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Sifa slams St James's Place recruitment letters

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Solicitor IFA trade body Sifa has accused St James’s Place of making “distinctly misleading” claims that advisers who join the firm can continue to get solicitor referrals and is reporting SJP to the Solicitors Regulation Authority.

The SRA’s code of conduct states solicitors can only refer clients who need investment advice to “independent intermediaries”. It defines an independent intermediary as an IFA who can advise on investment products from across the whole of the market and offers a fee option.

As part of a recruitment campaign, St James’s Place regional manager of business acquisitions Darren Ginders has written to a number of advisers.

The letter, seen by Money Marketing, includes a section detailing “common misconceptions” about SJP.

Under the heading: “I will not be able to deal with my professional connections and as a result, I will lose new business enquiries”, Ginders writes: “This is incorrect. Despite the SRA’s rules, many partners are still able to maintain a successful business relationship with solicitors. In fact, any partners who are active in this arena usually prosper to a greater extent.”

Sifa received two complaints from member IFAs who received the SJP letter. Sifa managing dir-ector Ian Muirhead (pictured) wrote to Ginders, suggesting the statement is untrue and advisers who follow the advice would be “inciting infringement” of SRA rules.

An SJP spokesman says: “There is nothing to prevent a solicitor from referring a client to a partner for non-investment business, provided it is in the
best interests of the client.”

Muirhead says: “The paragraph quoted in the letter is distinctly misleading. We are aware that there are still firms giving regulated investment business to SJP salespeople. SJP is trying to keep this under the radar by suggesting they are not advising on regulated business. I will be reporting SJP to the SRA.”

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Readers' comments (23)

  • About time!

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  • SIFA has done sterling service in previously raising this concern, which resulted in the SRA formally reminding solicitors of their professional obligation to only refer clients to independent advisers.

    The fact that SJP has yet to learn from previous infractions, says a lot about that organisation and the cultural differences between them and professional firms.

    Ian is to be applauded for continuing to pursue such flagrant breaches, like a dog with a bone (pedigree, of course). Indeed, I hope that the SRA will formally request details of the firms who, according to SJP, continue to maintain "successful business relationships" with their salesmen.

    It may well be that this is a misunderstanding and that SJP actively ensure that their salesmen do 'inadvertantly' encourage solicitors to breach their professional obligations (whether in respect of regulated, or unregulated, business).

    But, if so, how do they consider their relationships to be successful business relationships!

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  • This is something that St James's Place is doing all over the country and surely either the Law Society or the FSA need to take action against St James's Place for this infringement.

    The Law Society also needs to fine solicitor practices that continue to refer clients to St James's Place as I have experienced problems getting referrals from solicitors when they have existing arrangements with St James's Place advisers.

    It's interesting that I had a approach from one of their recruiters recently who did not confirm that St James's Place was tied even though I confronted them.

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  • I've always wondered how, as only SJP Partners can provide access to SJP funds, solicitors can refer to IFAs without also giving details of an SJP Partner.

    By referring to an IFA a solicitor is effectively deciding that the client shouldn't have access to SJP funds.

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  • @Anonymous 10.15

    Your 'innocent' wonderings appear disingenous - please disclose if you have a connection to SJP.

    In any event, it is not for the solicitor to decide on the merits of individual companies, but to refer their client to a firm that legally acts for the client rather than for single product provider.

    However, why would an IFA recommend an SJP segregated fund, when he or she can normally select the underlying fund directly, and at a lower cost?

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  • Annoymous 10.15

    The Law Society rules state that solicitors should refer to an IFA - it is up to SJP whether they distribute their products and funds to IFA's but I suspect they will never do that.

    I get very annoyed with organisations that tried to circumvent rules that are meant to protect the client. People go to solicitors to get
    independent and unbiased advice - not tied!

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  • Anonyous 10.15

    You are a genius. I've always wondered why solicitors don't have to provide clients with details of every single direct sales force in the country.

    It does seem grossly unfair that clients should be denied access to the overpriced rubbish being peddled by so many esteemed organisations.

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  • @Anonymous 10.24. I am an estate planner who works with both IFAs and SJP Partners and can assure you that my 'wonderings' are genuine.

    @Peter. I didn't suggest that the solicitor be tied, rather that they give the client the opportunity to decide between the two options.

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  • Whilst I am aware how some SJP are studying hard to pass exams, I am curious how others are getting through, without actually knowing what exams they have actually sat!!

    Have SJP made special arrangements with the FSA??

    Independence indeed

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  • Dear Anonymous, what is an estate planner when it's at home? Someone who doesn't provide full advice, a will writer, a tied agent, an IFA or a deluded title? Add your name as well you plonker!

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