SJP: We have no plans to join Aifa
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St James’s Place says it has no plans to join Aifa following the trade body’s decision to open up its membership to restricted advisers.
Speaking to Money Marketing following the firm’s results for the first half of 2011, chief executive David Bellamy welcomed Aifa’s move but said he had no intention of joining up.
He says: “We are not members of Aifa and we have no plans to become members of Aifa. But I think what it is doing is very sensible and consistent with the fact that there is currently a community of IFAs and a number of those will become restricted advisers under the new definitions.
“It seems eminently sensible that Aifa recognises that fact and simply broadens its definition if it does not want to see its membership shrink.”
The results show a 52 per cent increase in profits for the first half of 2011, from £36.3m to £55.3m. However, the distribution arm of the business failed to make a profit, compared to a £5.9m profit in the first half of 2010, as SJP’s investment arm slashed the commission it pays its advisers.
Bellamy says the fall is due to the firm moving towards an equalisation in the remuneration paid to advisers, regardless of the wrapper chosen. He says by the end of the year all wrapper commission will be 3 per cent, compared to the 3.6 per cent currently paid on offshore bonds.
The firm, which is 60 per cent owned by Lloyds, reported an 8 per cent increase in funds under management in the first six months of the year to stand at £29.1bn. It announced an interim dividend of 3.2 pence per share, a rise of 58 per cent.
Bellamy says the firm will be looking to broaden its investment proposition later this year and re-launch its academy. Currently 60 per cent of SJP’s 1,601 advisers are diploma qualified.
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Readers' comments (10)
John Hutton | 28 Jul 2011 2:57 pm
Perhaps they would like to join SIFA instead!
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Edward Holder | 28 Jul 2011 3:02 pm
I am still a little shocked that an aggressive tied sales force such as SJP can now, in principle, join AIFA.
Surely this will only serve to confuse the consumer?
After all, why suspect a 'wealth manager' with the AIFA badge on his business card of being anything other than an IFA?
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Anonymous | 28 Jul 2011 4:04 pm
It's funny how so many IFAs insist on bashing SJP, when the majority of the Partnership is made up of 'converted' IFAs... No up front charges on Inv Bonds or Pensions, winners of numerous wealth management industry awards and increasing business volumes. Facts that a lot of IFAs would surely like to quote for themselves...ah, but can't.
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Incompetent Regulators Award Team | 28 Jul 2011 4:17 pm
Shows how much confidence SJP have in AIFA. And SJP is profitable!
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M Walker | 28 Jul 2011 5:04 pm
"No up front charges on Inv Bonds or Pensions" mmm what about the reduction in yield, thats far more important. SJP sell their concept to advisers on the back of building a valuable renewal from commission, to sell on. Not sure how this fits post RDR ?
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Kevin Archer | 28 Jul 2011 5:45 pm
Commission cuts! Oh dear, all the Advisers who jumped over the fence will now be jumping back again. It's a funny ol life. Still retirement date is getting closer.
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@Anonymous | 28 Jul 2011 4:04 pm | 28 Jul 2011 7:25 pm
Dear Mr SJP adviser
You are correct many former independent advisers are attracted to SJP with offers of attractive buyouts and lower compliance requirements. However, because their new status is tied they are unable to offer independent advice FACT! SJP get around this by using an introducer agreement passing this business to an IFA based in Scotland for top ups etc with a commission share agreement. The trouble is the IFA never actually see the client and tied agents are not allowed to offer advice on whole of market funds and products. How SJP square this with the FSA I just don’t know - maybe they have friends in high places!
Further because SJP are not independent their reps are obliged to use SJP Distributer Influenced Funds (DIFs) which can increases costs and complexity and reduces choice.
If you take Aequos and do a generic DNA score you will find out of 70 pages of funds they don't get a look in until page 24 with only two funds.
What SJP is very good at is slick marketing and in this respect they outclass most IFAs.
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Anonymous | 29 Jul 2011 8:59 am
Would prefer to post under own name but current employer would frown upon comments.. sorry.
Have I missed the point here? As a vertically integrated business (manufacturer and distributor) how does this differ from being a single tie? AIFA have said single tied advisers will not be allowed to join so little surprise that SJP have no plans to join
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Anonymous | 2 Aug 2011 10:52 pm
It is amusing to read the comments on here knocking SJP. In my experience their advisers generally are better qualified, more experienced and more professional than the typical IFA. They have better clients and deal with much larger investments. The marketing is fantastic, most of their clients love them, they win investment award after award, the investment model and due diligence has no equal in the IFA community, and they just declared a profit of £330m on an EEV basis. They don't outclass you in terms of slick marketing, they just outclass you.
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Anonymous | 2 Aug 2011 11:00 pm
I might add that SJP is not tied. It offers whole of market advice on term assurance, WOL, mortgages and annuities and panels for pensions. Sensibly it restricts its investment offering to ensure all advisers benefit from its due diligence, resulting in a safer environment for its clients and advisers. Access to the wider universe has too often meant that ill educated IFA's have had the freedom to wreak havoc on client finances.
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