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Martin Bamford: Why does everyone love to hate SJP?

Martin Bamford

The rise of populism as a political trend has resulted in some interesting new words added to our already-rich lexicon. Last year saw “Brexit” named word of the year by Collins Dictionary, after its use rose by 3,400 per cent.

Usually fruitless online debates about politics also resulted in the implied insult “snowflake generation”. This is used to describe young adults viewed as being less resilient and more prone to taking offence than previous generations. In my experience, it is not always only young adults who can be characterised in such terms.

Allow me to introduce you to another new term: triggered. According to Urban Dictionary (the font of all slang word knowledge) triggered means getting filled with hate after seeing, hearing or experiencing something you cannot stand.

We tend to get triggered within retail financial services. You only have to read the comments on any Money Marketing article referencing the activities of St James’s Place to witness this in action. It is pretty clear members of the IFA community are not its biggest fans. But here is the thing – and this requires a blasphemy warning – I really like SJP.

I like its branding. Everything about the way in which SJP presents itself absolutely hits the spot. Unlike most advice firms, it knows what it stands for, what its proposition is and how this is presented to clients.

I also like its advisers. When I was a young buck of a broker consultant, I looked after some excellent advisers who subsequently sold their souls to SJP. I have come across SJP partners who embrace true financial planning at Institute of Financial Planning branch meetings. Even our local county councillor is a SJP partner, and he is a thoroughly nice chap.

Something else I like is its profitability. As a business owner, I know how challenging it can be to be consistently profitable. There is downwards pressure on fees at the same time as constantly rising demands for regulatory levies, accreditations, staff costs and insurances. We see how many firms are struggling to turn a profit. But SJP has profits in spades.

Of course, what it also has is a restricted advice model and the use of vertical integration. These are two factors I do not like.

Seemingly as a result of these factors, the Sunday Times has been rather critical of late about the apparent opaqueness of the SJP charging model. Whether it is truly opaque or just on the premium pricing side of the norm for a restricted adviser, SJP claims its clients are largely satisfied with what they pay and, most importantly, the value they receive.

Here is where I think snowflake generation advisers getting triggered by SJP stories could stand to improve. Instead of getting filled with hate after reading about a business model you cannot stand, try a different approach. Demonstrate to those clients of SJP advisers that what you offer as an IFA is better value.

You might need to improve your proposition and branding first. You will, of course, have to demonstrate profitability, as you convince clients to move from this behemoth managing close to £80bn to your provincial practice or one-man band. You will also need to demonstrate complete trans-parency when it comes to your remuneration.

We have an opportunity to do just this, as a local and very well established firm has just sold out to SJP. Whether or not we can convince some of its best clients and professional contacts to take a fresh look at their adviser relationships due to the move from independence to restricted is yet to be seen. One way we will not do it is by moaning about it online.

Martin Bamford is managing director of Informed Choice

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Comments

There are 40 comments at the moment, we would love to hear your opinion too.

  1. Well said Martin.

  2. This needed to be said and said loudly even if mostly disagreed with, apparently, by most IFAs. Well done Martin Bamford. I wrote ‘apparently’ as speaking with a number of colleagues I frequently hear similar sentiments. Credit where credit is due but yes I do not entirely like all they do and appear to present but as a profitable brand they seem to be well out in front at the moment. Maybe we must learn something from their success.

  3. Muddy declaration of restricted Advice status with a strong outwardly suggestion to clients of being independent and even murkier, charging structure which flies in the face of RDR – coupled with a regulator that wants to turn a blind eye to it all probably explains a lot!

    • I don’t think I could have said it better. Having said that; I personally have no strong opinion about SJP but understand where the angst come from. Nice that a fellow IFA thinks there is a snowflake generation of advisers. Snowflake? Is that something that drops from the sky or just a stupid buzzword that doesn’t mean squat in context? My fellow IFA’s / advisers have listed more than 13 reasons why they think SJP is up to no good and should be viewed the way they are. Restricted advice posing as something else. Why are they not up front with their status and proud? Possibly, because they’re not?

  4. “Something else I like is its profitability. As a business owner, I know how challenging it can be to be consistently profitable”

    Profit is obviously a desirable state of affairs since the alternative is loss. But it is a mistake to praise it to the skies in the way this article implies. After all arms dealing, drug dealing and prostitution are also (apparently) highly profitable. How that profit is made is more important and all of us in this profession have only one source of income which is the client. I think it is in this specific area that SJP attract criticism. Not sure that anyone has ever suggested all SJP reps are evil or unpleasant people.

  5. At last common sense prevails.
    After all the dross written over the past few weeks about a brand that at least knows what it offers and does it professionally.
    Like SJP or not (most of you out there probably don’t even know what you don’t like anyway), SJP appear to be a brand that keeps on going, recruits some very good adviser firms and makes money doing it.
    And before the comments come flying in NO I AM NOT part of SJP.

  6. Personally what i dont like about SJP is
    1- exit penalties for 6 years on their plans.
    2- high charges
    3- advisers ( or the ones that i have come across) who say their advice is free
    4- ongong services compulsory
    5- cosy relationship with FCA
    6 no clearly stating they are restricted

  7. Holier than though!!!

  8. At last a question I can answer!
    1/ They pretend to be IFA’s and are not
    2/ They work on behalf of SJP-Not clients
    3/ They charge excessive fees
    4/ The early transfer penalties are eye watering
    5/ Many of their own funds are not great performers and the range is limited
    6/ Most of their external funds can be got cheaper elsewhere
    7/ The ‘Partners’ I have met tend to be smarmy foot-in-the-door types from a previous era

    • Steve Underwood 10th March 2017 at 3:37 pm

      Martin could not have said his better. However in answer to your questions – and I have no axe to grind.
      1. As far as I am aware they do not PRETEND to be an IFA. Most IFA;s pretend to be independent.
      2. If they really worked on behalf of SJP and not their clients their business model would not succeed – and it does.
      3. People in glasshouse should not throw stones. What is excessive? Some of your own clients I am sure will say that your fees are excessive.
      4. … and I am sure some of the firms that you put your clients into are comparable.
      5. The range of funds that they have, along with the due diligence that they perform on their funds, is far greater than the one-man band IFA can even dream of achieving. You are speaking here from a point of ignorance rather than knowledge.
      6. They may well be cheaper but people pay for quality. They may lose on the roundabouts but gain on the swings.
      7. Very subjective and probably sums up you.
      8. Grow up, get real and stop adopting the British way of kicking success.

      Like or loathe, they are a successful brand that has been built on delivering value. Get over it.

      • Just to be clear on a couple of points Steve, SJP are very good at marketing and as part of that the pretend a number of things, such as that there are Partners and a Partnership for example – to have to trawl through small print to discover that these are simply marketing terms is disingenuous at best. SJP, as a firm, do not pretend to be independent however, their whole structure is a little vague and I have overheard one of their salespeople use the wonderful phrase “I outsource my investment management to SJP” for example.

        The point about their salespeople working for SJP rather than the client is accurate since this is the legal nature of the relationship – they represent SJP – their purpose is to sell SJP product and they are remunerated for doing so. This is not inherently bad, since a salesperson in a Jaguar dealer is remunerated for selling Jaguar product and nobody would have a problem with that surely – that salesperson will do their best to find out how their product meets what I am after and sell the benefits but I wouldn’t expect them to tell me that frankly I’d be better off going to a car supermarket as a Jaguar may not really be what I need or I could get pretty much the same thing but cheaper.

        On the investment points, it is not ignorant to say that their range of funds is limited – it is greater than it was since i remember when they didn’t even have a corporate bond fund in their stable, but it is limited (look at their fund list). The point about being able to buy the external funds cheaper elsewhere you seem to have missed – you are buying the same thing – if you can buy the same thing in two places but one place sells it significantly cheaper, there is no compromise in quality in buying from the place selling it cheaper.

        They are indeed a successful brand. Their marketing is superb. They have a recognisable brand and many loyal customers who have bought their product and will buy their product again. That isn’t to say that I can admire other aspects of what they do and the way that they do it and I will continue to point out to people some of those aspects that I believe they should be wary of.

    • Spot on Bill, spot on

  9. You have sold to SJP ? ( We have an opportunity to do just this, as a local and very well established firm has just sold out to SJP) well done and good luck !

    • We have not sold to SJP. Another local, well established IFA has recently sold to them. We have an opportunity to demonstrate to their clients they should move to us. Apologies for the poor sentence construction!

  10. I like this piece Martin and I agree with what you are saying. The Sunday times and Ali Husain have targeted SJP and a lot of this reporting is at best inaccurate or at worst down right fabrication. Ali keeps stating that most Advisers receive a salary which we all know is rubbish, he attacks the incentives such as cufflinks , hotel stays and holidays as some type of underhand practice. I have no problem with people being rewarded for achievements and in this case there in no conflict as no mater how many cufflinks or holidays they receive they still sell the same products -there own!! then there’s the “disgrace” of certain benefits etc. being withdrawn if targets are not met. Wouldn’t this be the same in any business ?? If business isn’t being produced the employer will in the end get rid of that person ?
    Last weeks article was barrel sparingly the lowest of the low painting a picture of Army’s of ruthless salespeople stitching up Alzheimer’s and dementia suffers. Ali Husain is doing himself and his paper no favours here and I have no time or respect for this type of low life reporting (how is Ali paid and incentivised Id like to ask?). I do not care for SJP and its charging structure but I do not see them as the ruthless uncaring villains that the Sunday times are painting them as. We are all Financial Advisers we all work in different ways and this type of reporting is counter productive to the Industry as a whole not just SJP.

  11. A change of status from IFA to SFA, snowflake advisor. Very good.

  12. I am quite disappointed that Martin has chosen to canvass these views on MM. The whole idea of providing financial advice is to “add value” to our clients financial well being. The consequence of looking after our clients is ultimately that we get rewarded for our endeavours.

    SJP seem to think this works the other way round, in that the client has to pay a significant proportion of their wealth to have the privilege of “advice” from a SJP partner who can only flog them what SJP deems suitable. How many SJP partners can hand on heart say, they won’t flog a product if it’s not suitable for their clients circumstances. The whole business model revolves around selling. We are no longer in the days of Allied Crowbar, General Portfolio and the like. SJP doesn’t seem to get this. It’s an insult to the professionalism of our industry.

  13. Martin
    Fair enough points but I think your phrase ‘sold their souls’ says it all
    I am sure if you meet these SJP clients you will save their souls
    The ex SJP ‘satisfied’ customers will then know what it is to be a Financial Planner client
    The point you make that they make good profits is presumably because of the bits you don’t like – restricted and vertical integration?
    @ Bill Porter
    A comprehensive list so I won’t bang on!

  14. No issue as long as any business sees ALL its clients it is charging an ongoing fee for. Need evidence review completed for ALL clients. SJP ongoing advice fee for pensions is 0.25%, need a lot of pension clients to earn reasonable income. Can you prove you are servicing them as well as hitting your new business targets?

  15. All true no doubt, but who gives a sh…..t, not the FCA so why should we worry?

  16. I don’t really follow your agenda Martin. Being polemic for the sake of it?
    I don’t hate SJP and never have done. I just have nil respect for them. Bill Porter makes some valid points as did Neil Liversidge & Chris Gilchrist.
    As to your other contentions you evidently didn’t read any of my previous posts on the topic. Over my career (which was longer than SJPs) I came across several clients who were with them. Every one jumped ship and came across to me. When that happens you begin to realise the veniality of the firm who point blank refuse to give you any information or transfer assets.
    You may have found their personnel good chaps, the ones I have come across- both male & female (the latter in my exoerience not meriting the title ‘lady’) made Trevor Deaves and Roger Levitt look fairly respectable.
    Yes, and I was approched several times to joinn their motley crew. If this was the same approach as that used to attract clients, it gives used car salesmen a good name.

  17. Largely agree Martin but there is one point you might like to re-visit.

    Since RDR, SJP’s distribution arm has suffered increasing losses as reported by MM. Any comparison to another adviser firm that isn’t also a provider is therefore misleading. Some might suggest that it looks like SJP’s investment side is cross-subsidising the advisers and if so it could breach the RDR rules (adviser charges must be a true reflection of the costs of advice). But that’s another story.

  18. I cannot disagree that there are some decent SJP advisers, that their branding and sales training is top-notch and the company has a very clear vision but, at the same time, their culture is one which leaves me with concerns, rooted in the 80’s as it is. All the anecdotal evidence suggests that there not insignificant numbers of advisers who can be disingenuous regarding their status and how they explain the charging structure to clients and this comes from the top down. I have been at a seminar where the SJP recruitment director has contemptuously dismissed the need to explain the IFA v Restricted issue as “the public doesn’t understand it”.
    With regards to profitability, it is true that deadwood does need to be removed at some point. However, like many firms in today’s ‘gig-economy’, SJP pretends that its ‘partners’ are self-employed when clearly they are not due to the consequences of missing targets, what they can sell etc. This confers a competitive advantage not enjoyed by firms who do play by the rules and it would be interesting to see how their business model, profitability and so on would look if HMRC took a closer look at them as they have done to other organisations.

  19. Answer to the headline question : its a bit like Barcelona the other night – appreciate the flash football and the style but the bending of the rules was a bit too much.

  20. No smoke without fire.

  21. Well done Martin. Couldn’t agree more with everything you have said. I am not an adviser – been in provider land all my career. 5 or 6 years ago one of my sons amazed and pleased me by telling me that he had met a couple of times with an adviser about saving some money now that he had started to earn a bit more. He had taken out an ISA and a personal pension with SJP – and was saving decent sums. No IFA was interested in talking to him without requiring a fee (quite naturally) he felt he was unable to pay. Last year he put down a substantial deposit on his first house and both his ISA and PPP are doing fine. The SJP adviser enthused him about saving. As Martin said, at some point my son may recognise the better value offered by an IFA – but without SJP he may never have got started. Stop knocking them all the time and get on with improving your own propositions.

  22. What makes me giggle about a lot of the comments made by IFA’s about SJP is that all those who mock the company don’t make a judgement from hard evidence just what they pick up on forums and the like. I will put my hands up I worked for SJP for over 15 years and am no longer in the industry. However there must be a reason why IFA’s who say they are IFA’s for life do their due diligence look for what is best for the clients and join SJP.
    Press articles are press articles but clients don’t stay with a provider if it doesn’t add value in the long run. Just look at the growth in advisers and this shows the overall offering for Client, adviser and Company all work. After many years talking to hundreds of advisers I think I know where the clients would prefer to be. A one man band above a high St shop or aligned with a company making money and worth in excess of £2bn.
    As I say I no longer work for SJP so this is a personal view from the outside before you have a go!

  23. The reason some love to hate SJP can be summed up in one word – envy!

  24. Well we live in a world where most of you are identified by what you do for a living and not who you really are. There’s plenty of room for all of you, I am not an SJP person, although they did try and recruit me. Very reminiscent of the Kings suite of cloths. However there is nothing wrong with a bit of selling, even if the FCA is trying to breed it out, there aren’t to many ques outside IFA offices are there. Even lawyers accounts and most people out there have to their expertise, they just don’t realize it.

  25. Shabby Life, Hambro Strife, Allied Crowbar… you get the drift, you can put lipstick on a pig…but of course when the clients stray in the path of a decent IFA they are easy pickings. Unfortunately most IFAs can’t afford to take on small clients because they, or their Ltd Co are ultimately liable when things don’t go to the customer’s plan whereas a network (that is all SJP are after all is said and done) takes the few complaints that arise on the chin, just a bank would. Glad I’m out of this madhouse. BTW, WTF is a snowflake?

  26. SJP are salesmen
    When Honister folded, those looking for a home similar to the one they no longer had jumped to SJP. It was any easy transition, in fact SJP recruited some of the area managers to zombie walk the advisers in. I was offered a large cash sum to go on board and the pretentious Partner title Talk about self inflating your ego….. or purposefully conning clients into thinking your better than you are … I just called a friend who worked for SJP and asked for quotes, I asked the three managers who interviewed me but couldn’t get a straight answer on the cost of products to clients, and at five percent initial charges for ISA and OEIC i was out … try explaining five percent to clients …. then again I’m guessing the Partners don’t… I guess there is no initial charge like there is no exit penalty … Its been clear for many years that the FCA are turning a blind eye to SJP still indemnifying commission … it’s a disgrace that this is still allowed.. imagine if all people with a surname starting with … err … S… yes .. S will do… were allowed to hold onto a five thousand divi allowance now everyone else is losing most of there’s …. and sales incentives too …. sorry Martin but SJP should be renamed Salesmen and IFAs could be clearly differentiated from them

  27. Martin I’m a huge fan of profitability and selling premium. That said, how SJP gets to be so profitable and how they get to charge customers as much as they do, bears questioning.

    Hannah Goldsmith’s book “Retire Faster” is worth a read and she’s an engaging speaker on the subject.

    https://www.amazon.co.uk/Retire-Faster-Practical-Retirement-Investment-ebook/dp/B01MA30FRA

  28. Maybe the rest of the industry would warm to them if they did the following Martin:

    1) Operate factory gate pricing on their products and charge fees for not recommending products (like the rest of the industry)
    2) Reduce the proportion of complaints that are upheld against them (96% I believe)
    3) Make it easier for IFAs to obtain all of the information that they request, and to do so in a timely manner.

  29. The issue for me is with the product structure and not the behaviour of the advisers/salespeople, there are good and bad in all areas, but I would like to know who at the Regulator sanctioned their bond structure under RDR?

    It’s a good job that Advisers have the determination to take issue with these matters, as product providers have clearly lost their inertia.. their silence is deafening!

  30. As an SJP customer Martin, I was very pleased to see you speaking up in support of SJP and the work they do for their customers.
    In this world, you get what you pay for. And as the customer of an SJP adviser, I fully understand what I’m paying for, the service SJP offers and the support they provide. That’s why we chose an SJP financial adviser to guide us on my family’s financial needs.
    The pricing might seem high to outsiders but as customers we fully understand what we are paying, why we are paying for it and what we get in return. What we’re getting is consistent, good quality returns and clear, quality advice. And we’re not charged for every piece of advice. Anything relating to investments for my children, no charge. Advice on and review of whether we should remortgage now or when the fixed rate term runs out – no charge.
    For all the industry and media blustering about SJP and how it is financed, the element everyone has ignored is what do its customers think.
    For the avoidance of doubt, no I don’t work for SJP. I work for an insurer. And this customer is very happy with the service SJP advisers provide. I have recommended my adviser to friends when they’ve asked for the name of a good financial adviser, and these friends have come back and said thanks too. The advice they received was exactly what they needed. Isn’t that what the industry wants?

  31. Never has so much been said about so little ?
    This Industry has an ability to self distruct by looking for the bad in our competitors, and knocking the opposition is not good for your own professional credibility.
    Competition is what you are when you are successful and what you fear when your not ?
    Having worked in the Industry for over 33yrs on all sides of the fence, just be the best you, you can be, and your clients will value you, whatever your business card may say.

  32. Julie, I wouldn’t expect you to understand the inherent difference between what an SJP Partner does and an IFA, because you/your company flog products !!

    The most successful broker consultants are not those that bang down the doors of their IFA’s telling them how wonderful their products are, but those who actually take the time out to understand the IFA’s needs and offer a complimentary service in relation to clients expectations/requirements.

    In my time as a fee orientated EB consultant, there are very few Insurance company reps that I would expose to my clients.

  33. @Julie

    Well I’m glad your happy. As the saying goes “When ignorance is bliss, it is a folly to be wise”. Perhaps you are just unfortunate in not having met a decent IFA. Perhaps they chose not to deal with your insurance company. As I said above – every single SJP client that I came across came over to my firm, that surely must tell you something. And I am by no means a salesman.

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