St James’s Place says it has no plans to join Aifa following the trade body’s decision to open up its membership to restricted advisers.
Aifa said last week it will broaden its membership to restricted advisers, although single-tied advisers will not be allowed to join.
Speaking to Money Marketing last week, SJP chief executive David Bellamy said: “We are not members of Aifa and we have no plans to become members of Aifa. But I think what it is doing is very sensible and consistent with the fact that there is currently a community of IFAs and a number of those will become restricted advisers under the new definitions.”
Bellamy believes the recent recommendations made by the Treasury select committee in its RDR report, including a year’s delay for implementation seem sensible. He said: “It has always struck us that if the cliff-edge date could somehow be avoided with some sort of phased introduction of the RDR, that would be sensible and pragmatic.”
Currently, 60 per cent of SJP’s 1,601 advisers are diploma-qualified and Bellamy says another 25 per cent are close to achieving diploma status.
SJP has reported a 52 per cent increase in profits for the first half of 2011, from £36.3m to £55.3m. However, the distribution arm of the business failed to make a profit, compared with a £5.9m profit in the first half of 2010, as SJP’s investment arm slashed the commission it pays its advisers.
Bellamy says the fall is due to the firm moving towards an equalisation in the remuneration paid to advisers, regardless of the wrapper chosen. He says by the end of the year, all wrapper commission will be 3 per cent, compared with the 3.6 per cent currently paid on offshore bonds.
The company, which is 60 per cent owned by Lloyds Banking Group, saw an 8 per cent increase in funds under management for the first half of this year from £22.4bn to £29.1bn.