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SJP investigates independence claims made by adviser

Restricted national firm St James’s Place is looking into why one of its partners told a prospective client he provides independent advice.

In an email to a business owner seen by Money Marketing, an SJP adviser offers his advice services, and states he has a long history of being an independent financial planner.

He states he has helped similar organisations with “bespoke independent financial advice…for more than 18 years.”

The adviser says he is reaching out to the business owner because he may be able to help put together protection and pension plans for the business and its employees.

However, his FCA Register record, confirmed by SJP, shows he has been with SJP, and therefore restricted, since 2014.

Prior to that the partner worked as an IFA for a number of years, SJP notes.

When asked why one of its partners was claiming to offer independent advice an SJP spokesman said it is very clear on its status of its offering and is looking in to the case in question.

He says: “We are very clear that SJP partners offer a restricted advice proposition.

“This will be explained to clients during meetings with an adviser and within the literature they receive prior to investing.

“We are following up with the partner concerned.”

Money Marketing asked what compliance systems the company has in place to make sure advisers are not breaching the COBS 6.2A rule in the FCA handbook on describing advice services.

The spokesman says: “We have strict checks and balances in place to ensure compliance with our regulatory duties across all parts of the business.

“This includes communications to clients and potential clients, which are required to be reviewed by the business prior to being sent out.”

Last year consumer champion Which? ran an undercover investigation looking into how clear SJP advisers are about their restricted status with prospective clients.

Three of the 12 advisers in the investigation did not say they were restricted and some who did confirm their status played down the restricted/independent difference as a “technicality”.

SJP told Which? last year it does not believe “being restricted is in any way inferior to being independent”.

It said its advisers were trying to explain its “distinct approach to investment management” and that if advisers’ explanations dismissed the value of independent advice it was “regrettable”.

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Comments

There are 33 comments at the moment, we would love to hear your opinion too.

  1. Christopher Wicks 4th September 2018 at 1:10 pm

    I thought this was a daily mash article at first! SJP advisers constantly try to conflate being independent with what they do, which is represent SJP. IFAs represent their clients, not some insurance company or other financial conglomerate.

  2. I’m assuming they told all the BA pilots they invited to various retirement planning conferences before transferring benefits they were restricted????

  3. they always say that they are Independent!

  4. “We are very clear that SJP partners offer a restricted advice proposition.”

    Anecdotally, many SJP partners are anything but clear on this very fundamental point (though I myself have no direct experience of SJP partners having misrepresented their status).

  5. Roddi Vaughan-Thomas 4th September 2018 at 2:14 pm

    A headline from heaven..

  6. Trevor Harrington 4th September 2018 at 2:45 pm

    This is such a fundamental element of Financial Advice, Financial Planning, AND FINANCIAL REGULATION of the retail markets, indeed it has been fundamental to regulation ever since “A” day in 1988, I presume that the FCA is deeply involved in the matter and that SJP’s “Regulatory Permissions” are about to be suspended.

    That being the case, I also presume that SJP will shortly cease trading altogether.

    Are there an MPs involved in this, and if not, why not?

    Surely many MPs should be lobbying the Treasury Select Committee, and seeking assurances directly from the Financial Conduct Authority that a matter of this gravity is being immediately and urgently looked at prior to regulatory action being taken?

  7. Perhaps the investigation will come to the conclusion that the adviser in question needs more training – in obfuscation! I will always remember one of SJP’s recruitment people standing in front of a room of IFAs and saying that the argument between independent and restricted advice was dead one because the clients didn’t understand the difference. What was astonishing from how he expressed this was, firstly, the clear contempt he had for the public (and really the advisers in the room) and, secondly, the lack of acknowledgement of SJP’s own role in this.

  8. I was once told by a SJP partner that SJP’s proposition was ‘better than independent’. I kid you not!

  9. S urely J ust P ropaganda from IFA’s?

    I have just had a fee invoice from the FCA so presumably they will be all over this issue?

    Don’t hold your breath.
    This is how it works;

    F irst C ollect A ckers from genuine IFA’s,
    R eally D on’t R estrain
    offenders and
    T ry C onfusing F acts if restricted.

  10. SJP…. does not believe “being restricted is in any way inferior to being independent”.

    Well, what else can they say? One thing on which I think we can all agree is that virtually all the funds available via SJP are junk that no self-respecting IFA in his right mind would touch with a bargepole.

  11. I was very surprised at this. Typically they don’t mention their status at all and just let their customers presume they are independent unless challenged to the contrary (and I agree with the other comment on this thread that I too have heard SJP partners telling customers and solicitors there is no difference between them and an IFA when challenged).

  12. Bad apples turn up across all sectors, allow SJP to investigate this individual and report the facts on completion. SJP provides an important service to a large number of the population and must be trusted to get it right.

  13. @SR “……and must be trusted to get it right.”

    How long do you think we should give them, as they haven’t got it right yet and have had OVER 5 years since RDR?

    Important service, yes, but with clarity and transparency of their service offering? No.

    I have no axe to grind with SJP, I will leave that with the powers that be.

  14. This is news? In my experience this was de rigueur. The only difference in this case is that the miscreant got found out.

    • I suspect the adviser concerned might try to claim his statement is factually correct, but it is NOT clear, fair and not misleading.
      It could be that restricted advsiers are making similar verbal claims (I don’t know, I’ve not been in one of their meetings), but it is only a matter of time before consumers start recording client meetings o theeir mobile phones and catch out advisers saying things they shouldn’t or which are contradicted by what ends up in a suitabiity report. Hence why with our client’s agreement we have recorded client meetings and kept written reports as short as possible as clients act on what is said to them rather than what is put in writing, simply because we are forced to put so much written documentation on front of them they don’t know what to read first. They sued to be able to focus on documents with “KeyFacts” in the title, but these have become more like a whole terms and conditions booklet rather than just the key areas. (mission creep)

  15. Apart from anything else, SJP salespeople aren’t restricted, they’re TIED ~ and the difference between the two IS important.

    By choice, I am selectively restricted (I place new investment and pension accumulation business on just one platform). But I can review, take on the ongoing servicing of and arrange top-ups to existing investments and pension plans on any platform or with any life office. As a tied operation, SJP’s salespeople cannot (legitimately) review existing investments already held with any provider other than SJP, yet routinely they do so, in the vast majority of such cases concluding that starting a new SJP plan is the most suitable course of action.

    Furthermore, no ongoing service or advice can be provided in respect of any client’s pre-SJP investments or pension plans. I wonder if SJP’s salespeople make that unequivocally clear when first engaging with prospective new clients?

    • Hi Julian – actually that all changed in 2013 there is no “tied defintion” and SJP staff can do exactly the same as you I think you’ll find under the restrcited moniker.
      The pre 2013 Independance definition is very different to the post 2013 definition too. It’s all about access to/advising on Retail Investment Products and having an open mind reather than restrcited mind as to which to reccomend to a specific client.
      Independant research can also be done by client group rather than everytime you take on a new client i.e. research all WRAp providers say 6 monthly and select a suitable one for say 3 market segements of clients you commonly take on and then if a client falls in to that segment, you reccoemdn that wrap for them.

      • I knew somebody would point out that the term tied was abandoned with the RDR, but that doesn’t mean tied advice structures don’t still exist. They just go under a different name and I know for a fact that SJP salespeople cannot do what a “restricted plus” adviser can. They can look at non-SJP investment products but they cannot take on the servicing of them, they cannot set up an ongoing adviser charge (ask any SJP firm how much of its revenue derives from non-SJP investment or pension products and I think the answer will be nil) and they cannot top them up. SJP does not have agencies with any providers of mainstream investment and pension products (only with providers of stuff that SJP doesn’t do such as structured products, VCT’s and EIS’s, etc. Do SJP agents use any platform/wrap other than their own? I don’t think so.

        Should they be forced to conclude that topping up an existing non-SJP plan is better than taking out a new SJP one, this has to be passed to an IFA practice (based in Glasgow I was informed) with which SJP has a referral arrangement. The SJP firm then receives a cut of any resulting initial revenue which, of course, is considerably less than the commission (and, coming as it does out of the product charges, it IS commission) that they’d receive from a new SJP product. That creates a clear conflict of interest. I once asked an SJP agent just how many top-up cases his firm refers and, after a considered pause, his response was: Is that a loaded question? You’re darned right it is. And I never got a reply.

  16. Surely this would be classed as Gross misrepresentation and #SJP should be hit with a fine and warning about future conduct? This is not the first time looking at all the other comments!

  17. It’s not difficult for the FCA to gather the evidence of this widespread practice amongst SJP reps, all you have to do is telephone any practice purporting to be a prospective client and ask the question. I would suspect 98% of the time they are IFA’s.
    Well if their proposition is so good why do they have to

  18. It’s not difficult for the FCA to gather the evidence of this widespread practice amongst SJP reps, all you have to do is telephone any practice purporting to be a prospective client and ask the question. I would suspect 98% of the time they are will tell you they are IFA’s.
    Well if their proposition is so good why do they have to

  19. I don’t know why everyone is getting into a lather over this ?

    I’m sure it will all be sorted SJP CEO, will call the FCA CEO, apologies will go back and forth, promises made and then agree the next luncheon date or golf trip is on him…..

    I really don’t think its our place to voice opinions or have knee jerk reactions…..

    My school careers adviser, once asked what classes was i struggling with…. when I replied the “Bourgeoisie”…..talk about pregnant pause…. I still have no answer after 36 years !

  20. “The adviser says he is reaching out to the business owner”

    I think they should investigate why he is using language like “reaching out!!”

  21. Nick, to save investigation I will do it for you. My source is the Cambridge English Dictionary, it states :-

    Reach out to sb. – phrasal verb with reach UK / verb. To try to communicate with a person or a group of people, usually in order to help or involve them:

  22. This is anything but an isolated case. More like the norm.

  23. Has SJP hired Inspector Renault as its compliance supremo? https://www.youtube.com/watch?v=SjbPi00k_ME

  24. they’ve tried to recruit me over the years. The last time (10 years ago) i was duped into this “interview” by a 3rd party. When i realised what the agenda was i told him that i wasn’t ineterested in joining them in no uncertain terms.
    He then looked shocked and said “but why not?!”
    i told him because you’re tied and i’m Independent. He then said ” oh no we’re not tied”. I retorted “what do you mean you’re not tied?”.

    he said that we are Wealth Managers.

    at that point i showed him the door. Meeting was closed!!
    you see even the recruiters don’t tell the truth about their status!!

  25. Any chance of some comment from the FCA? Misrepresentation of status is, after all, a pretty fundamental and serious regulatory breach.

    And anyway, if what SJP has to offer is so wonderful, why would any of its rep’s need even to think about misrepresenting their status?

  26. SJP and their sales people telling porkies? Whatever next…

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