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SJP hit with £4.8m FSCS levy

St James’s Place has revealed it was hit with a £4.8m Financial Services Compensation Scheme levy mainly to pay for claims relating to Lifemark.

In its annual results, published today, the firm posted an £84.2m profit before shareholder tax, up 69 per cent from £49.9m in 2009, on an IFRS basis.

On an EEV basis total profit was £455m, up 25 per cent on the £363m in 2009.

The firm says the £4.8m levy contributed to total regulatory costs of £6.2m for the year. The distribution part of SJP was hit with a £1.3m FSCS levy and the fund management side suffered a £3.5m hit. The total industry levy for Lifemark was £326m across advisers and asset managers.

Adviser number increased 6 per cent, from 1,464 to 1,552. In an update on the RDR, the firm says 700 advisers already have the required diploma qualification and a further 700 are within one or two exams of reaching it. The firm says the FSA has confirmed its current charging and remuneration charges will be allowed post-RDR.

Chief executive David Bellamy says: “We have had further clarity from the FSA regarding the requirements of vertically integrated firms in respect of the adviser charging rules and now know that essentially our current product charges and remuneration structures will be RDR compliant.  The way we disclose charges and remuneration will naturally change, in line with the rest of the industry.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. But are they independent?

  2. If the objective of RDR was to provide the consumer with confidence in the probity of the advice process and avoid financial detriment, then the SJP model is the antithesis of this.

    It is not independent vs restricted it is right vs wrong. Look under the bonnet of SJP and you find educated sharks in nice suits that are easy to regulate.

    FSA approve SJPs commission model? not a surprise.

  3. How SJP make the FSA look like plonkers 23rd February 2011 at 10:46 am

    SJP run circles around the FSA and cleints of former IFAs with regard to so called independent advice via the sale of Distributor Influenced funds where SJP takes responsibility for all sales undertaken by their “partners”. After bringing in former IFA’s with the promise of attractive buyouts former clients future business and top ups thereto are handled by a SJP IFA outfit who never actually see the client. Instead the now tied agent conducts the advice but not the sale. Good luck to them and perhaps its a bit too clever for the FSA to figure out but in the meantime we real IFAs continue to jump through hoops to prove the independence of our advice – I wonder whose the daftest?

  4. Will SJP smoke and mirrors survive RDR? 23rd February 2011 at 11:02 am

    RDR is all about clear consumer outcome and products. How on earth will the convoluted smoke and mirrors model promoted by SJP survive RDR?

    They pretend to be independent, with pretend access to pretend whole of market funds. They recruit tied advisers who pretend to be independent and allow them to give independent advise their former clients but not sell them – passing this on to a true IFA that has never met the client!

    And all of this is just fine and dandy with the FSA! Sounds to me a little like Equitable Life FSA school of regulation – what a complete and utter sham!

  5. George Handel (326 today) 23rd February 2011 at 7:26 pm

    We all know they are not independent. They are a “vertically integrated firm”, i guess this is their new term for tied.

    I am surprised to see that their current charging structure is RDR friendly, which if i’m correct still uses establishment charges on the Bonds to cover an up front lump sum commission.

    Surely this is good news for all those who argue that clients won’t pay fees as we now know (If SJP are correct) that providers can levy charges to the investments to cover the cost of advice. The client gets 100% invested and the smoke and mirrors live on.

    David Bellamy say’s “The way we disclose charges and remuneration will naturally change”

    It would help if SJP advisers disclosed these at all.

    I wonder how many clients currently know, or understand, that an extra 1% or more of their investment is being deducted each year to pay for the free advice from SJP. And that’s on top of the higher than average AMC’s.

  6. “Shark ahoy”, mind your appendages.

  7. SJP Funds don't rank 26th February 2011 at 10:49 am

    How good are their funds?

    The following generic DNA sift search was conducted on Aqueous, the same research software used by the FSA. I listed every Unit Trust and OEIC. Every time SJP funds appeared I have highlighted them. There are some 70 pages of funds and to save you the trouble the first showing of SJP is:

    Page 24 one fund
    Page 26 two funds
    Page 28 one fund
    Page 30 one fund
    Page 34 two funds
    Page 39 one fund
    Page 44 one fund
    Page 48 one fund
    Page 52 two fund
    Page 54 one fund
    Page 56 one fund
    Page 63 one fund
    Page 64 one fund
    Page 68 four funds

    These are all highly charged Distributor Influenced funds and if you had a choice it wouldn’t it be SJP?
    This is a direct sales group and a legacy from the 80’s. They pitch to upmarket cleints and trust these clients will swallow the slick sales pitch. On closer inspection they just don’t stack up. My guess is they have friends in high places.

  8. SJP a descendant of direct sales 26th February 2011 at 11:56 am

    SJP is a direct descendant of Allied Dunbar with the same founders Mark Weinberg and Mike Wilson. It is a slick direct sales operation with its foundations in the 80’s. Its high charged products are required to fund its backoffice. It keeps its products as far as possible off the radar as far as reserach software mainly because they don’t stack up. Its sales staff tell wouldbe clients it does not appear because SJR won’t pay for inclusion. This is the same line that Dunbar took. At its height Dunbar only ever took 12% of new business from the independent sector. The reason for this was two fold, the products were poor and its salesforce was loathed by the professional class. I have no issue with SJP other than the fact that they don’t stand on their own merit and the pretend to be independent.

  9. Mr. Jogga SinghTeidy BA (Hons) RGN Cert.Ed CMAP 26th February 2011 at 2:43 pm

    The answerto all ths aggroabot regulation,compliance and conumer protection is this:

    1. Quaification or APL accreditation of advisers.

    2. Proper regulation that is fit and proper for he job.

    3. Advisors with integrity o customers they serve.
    4. At school eucation of new potential clients about financial products and risk and how they work.
    5. A regulatory body, without conflict of interests, namley its staff and salares are not dependent on fines.
    Something for our ministers to consider.

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