It’s been an extraordinary few weeks for St James’s Place with the firm announcing some elements of its new pricing structure, but with a definite sense that the big wealth manager slightly lost control of the story.
It is never guaranteed, of course, that any big firm will ever ‘keep control’ of the story when so many journalists, analysts and indeed many financial advisers are pouring over the story. That applies no matter how many misconceptions the firm seeks to clear up in its own communications.
First a little break with convention. These are the links to the stock market announcement and to what SJP Is telling its clients, under the title ‘Changes to our charges. Clarifying some misconceptions.’
First, it says the changes cannot come into effect before 2025 due to a substantial programme of system and process changes. This has caused quite a lot of eyebrow raising among advisers. But question and answer 3 around the matter of new and existing clients is also the subject of a great deal of focus from both trade press and consumer websites. We include it in full below.
3. Do these changes only apply to new clients?
“All new and existing clients will benefit from lower ongoing charges at the time of implementation.
“With consumer expectations and the regulatory landscape continuing to change, we believe that an easily comparable structure will be valuable for consumers in the future.
“This means we will be removing the EWC for new investments from 2025 to enable us to separate the components of our charges, which will help to make our charging structure simple and more comparable with others in the marketplace. Clients with existing bond and pension investments that are still within the six-year gestation period will transition to the new charging structure for those investments once the EWC period has ended, but any new money invested by those clients will be invested in line with the new structure as soon as the changes are implemented.”
The key phrase is ‘once the EWC period has ended’.
The report in FTAdviser has the Lang Cat’s Mark Polson stating simply that in his view, the change won’t come in for existing clients.
“At first glance it looks like good news for clients - until you read that it won’t come into effect until H2 2025, and won’t come in for existing clients.
“This is bizarre and seems to me to be against both the letter and spirit of the new consumer duty rules - if something isn’t right it should be fixed for both new and existing clients, and as quickly as possible.”
As a listed stock, SJP comes under analysts’ scrutiny. RBC Europe has put out a note suggesting that the new charging structure will see the firm struggle to incentive new business as Citywire reports.
Citywire also collates a huge range of IFA opinion here. There are concerns about lots of unintended consequences for the model including the relationship between SJP advisers and the central business.
In the Financial Times, Moira O’Neill considers what customers of SJP should do. There is a lot of opinion in the article, again very much not in SJP’s favour.
The Sunday Times has declared victory because of the news given it has been offering some deeply sceptical coverage of SJP for many years' now. (A little prematurely, till we see all the details perhaps?)
The Times/Sunday Times money desk editor Johanna Noble has also suggested that there are ‘more bad apples’ in the market. It does seem likely that changes at SJP will bring even more scrutiny of adviser models, although there are few that have been quite so bold in terms of big exit charges.
It is not all SJP news of course. Citywire has several cracking stories but here are two. Vanguard Life Strategy could be in breach of the UCITs rules on concentration of stocks.
Artemis European Sustainable Growth fund will have its name and investment policy changed after a second vote among investors to drop its sole focus on sustainable investments.