profit Hoarding
After charges and inflation, clients are left with crumbs, while SJP takes the lion’s share.
10. The Hidden Charges
Multiple charges on SJP-run investment funds are as transparent as mud.
11. The Contingent Charging Model
Free discovery meetings that focus solely on moving assets under management. Because why focus on debt reduction or charitable giving when you can hoard more assets?
12. The Leader of the Pack in Underperformance
Ah, and let’s not forget SJP’s crowning glory: topping the list of poor-performing money managers with the most ‘dog funds’. Yes, you read that right. In a financial landscape teeming with mediocrity, SJP has managed to outdo them all. It’s almost poetic, isn’t it? They’ve not only cornered the market on exorbitant fees and questionable ethics but have also managed to deliver subpar performance. Truly, a trifecta of ineptitude that deserves its own hall of fame—or perhaps, hall of shame.
________________________________________
So there you have it, the not-so-rosy picture of SJP’s fair value assessment review under consumer duty. It’s a masterclass in how not to treat your clients or shareholders. But then again, who are we to judge? After all, they’re “reassuringly expensive.”
Academy of Life Planning 