St James’s Place has come under fire after suffering a back office system failure that means clients are being prevented from transferring away from the wealth manager.
The issues are preventing clients from accessing written information on their investments and are causing severe delays when withdrawing cash.
The wealth management firm is facing problems with its new back office system, called Blue Door, which it installed last October.
The system outage means written information on client Isa and unit trust holdings cannot be sent out to clients.
Advisers say the written information can only be sent to an SJP email address and not sent out more broadly.
One adviser has reported waits of up to 45 days before SJP will reply to queries for client information.
In particular the tech failure is stopping clients moving away from SJP. Those clients with letters of authority from a new adviser are being prevented from accessing their investment holdings information, meaning new financial plans cannot be drawn up.
Advisers are also reporting waits of up to five weeks for cash to be transferred from client SJP accounts.
Wingate Financial Planning director Alistair Cunningham says: “The worst kind of scenario is when someone wants to retire, there is no requirement beyond what is deemed to be reasonable.
“You can argue that it is not treating customers fairly but it doesn’t get you the money any quicker and once you set off on the complaints route it can slow the whole situation down.”
Clients trying to retire and withdraw their cash are likely to face the hardest struggle with information delays, Cunningham adds.
Myddleton Croft chairman David Cowell says the FCA should investigate the issue.
He says: “If it had been us and we were taking lord knows how long to reply to clients then I think the FCA would have something to say about it, saying that our software and our administration wasn’t up to standard.”
The problem could lead to compensation claims, says Cowell, if advisers wanted to transfer out of poorly-performing products and were blocked from doing so.
He says: “It is not treating customers fairly and is not allowing them to execute any changes in a timely fashion. If you’re stuck in something you shouldn’t be in for that length of time presumably they will have to compensate you.”
Finance & Technology Research Centre director Ian McKenna adds: “The length of the problem will be a worry for SJP and it brings up all sorts of issues around treating customers fairly, and systems and controls.
“This really highlights the importance of having robust processes in place and absolutely understanding what will happen if a supplier has a systems outage.”
SJP declined to comment on the specific faults with the system, but says it is working on the problems.
It says: “At the end of October we upgraded some of our back office systems with a view to improving our service delivery.
“Unfortunately, in the short term there have been some bedding-in issues causing delays in some aspects of our service. We sincerely apologise to any clients impacted by these issues and would like to assure them that they are temporary.”
The FCA declined to comment.