View more on these topics

SJP adviser hits back at Sunday Times charges criticism

Spotlight on charges 700x450.jpg

A St James’s Place partner has hit back at press coverage of the firm’s fees.

In a letter to clients seen by Money Marketing that accompanied SJP’s winter magazine, a Winchester-based adviser, who is remaining anonymous, says his firm had been “disappointed” about the appearance of articles in outlets including the Sunday Times that criticised the firm’s charges and transparency.

The Sunday Times article referred to a retired solicitor, Arnold Rosen, who claimed he could not work out what he had paid to SJP during six years as a client.

According to the Sunday Times, Rosen’s fund grew from £280,000 to £391,490 over the six-year period, during which time he paid a total of £36,119 in charges.

The SJP partner writes: “In the 25 years that St. James’s Place has been established, our distinctive approach to wealth management has been recognised by both our industry peers and our clients. So we were very disappointed with an article published in a January edition of The Sunday Times which focused on our pension charges.

“Contrary to what the article suggests, full disclosure of charges was given to the client, both when the investment was made and prior to subsequent withdrawals. The impact of charges is significantly overstated, while the investment returns received by the clients are understated.”

They add: “As you will know from your own experience of working with me, we have consistently supported total cost disclosure.

The SJP adviser then asks clients to contact them if they have any issues with charges after reading press coverage.

An SJP spokesman says: “Each year SJP writes to all clients with the details of their investments with SJP and seek their feedback. The latest client survey showed 99 per cent of clients who responded (over 10,000 so far) believe SJP offers reasonable, good or excellent value for money, with 82 per cent in the higher categories. Further, 97 per cent told us that they would refer SJP to someone else, with 58 per cent having already done so.”

He says all SJP partners were sent an internal note following the Sunday Times article, and the letter seen by Money Marketing appears to have been drafted based on this memo.

Recommended

Data-Corporate-Finance-Business-Pen-Graph-Growth-700x450.jpg
4

SJP removes complaints data from website

St James’s Place has removed previously available data on the number of complaints against the firm from its website. On a section on its website entitled “How to make a complaint”, the wealth manager previously listed its latest complaints data on a half-yearly basis. However, a link to this information was removed last week. FCA […]

Money-Currency-Coins-Pound-GBP-700.jpg
86

SJP performance perks to advisers under fire

The way St James’s Place pays its advisers has come under fire in the latest in a series of reports into the firm’s business dealings. A “Nectar points” style system is rewarding SJP advisers based on every additional pound of assets they generate into the firm, including with foreign trips, dinner invites and other perks, […]

George-Osborne-Tory-Conference-700x450.jpg
1

SJP to pay Osborne £40k for conference speech

St James’ Place will pay former Chancellor George Osborne more than £40,000 for a speech at its annual conference last month. The MPs register of interests shows that Osborne expects to receive £40,567 from the restricted advice giant for the three hours’ work on the conference speech. The annual conference was held at the 02 arena […]

Auto enrolment – so far so good?

Jamie Clark – Business Development Manager The recent report from the Pensions Policy Institute demonstrates the sheer scale of auto-enrolment so far and what we can expect in the future. We’ve pulled out the key information to save you reading the full report. Auto enrolment in numbers Sources: Pensions Policy Institute, The Future Book: Unravelling […]

Mothers missing out on millions

By Steve Webb, director of policy and external communications The ninth Royal London Policy Paper discusses how thousands of mothers are missing out on state pension rights when they don’t have to Earlier this month we published the ninth Royal London Policy Paper, entitled ‘Mothers Missing out on Millions’. It focuses on the thousands of mothers […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 38 comments at the moment, we would love to hear your opinion too.

  1. any financial advice is better than none, but appears SJP may have been a target as there have been several articles over the last 12 months, not just about charges, also about performance and more recently financial inducements.

    You can’t have high charges and poor performance, clients will not mind paying extra if they get value.

    And lets face it SJP has for sometime been operating unlike most others where regulation is concerned. Time for them to fall in line perhaps!

  2. Ah. Alternative facts.

  3. It’s taken me a bit of time cutting through the PR chaff and obfuscation in SJP’s accounts to actually find the key bit of information – the actual income to the operating business. In the December 2015 accounts, buried in the notes, is the total “fee and commission income”. It is £1.33bn on AUM of £59bn, giving us a total expense ratio of 2.25%pa. Of that lot, “partners” took around £500m or over £200,000 a head. Judge for yourself if that’s good value given the restricted offering.

    When cash interest rates are sub 0.5% and most sub 10 yr gilts and corproate bonds are below 2%, you do wonder if this expense ratio isn’t just a weeny bit high.

    If Mr Tom Tugendhat, expense crusader wants to find a soft underbelly to hit out at, I think we can find one here. I also think if they realistically want to point the lawyers at the Sunday Times for a bit of retaliation, they are fighting that battle on soft ground.

    • That reminds me of the Equitable Life affair – the ‘no commission’ salesmen all receiving over £100kpa as salaries and bonuses on business written. The man from the Pru was averaging about £20kpa at the same time I believe. The exercise was quite simple – divide the costs int he accounts by the number of marketing and sales’ staff. To add insult to injury, the whole wit profit industry was able to take all these costs and more from the pot before declaring a bonus and upon which the few residual charges were then applied to pretend the coverall costs were negligible. How did the ‘industry’ get away with that for so long! Similar jiggery pokery seems to be engaged here….

  4. What I do not understand, is that SJP partners can only be renumerated if a client buys a SJP Policy. They are not allowed to invoice for advice.
    We used to call it commission, but it is now apparently an “advisory fee” which is only paid upon purchase???
    Can someone explain this to me?

  5. Well this isn’t exactly adroit PR. It only serves to keep the debate alive and in this case silence would have been the better option. This does demonstrate that there are always exceptions and not all publicity is good publicity.

    This anonymous adviser has better pray that the paper he wrote to ignores him, for if they decide to take it up, the result won’t look good for SJP, I’ll bet.

  6. Sour grapes from more bitter people – as it says the VAST majority of customers are happy with both their advisers and the advice – get on with running your own businesses and stop bleating or even better join SJP !!

    • And the vast majority of Germans were happy under Adolf Hitler’s rule….until they learned the truth.

    • Not bitter at all I have had over 30 clients in the past 3 years move from SJP to us based on the fact SJP dont disclose their fees or exit penalties. Performance has been poor from a vast majority of your inhouse funds and yes the might of got a report with the details of their investments but no face to face advice after the initial sale. So Mr Anonymous maybe not all SJP clients are happy and us independents offer a better and more transparent advice process. Have a nice weekend.

    • Anonymous? You mean anonymous SJP employee? Not sour grapes – I no longer give authorised advice, nor have I anything to be bitter about. SJP where a lucrative source of business for me. In wouldn’t now dream of using SJP. I wonder about those ‘vast majority’. Have they all been hoodwinked? How come every ex SJP client that came over to me when I practiced hardly had a good word to say about you? Were these the exception?

  7. @Bryan Jones 24th February 2017 at 1:53 pm

    What about the actual underlying Fund Manager Charges to whom SJP contract out a big chunk of their offering??

  8. “our distinctive approach to wealth management has been recognised by both our industry peers and our clients”. It certainly has been recognised by SJP’s industry peers but, by the majority, not in any way that could reasonably be described as glowing terms.

  9. St James' Place Is Very Expensive Limited Advice 24th February 2017 at 4:34 pm

    I love a bit of comedy on a Friday afternoon….the point is they are considered devious, dishonest, lacking transparency, the people RDR passed by….why shouldnt the holier than thou brigade criticise their expensive limited advice offering, surely when you mention commission ( how long has that word been banished) and then try and defend it from the very top you are indeed fair game. Some balls to put your name to your comments wouldnt go amiss

  10. I think advisers just want a fair playing field. I don’t think RDR has been all bad, clients now get an on-going service. But I would love to return to commission, in many instances it would reduce the amount of time it takes for a client to take advice and I earned more then. I wouldn’t Join SJP, as I like to know I can always do the best thing for the client. SJP doesn’t have the full product offering. There is no bitterness, I think the offering they have is ok. No matter who you are, you cannot deny that being paid on solely being able to put assets under your control, will influence the decision. It’s basic human nature and daft to pretend otherwise. What problem would there be if SJP reverted to clean fees like everyone else? If the proposition is so good other than it being “free” you’d still earn as much? Why is that so difficult to understand…

  11. SJP- Allied Dunbar with a Top Hat! like or loath them, they are a very good marketing machine.

  12. Most SJP clients I have advised it seems they are paying anywhere between 3% to 5% initial charge then on average 1.75% per annum upto the worse 2.25% per annum. The majority unaware of new premiums attracting new six year exit penalties on pensions especially. Majority never seen an adviser following the sale all they receive is annual report.

  13. Devious, dishonest and lacking transparency !!

    Those are fairly strong accusations which I am sure 10’s of thousands of SJP clients wouldn’t agree with ?

    As I have said before on these pages there is plenty of business for everyone and please don’t think there aren’t IFA’s out there that are whiter than white because after 30 years in this industry I can assure you there are not !

    I am not siding with anybody here BTW just trying to give balance to what seems a one sided argument from these pages.

  14. St James Place ” hitting back at Sunday Times charges ? ” – that’s rich ! It is important to recognise, the good work SJP carry out, in spite of industry envy, IFA and other restricted advisers jealously and lousy lack of knowledge. Some spineless urchins make mockery of SJP without identifying themselves. One thing SJP can be proud of is staying ahead of the game by the monopoly of insurance traders often referred to as ” the big boys “, those wannabies and sponsors of everyting which moves in order to gain an ” advantage ” yet fail so miserably to take advantage E.G. the purchase by Sub-standard Life of so many restricted advisers businesses, – as their Direct line ( tied Agent Channel eg Andy and his owners ). But then Wealth Management is all about professional advisers and their masters – in the tied agency making money out of clients. If the clients benefit – what then ? is it a bad deal or just one of envy for the poor performers in IFA loopland, or the restricted advisers in the monopoly of the industry of insurance – or their pyramid selling regime – where consumers really lose out !

  15. I’ve looked closely at joining SJP many times over the last 10 years. Their investment proposition is first clsss. I have friends who are partners and clients who I’ve said leave funds there. We are restricted advisers. SJP are uber professional and have a robust compliance process in place. The press will always find some negative as we all know.

    • I don’t have an issue with anything you say here. but SJP do still operate on a commission structure which is outlawed for the rest of us. Why do they need to do that and why do the FCA turn a blind eye? I think that their charge structure is very obviously unfair to the client – six year exit penalties? – and should be stopped by the FCA. Whatever happened to TCF?

  16. Ive made it clear in the past Im not keen on SJP -but im even less keen on the Sunday Times !!
    In this case the criticism is unfair – the clients fund grew by almost 8% a year after charges which is good , the client is a solicitor but cant understand or work out his charges – in that case quite frankly im glad hes not giving me legal advive if he cant work out a simple percentage!!
    As far as financial inducements are concearned its not an issue as they sell their own products so it matters not how many hotel stays or cufflinks they recieve they still sell the same plan!!

  17. Did I read that correctly?

    “Adviser, who is remaining anonymous, complains about unfair comments re lack of transparency”

  18. Andy Watt – are you being serious? Their investment proposition is by any reasonable standard terrible. Very expensive multi manager with layers of fees and costs ensuring poor relative performance against benchmarks. Thats just Fact based with evidence from FE Analytics.

  19. At last some balance !!

    The constant sniping and ” it’s not fair ” mentality from some posters on here just goes to show unprofessionalism – oh and for the record I am a Chartered Financial planner with 30 years experience Harry Katz who knows you from your direct selling days at Hill Samuel – wonder why you went to fee only ?

    • If you are Chartered, then in all likelihood by personally criticizing Harry using a pseudonym, you have breached your SPS providers Ethics code. Go back and read it. Cowards hide behind anonymity and are even worse when they then claim the kudos of their “Chartered” status. Coward…..

      • Phil

        Was that an attack on me? If so the syntax was awful. Mr Anonymous 24th February 2017 needs to take (or resit) his O Level English Grammar.

        ” Harry Katz who knows you from your direct selling days at Hill Samuel – wonder why you went to fee only ?” Could be read as addressing someone else.

        For the record I started out at Hill Samuel in 1985 and stayed for about 18 months. This was my initial foray into financial services and was by no means my sole occupation at the time. I had to ‘learn the ropes’ and will freely admit that their training was very good. I always regarded this as a stepping stone and went straight into independent advice from there. I too was in the business for 30 years – 25 of which in my own firm. I am still a CFP and Chartered – still completing my CPD. It rather says a lot about the writer that he wonders why I went fee only. After years of rebating the usurious commission payments and the conviction that I wasn’t prepared to spend time advising and only get paid if there was a purchase and vehemently against the ethos of those that bought paid for those that didn’t – fees were the obvious and logical path. I do hope that sets the record straight.

        • For the record, whilst I may agree with a lot of what Harry says, i disagree with his position on somethings, but if I do so, I say it to his face or under my own name. If I criticize publicly and personally, then I need to stand by what I say or justifiably I would breach my OWN ethical code, let alone one which some Chartered organisation requires it’s members to sign up to and then fails to administer/enforce.
          Come out of the closet Mr Chartered criticizing Harry and at least confirm who issued your “Chartered Status and SPS” .

  20. “The Emperor’s New Clothes” is a short tale written by Danish author Hans Christian Andersen, about two weavers who promise an emperor a new suit of clothes that they say is invisible to those who are unfit for their positions, stupid, or incompetent. When the Emperor parades before his subjects in his new clothes, no one dares to say that they don’t see any suit of clothes on him for fear that they will be seen as “unfit for their positions, stupid, or incompetent”. Finally, a child cries out, “But he isn’t wearing anything at all!”

    This story could apply to the St James’s Place offering which they claim is better than is available elsewhere in the marketplace. If other people don’t see it, the reason is that they are either envious of the high earnings enjoyed by their partners or they are just plain stupid.

  21. Enough noise! Why can’t SJP revert to clean fees. That’s the only issue, ignore the costs, get compliant with RDR. No more 100% allocation and perceived free advice. Do that and nobody would have an issue. RDR was without question the best thing to happen to SJP, they wouldn’t have expanded as quickly since if they had to abide by clean fees and NOT having 100% allocation of pension and bond premiums.

  22. C F Woodford Equity Income fund https://woodfordfunds.com/funds/weif/fees/. C Class shares Entry Charge: Nil, AMC: 0.75%.

    SJP Equity Income fund https://www1.sjp.co.uk/~/media/Files/S/sjp-group/documents/kiids/2016/equity-income-kiid-oct16.pdf. Entry charge: 5%, AMC: 1.60%.

    Perhaps somebody from SJP would care to explain how their offering can be presented as being in any way competitive.

  23. Have twice had the dinner party moment where been asked by professional people “you’re not anything to do with that SJP are you?” – then the tale of woe where many pensions consolidated to start drawdown and every penny taken in year 1 has been subject to a 6% exit fee. No one else operates this model as taking 6% at the back end is “tasty” (unless you are the customer) plus that charging shows zero conviction in your product. Once someone signs then it is too late. Questions need asking of the consumer too for failing to shop around – if they went to see decent IFA they can virtually always secure a better deal and ZERO exit fees if they want their money back or wish to change providers.

  24. I am neutral about SJP and how they operate their model. It is their business to do with what they like unless the FCA tell them otherwise. I cannot believe that we are now 4 years into RDR and the FCA have not looked into every businesses way of charging. They must have by now. That being the case they must surely have given it the thumbs up? SJP partners or advisers or salesmen (whatever you want to call them) seem no different to the vast majority of IFA’s/RFA’s in terms of how we get paid. Ie on implementation of the advice given. It does all seem very much of a forore about nothing. We have all had times where funds go up and all had the reverse. Over the last 6 years I would have thought the majority of clients would have been very happy with 8%pa average after all charges.

    • Yes, but the big issue is that, for reasons at which we can only guess, the FCA doesn’t instruct SJP to abide by the same rules as those by which all its competitors have to abide. Is there any other provider in the market whose products still incorporate a 6 year tapered scale of exit charges? Apart from the (quite nasty) charges that HL imposes on withdrawals from its Unit Trust products (ISA’s, for heaven’s sake), I can’t think of any.

  25. You all realise its not commission if you are vertically integrated right?

    If you ran your own funds too, you would get paid for monies invested into them. You could then pay your staff extra based on the amount of investment they generate.

    Its only commission if a third party is paying/incentivising you to put clients money with them.

    • Yes, we all know that, but the cost of advice and product was supposed to have been separated at the RDR stage and the F-pack professes more than just a dislike for contingent advice charging and yet, SJP appear to be about the only firm they DON’T take to task over this
      There are the rules and then there are the spirit of the rules and I would contest and many others would that at least one of those is not being applied consistently by certain firms and the F-pack turn a blind eye.

      • The costs to the client are separated though. This issue is not about disclosure its about remuneration – everyone is claiming they still get paid commission. They have multiple revenue generation streams. Its up to them how they remunerate their own staff.

        • I disagree. The cost of the advice is the cost of advice. If the total cost of advice is not being covered by the agreed charge paid for by the client and is instead being paid in another way, then that is a commission on the sale of a product. None of us would be discussing this were it not for the fact the FSA didn’t make sure that the spirit of RDR was enforced as much as the rule however. SJP may well have found a loophole in the rules, but only they seem to think they are not breaching the spirit of the rules.

Leave a comment