St James’s Place chief executive David Bellamy has argued the company’s RDR charging structure is competitive and “by far not the most expensive” on a total cost comparison basis.
SJP set out its post-RDR charging structure last month which will see clients charged an initial fee of 4.5 per cent for bonds and 5 per cent for unit trusts, for advice and fund management, with an ongoing charge of between 2.1 per cent and 2.3 per cent. SJP partners will receive 3 per cent from the initial charge and 0.5 per cent ongoing.
Following a business update today, Bellamy hit back at critics who have suggested the charges are too high.
Speaking to Money Marketing, he says: “We are not the cheapest but by far not the most expensive. We provide an integrated service and I think we provide exceptional value given what we do. We oversee the investment proposition, we source our fund managers, and give support to the partnership. Our scale helps us enormously but I certainly do not see we are in a bad position when it comes to price competition.”
Bellamy says SJP has been transparent in setting out its price structure, adding: “the one thing we are very explicit on is total costs”.
He says: “Sadly as a result of the RDR the industry fragments when it comes to the charging structures of platforms, advisers, fund manager charges, admin fees and in some cases performance fees. Looking across the piece it is very difficult for a client to try and compare costs. From all the comparative work we have done, we are not at all expensive.”
SJP has reported a jump in new business levels of 46 per cent in the last three months of 2012 to £223.8m compared to £152.8m for the same period in 2011.
Bellamy rejects the idea that this surge in new business stems from advisers looking to secure as much business as possible in the run-up to the RDR in order to benefit from past trail commission rules.
He says: “Close to 90 per cent of our business comes from existing clients and referrals. We are not about selling products, we build long-term relationships and we look after people’s money. They top up their pensions, Isas and investment portfolios, and that continues to be the case. We have had strong retention year on year, and there are no signs there has been anything different happening in terms of activity.” Bellamy says new business has been driven by stronger investor sentiment in the second half of last year.