James Hay is reviewing its older products, following its well-publicised issues with the Elysian Fuels biofuel investment scheme.
James Hay revealed last May it is involved in a legal dispute with HM Revenue & Customs around unpaid tax on biofuel scheme investments.
Speaking to Money Marketing, James Hay chief executive Alastair Conway says it is investigating its problem areas with a total product review.
Conway says: “We are doing a complete review of all our older products to make sure we look at anything we might want to run a different way, if we need to modernise a product, or if we need to remediate something that’s not quite right.”
He says: “Some of our older products were very much what the market demanded 10 years ago, but the danger of not going back and looking over them at some point is something then emerges that you can’t resolve.”
Conway adds: “Once you’ve looked at the whole portfolio it’s evident what needs more work, then we have gone case by case after that and set up a timeline for executing it.”
Conway says the two major costs for James Hay in 2017 were the additional resources needed to do the product reviews as well as redundancy costs.
However, it was not confirmed how many people or what roles were made redundant.
James Hay parent IFG Group reported its 2017 results yesterday, including exceptional costs of £8.8m, which it said “increased materially” because of legacy issues relating to “administration and documentation of advice”.
It said those costs are a combination of remediation and legal costs and provisions for paying clients redress.
According to the results statement, assets under administration for James Hay grew 14 per cent to £25.5bn last year. However, operating profit at James Hay decreased from £5.2m to a loss of £2.3m.
No update was given in the results on the impending sale of IFG Group-owned advice firm Saunderson House. The £5.1bn IFA was put up for sale two months ago.