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Questions on SJP link

A friend of mine has thrown in the IFA towel and joined St James’s Place. Apparently, SJP offer all sorts of financial support, a great concept for selling their own investment funds in preference to those of all the mainstream providers that the rest of us use and SJP take responsibility for all sales undertaken by their “partners”.

As a result, said partners can retire without the constant anxiety of being hounded to the grave by the FSA in the wake of yet another pernicious hindsight review of some class of business it failed to regulate at the time.

Existing business and top-ups are handled by some IFA outfit up in Scotland, so the new tied-to-SJP agent can still “advise” on everything on his books while he was an IFA but the actual transaction and responsibility for it are handled by the IFA firm in Scotland. Presumably, the IFA firm in Scotland produces the suitability letter on the strength of a copy of the fact-find compiled by the SJP partner many miles away.

Crucially, the client never actually gets to meet anyone from the IFA firm up in Scotland through which his business is transacted, let alone receive face to face advice. The advice is given by the SJP partner but the firm through which any related transactions are undertaken is a completely different entity.

This raises a few crucial questions, For example:
1: What do you say to clients who ask you directly – are you or are you not able (and willing) to provide me with impartial and unbiased advice on all the products of all the providers across the market, irrespective of whether or not you would recommend any of those companies or their products as a good place to commit or maybe leave your money – as was the case when you were a whole of market IFA?
2: Is there any financial influence at work in terms of whether or not you recommend me to put my money into an SJP product as opposed to one picked from the rest of the market?

The answer to the latter question must be yes, for the simple reason that SJP’s associated IFA practice in Scotland retain half the commission on any business passed their way by any SJP partners. It seems to me to be a most uncomfortable fudge but I would be interested to read any response from SJP so we may all know just what the set-up really is and how it works.

Julian Stevens, Harvest IFM, Bristol

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