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Profile: ‘A lot of people don’t understand the role of SJP in our businesses’

Oakmere Wealth Management founder discusses being a partner practice of St James’s Place

It is fair to say that few advisers sit on the fence when it comes to St James’s Place. The restricted national firm has attracted criticism in recent years, particularly in relation to its vertically integrated business model.

However, even the critics who view it as a distributor rather than an advice firm acknowledge its success in bringing some much-needed new talent into the industry, especially women and the second-careerists who come through its training academy.

SJP nears 4,000 adviser mark

Someone who has chosen to set up her business with SJP is Oakmere Wealth Management managing director Carla Brown.

She launched her own firm in 2011, having researched all her options and deciding that, as it was her first business, she needed some help.

“I did due diligence, exploring how to establish a firm and who to do it with. I looked at becoming directly authorised and at a number of networks,” she says.

“Some of the networks went bust because of the financial crisis, so I wanted to partner with a big firm that would give me the support I needed.”

As part of her due diligence, Brown also spoke to some long-standing SJP advisers and found they were still happy with the firm, just as she is eight years down the line.

She acknowledges the criticism SJP receives from some quarters, but believes a lot of it is caused by people not really understanding the business model and assuming all SJP partner firms are run the same way.

“A lot of people don’t understand the role of SJP in our businesses. We are all independent businesses working under the SJP umbrella. My practice could be completely different to the practice in the next village,” she says.

“It is not a franchise model and we have a great deal of autonomy as to how we run our firms.

“There is a charging structure which is set by SJP, as there is with any product provider, but we have some discretion within this to adjust advice charges based on the individual needs and circumstances of the client.”

Brown says SJP provides its partner firms with bespoke and tailored support. “It provides the necessary infrastructure to allow us to spend more time with our clients and to focus on the future of the business, rather than spending time on reports to the FCA – which you have to do if you are directly authorised,” she says.

Training courses, continuing professional development and promoting the benefits of being chartered also feature highly as ways SJP supports its advisers.

“There is always something you can go on and learn,” says Brown. “I put my adviser through the SJP Academy last year and it has asked me to speak to women thinking of joining, to promote advice as a career.”

SJP spends another £35m on replatforming

Many advisers feel they need a bit of hand-holding when they start their first business, but once established with some experience under their belt, some prefer to go directly authorised. For Brown, it makes sense to remain with SJP, as if it is not broken, why fix it?

“Every business changes over time and the focus might change in the future. But it works for my business and my clients are happy,” she says.

Service has always been an important consideration for Brown. Prior to setting up Oakmere, she spent four years as an IFA with HSBC’s private client team, dealing with high-net-worth clients.

She left because she felt the bank was targeting new business and not paying enough attention to its existing clients.

Brown makes it clear to her clients that, as a restricted adviser, she can only advise on the products and services that SJP makes available to its partner firms, but she does not feel this hampers her ability to do a good job.

Five questions

What is the best bit of advice you’ve received in your career?

Not to wait for people to come to me but to go out and find them.

What keeps you awake at night?

I sleep very soundly but I do worry about my 16-year old son’s GCSEs.

What has had the most significant impact on financial advice in the last year?

Mifid II – it has changed our process and we now issue quarterly valuations and cost documents.

If I was in charge of the FCA for a day I would…

Get a better handle on the professional indemnity market. I know IFAs are coming out of the defined benefit transfer market but that’s an area where we need specialist advisers.

Any advice for new advisers?

To spend as much time as possible with advisers and ask what works for them.

“I’m interested in lifestyle financial planning and adding value through my relationship with clients. I have more freedom now as a restricted adviser than I had as an IFA at HSBC,” she says.

“Through SJP, I can access unique funds and fund managers available to institutional and overseas investors. I am confident in SJP’s due diligence on external providers.”

However, Brown thinks there is not enough knowledge about the difference between independent and restricted advice among the general public, and would like to see more clarity and information on this. It reflects her wider concerns about a lack of financial education among the public in general, but particularly in schools.

“My son is a teenager and has had no financial education in school,” she says.

“When I was with HSBC, I went into primary schools to help them as I was shocked it wasn’t happening.

“The schools didn’t have the knowledge or the resources, but we need to teach children the basics, like opening a bank account, how interest works, what mortgages are and how investments work.”

At the more sophisticated end of the investment spectrum, Brown was recently named Best Financial Planner at the Enterprise Investment Scheme Association’s annual awards. Does she feel more advisers should look at EISs for their clients?

“In the right circumstances, they should be considered but they are not mainstream investments. They are seen as effective tax planning but they are higher-risk,” she says.

SJP improves gender mix as academy adds 40 graduates

Brown is happy with the way the advice industry is shaping up as a profession.

“In the 1990s, it wasn’t unusual for me to be the only female in the room at a conference or team meeting. If I went to industry events with my husband, people would speak to him, assuming he was the adviser,” she recalls.

“It’s great to see how it has changed, with more women in the industry, but there is still a long way to go.”

Brown concludes: “It’s not seen as a sexy job – people see it as dull – but it can be fascinating.”

CV

2011-present: Managing director, Oakmere Wealth Management

2007-2011: IFA in private client team, HSBC

2003-2007: Financial consultant, Cheshire Building Society

1997-2003: Trainee adviser, Black Horse Agencies then wealth adviser after acquisition by Bradford & Bingley

1995-1997: Pension reviewer then underwriting department, Hambro Assured

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Comments

There are 21 comments at the moment, we would love to hear your opinion too.

  1. When you are the most expensive product distributor in the market (sorry I cannot use the term advisor), I think it is quite easy to understand the business. In other words you act in your own/product providers interests rather than that of the client. I got to know an SJP rep a few years back, and he openly admitted he charged 4.5% up front to manage a SIPP with 1.50% ongoing charges per annum. He also told me he had less than 70 clients and that he wasn’t really looking for any more. I get the feeling even with a modest level of funds under management, he was doing quite well for himself.

  2. “A lot of people don’t understand the role of SJP in our businesses. We are all independent businesses..

    There’s that word, bit worrying!

  3. I find it quite worrying that you don’t seem to appear to understand SJP’s role in your business.

    You sell their products and nobody else’s, regardless of whether there is a better option available (which in the majority of cases there will be).

    By all means correct me if you like, but that’s my understanding of what being an “SJP partner” is.

  4. Of course you are understood.
    Glib talk
    High cost
    Opaque.
    Restricted
    Uncooperative when an independent aquires one of your clients.
    For those who can’t start and run a business on their own.
    Employees of the brand masquerading as self employed.
    What’s not to understand?

  5. Good Afternoon

    I think that I understand SJP in your business.

    They are much like a rhinoceros, no not the endangered white one, the ubiquitous grey one;
    ‘Sharp’ at the front end
    ‘short-sighted’ and
    ‘charges a lot’

    The word ‘independent’ should not be in your vocabulary, you are ‘restricted’ to SJP products, good bad or indifferent.

    • Though the term ‘tied’ no longer officially exists, that’s exactly what SJP ‘partners’ are ~ tied (and sales target-driven) agents, in that the only ISA, investment bond and retirement accumulation products they can sell are SJP ones. They aren’t allowed to charge fees either. All remuneration is bundled into the product charges (a practice which, for everyone else, the RDR supposedly banned, like product exit charges, which still apply to SJP’s investment bonds, despite David Bellamy having stated in an interview with MM some years ago that they’d done away with in 2013). I always wondered why the interviewer didn’t check SJP’s website and challenge him on that claim.

      By way of contrast, a restricted intermediary is able to take on the ongoing servicing of, advise on and, if appropriate, arrange top-ups to any product outside his chosen restriction that the client may already hold. He can also charge separate fees too.

      The only ‘advice’ an SJP agent can offer on an existing non-SJP product is a hatchet job leading to a recommendation to effect a new SJP product.

      On cases where, despite the SJP agent’s best efforts, an adequately robust case for doing anything other than topping up something the client already has cannot be made, SJP has a referral arrangement to an IFA firm (in Glasgow I believe). The referring SJP agent then receives a cut of the resulting charge to the client. Naturally, this is considerably less than he’d receive were he to sell a new SJP product, thereby creating a very obvious conflict of interest.

      A few years ago I asked an SJP agent how often he refers business to SJP’s pet IFA in Glasgow. After a considered pause, he asked: Is that a leading question? You’re darned right it is. Why didn’t he give me a straight answer?

      For those willing to sell their soul to the SJP ethos and sell products that they know are more expensive than most alternatives available in the open market and backed by a range of funds which, to put in mildly, is a very mixed bag, I expect SJP is quite a nice club of which to be a member. But please don’t try to persuade me that it’s anywhere near as good as what most IFA’s or restricted intermediaries offer. The truth is that if you’re an SJP partner, you’re a tied agent.

  6. Amanda, can I congratulate you on your advertorial – a masterpiece of misdirection and sketchy, I could almost believe it was written by the PR department of SJP itself!

    Ms Brown is an exemplary poster-girl for the brand and clearly happy being able and used to function in a quasi-bancassurance role. If she believes she is able to work as a properly independent business within SJP then she is deluding herself and how much autonomy is a “great deal”? Is it more or less or the same as an IFA who is directly authorised? If SJP writes all her compliance reports then she must have to confirm to their criteria.

    This is as disingenuous as those SJP advisers who claim they don’t charge fees unlike those expensive IFAs. I will be interested to see how they respond to/wriggle out of the new charges disclosure regime.

    One last thing, financial education is/may be woeful but I cannot see it being improved by explaining to primary school children how to open a bank account!

    • “Through SJP, I can access unique funds and fund managers available to institutional and overseas investors. I am confident in SJP’s due diligence on external providers.”

      Wow!

  7. “We are all independent businesses working under the SJP umbrella. My practice could be completely different to the practice in the next village,”
    As in you will each use completely different platforms, products and fund panels to each other?
    No, thought not!

    • I am an IFA and proud of it, however like them or loath them which I suspect most IFA’s do, SJP provide a service which would put a lot of greedy IFA practices to shame. It’s the age old British desease, can’t stand successful businesses or individuals! The main reason why our FCA levies keep rising is not because of SJP advisers but dishonest IFA’s selling unregulated investments. So please let’s cut some slack on the never ending SJP witch-hunt and conentrate in getting our own house in order. Furthermore to suggest that this lady is their postergirl is not only outrageously sexist but also incredibly disrespectful. More you the fool!!

      • I don’t think anyone has a problem with the service SJP provide to their customers. What they have a problem with is as follows:
        1.) The partners love to call themselves independent, when they are what used to be called a tied agent.
        2.) SJP charges are high and opaque and the “adviser” get’s paid out of the product charges, which is in all but name commission, which was banned from everyone else 7 years ago.
        3.) Many SJP products are not very good, but every client of SJP gets’s shoehorned into a product which may be nominally suitable, but is certainly nothing close to the most suitable product.

        • From what I’ve seen, SJP’s service to its customers comprises periodic valuation statements with a bit of commentary that’s basically a bit of obfuscatory, nicey nicey guff, majoring on the fact that you (the client) are a member of a great club and isn’t it a wonderful place to be? It steers carefully clear of providing any specifics as to fund performance, particularly in relation to any sort of benchmark. Clients are fooled into THINKING that they’re getting great service but they’re not really.

      • Robert I am no fool, unless I have my genders mixed up, Ms Brown is not a poster-boy! Coming from a bancassurance background I can see how the SJP offer looks amazing but one thing I remember someone telling me when I became an IFA, having worked for Allied Dunbar for a number of years, was that while I had previously been looking at a picture in black and white, I would be now looking at the same picture in colour. No matter the quality of the SJP portrait it can never be anything else but monochrome. Yes they are successful but the reason I loathe them is that hoodwink clients into believing their picture is really colour perhaps because they keep everything in the dark!

  8. Hard to justify this business model in modern times. The regulator really should act.

  9. I guess after a career in Banking finance, anything must seem good, even SJP

    • Another shameful display from a male dominated group who cannot find a single word of praise for the achievements of a hard working woman within the financial services sector.

      I am sure you all don’t need reminding of the size of the advice gap in the UK and the dwindling number of advisors, especially those whom are female.

      Whichever route chosen restricted or independent, do you all really feel this is a necessary commentary for her to read today?

      • 1. Why bring gender into this conversation? The adviser’s gender is completely irrelevant to the topic under discussion.

        2. The adviser put her head above the parapet in what is, effectively, an advertorial. She clearly understands the controversial nature of the relationship between SJP and the rest of the advisory marketplace and would, I’m sure, be expecting nothing other than the reaction she has received.

        3. We all know there is an advice gap but I’m far from convinced that the solution to it is allowing SJP to unilaterally derogate from the Rules and ethics that permeate the majority of the rest of the business.

        I have personal experience (my mother-in-law) who was “advised” by an SJP rep to transfer an ISA worth over £110k that was invested in funds that were wholly suitable for her and were competitively charged to an ISA with SJP. She took a 5% initial fee plus ongoing of 1.3% from an 84 year old investor whose husband of 59 years had died two months previously.

      • Oh come on Deborah.
        Next you will be saying that any woman who worked for Bernie Madoff should be praised.
        Ms Brown has never really stood on her own feet within this industry. There are plenty of females who have started an entirely independent business and done well. It isn’t a matter of gender but of aptitude.

      • What has the gender of the adviser got to do with anything? Has anyone apart from you mentioned it or alluded to it?

        The only shameful display here is by yourself, clearly a “feminist” who thinks women should be held to a lower standard than men. Why are somehow women not able to stand up for themselves, or be responsible for their own actions?

        You seem to be suggesting that a woman should be given a free pass for trying to paint SJP and herself as something other than what they are.

        Yet in your mind, you seem to think it’s men that are the problem? If you want to know where the issue lies, might I suggest using a mirror?

      • Deborah, if the adviser had been male then he would have been a poster-boy, otherwise I cannot see any post deriding Ms Brown for being female. I employ an adviser who is totally different to me in terms of attitude, politics and gender and it works very well because we do respect eachother. To say Ms Brown should somehow not have to suffer the same microscope as others because of her femininity is to actually demean her. For her to flourish in an environment which really hasn’t moved on from the days of John Thaw & Dennis Waterman’s The Sweeney is impressive. I and others despair at her naivety however!

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