Love it or loathe it, St James’s Place knows how to recruit advisers. There’s a reason it takes pride of place at the top of the advice tree – by size, if nothing else.
SJP passed the 3,500-adviser mark last month and shows no sign of slowing down. The growth has been steady and relentless. Over the past 10 years, SJP’s adviser numbers have grown at a compound rate of 9 per cent a year, more than doubling since 2007.
Cemented with the most recent stats, this continues to buck a trend that has been tough on networks: of the 30 largest firms by number of CF30-qualified investment advisers, for example, only six posted double-digit growth in the first nine months of 2016. Nor has SJP needed to complicate things through any full advice firm mergers.
With so many new faces at the firm, many fear a slapdash attitude has crept in. It is not uncommon for an adviser to finish an anecdote to me about a dodgy firm down the road with something along the lines of “and then that guy joined SJP…”.
A few years ago, I myself reported on two advisers who had racked up around half a million in Financial Services Compensation Scheme claims at a defunct firm before moving on to join SJP. The kind of professional indemnity insurance offered by such a large entity may not immediately spring to mind as a compelling reason to join the largest firm in the UK, but it is not beyond the wits of rogues to suss this out.
As long as the vetting process lets through only the very occasional bad apple – for none will be perfect – there is no malice in simply running an effective acquisition process. There are economies of scale to hiring advisers. SJP can afford to pay for the most professional contact base mining, along with the top brokers and lawyers, to target exactly the planners it wants in the most appealing and watertight way.
I’ve not heard of another firm bold enough to spend money not just on an academy but on an additional programme specifically targeting the children of existing advisers, to try to bring them into the business.
But there are still too many unanswered questions about the hiring techniques themselves. We approached SJP last Thursday with a series of questions on the incentives it gives joining advisers and the internal processes behind its impressive recruitment numbers.
SJP said it was unable to provide answers to our questions. After further discussion around the firm offering a general statement on the benefits of joining, it said it could not provide a comment for the piece in time for our Tuesday press-day deadline.
The imperative, then, is on small advisers to perfect their own sales pitch: more freedom; completely independent investment choice; great client relationships without sales targets or exit fees.
If nothing else, this is because the majority of SJP partner firms are, or were, small advisers. Smaller than average, at least: ex-adviser trade body Apfa puts the median number of advisers in a firm at around 4.5, compared to an implied 1.5 for SJP. The lure of SJP for them, in a world of compliance and capital adequacy fears, is as strong as ever.