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St James’s Place adviser makes referral claim

A senior St James’s Place adviser is marketing herself as a specialist who takes referrals from solicitors, despite regulation that specifies solicitors can only refer clients to IFAs for investment advice.

In July last year, the Solicitors Regulation Authority confirmed the rules for solicitor referrals following claims from the representative body for solicitor IFAs, Sifa, that solicitors were in some cases referring clients to SJP.

In August, SJP was forced to issue new guidance to its partner firms reiterating that solicitors can only refer clients to intermediaries for investment advice although referrals for non-investment advice can still be made.

SJP senior partner Janine Edwards claims on her web-site to specialise in working closely with professionals, such as solicitors and accountants.

It states: “Janine works closely with a number of law firms in many specialist areas to mutual benefit, with Janine and the law firms both referring clients to each other.”

The website claims this work includes offering investment advice to estate beneficiaries and advice on investments, income and pensions after a divorce.

An SJP spokeswoman says: “Our partners regularly work with other professionals in meeting our clients’ needs. On occasion these professionals ask us to work with them with their own clients where they deem it appropriate. It is the solicitor who decides whether or not to make a referral to St James’s Place.”

Sifa managing director Ian Muirhead says: “SJP often claims it is not giving regul-ated advice to clients referred to them but I find that very hard to believe.

“It is like admitting to smoking but not inhaling. Some of these sales staff are in denial.”

Syndaxi Chartered Financial Planners managing director Rob Reid says: “The wording on the website implies that the referral service includes regulated investment advice.”

A Solicitors Regulation Authority spokesman says: “Solicitors should refer clients only to independent intermediaries where they need investment advice.”

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. One of the many instances where “everybody knows” what goes on, just like the practice of certain tied advisers representing themselves to clients as independent.

    Nothing is done by the FSA. No change there then.

  2. They used to refer to Equitable Life and even bought their products because the life office ‘didn’t pay commission to intermediaries’. The same lawyers took equitable to court and pursued the government for compo.

  3. Chris is spot on. When will the FSA wake up and smell the coffee? Could a senior MM journalist, who has the ear of the FSA, please ask them what they are going to do about this? If not them then is it the Law Society that is answerable?

  4. Baron Bolligrew 11th June 2010 at 9:55 am

    Why does this surprise anyone? We all know it goes on but the FSA, in its usual incompetent manner, ignores the largest miscreants and goes after the little one-man bands who are struggling with a massive downturn in turnover but an ever increasing amount of regulatory workload and fees.
    Mind you, the Law Society is just as much to blame. They espouse regulation but don’t follow it up. Many legal professionals I’ve spoken to still do not understand nor believe me when I refer them to the comments by the Solicitors Regulation Authority, the attitude being ‘I won’t tell if you won’t’…well, maybe we should start getting our own back on the profession that encourages claims chasing and then sues the claims chasers….maybe we ought to start reporting solicitors who we know are giving referrals to SJP!

  5. It is all still a mystery to me as SIFA still believes that if a company is an AR of a major network, where no restrictions are placed on any companies used, then we are still not deemed ‘independent’ by SIFA and therefore can not go on their register.
    I would love a representative from SIFA to explain that logic.

  6. Much of the success of SJP in achieving these connections is through their very effective business networking which is very focussed. The key target is the “solicitor” as they have money and once they have built this relationship by “doing a good job” the client will refer. It is not rocket science and should be within the skills of every IFA who acts professionally. If you all want this type of business to start marketing yourselves in the same manner and work from within and then you can stop moaning about being without. Get better than SJP and doors will open for you.

  7. To: John Hutton.

    With respect, you seem to have missed the point that what SJP is doing is WRONG.

    They have an enormous marketing budget – we have more or less none – and some people feel that they deliberatley set out to be ambiguous about their status.

    Perhaps SJP, the enormous, partially owned by the tax payer TIED financial advisory company with immense marketing budgets might stop chasing business they shouldn’t be transacting and give small IFAs – without the muscle of a large partially publicly owned bank behind them – a chance?

  8. A bigger question would be why are people lobbying a coercive authority to force business away from a company that in my limited experience focuses on good client relationships and customer service – in other words why does it bother them so much, surely everyone should have the right to free choice?

  9. SJP is a big competitor to me. Their best marketing is by effort…joining Rotary, Round Table, Chamber of Commerce,IOD, Masons, golf club, squash club. The same places where the bigger law firms, accountancy practices frequent and where they will meet the people who become their clients and from where they will gain referrals. Yes they tread a fine line but unless you get down there too you will only let them.

  10. As someone who was a sucessful IFA for many years before joining SJP, I cannot understand why anyone is suprised that many solicitors refer clients to SJP for investment advice. They realise that nearly all IFA’s are not fit for purpose in this area. SJP offer an institutional investment proposition that is several rungs above the Inadequate Financial Adviser community in the evolutionary ladder.

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