SJP’s human shield

human shield

Will Robbins has followed up Elliot Smith’s brilliant expose of SJP’s fund profiteering by publishing the highlights of an interview with SJP’s front man – Chris Ralfe. I strongly recommend you read both pieces.

What they reveal is the “ours by right” attitude of SJP to profit. Profit is earned, not granted and there is no evidence in either article that SJP are earning the vast amount of profits being distributed to shareholders, management and partners – from fund activities.

I will not reinforce the arguments made by Elliot and Robbins, the conclusions made by readers are evident in the brilliant comments.

What is clear to me , is that SJP is using its partners as a human shield to legitimise one of Britain’s great financial rip-offs. Advice is being run at a loss – to sanitise and legitimise the vast profits made on fund management.

Human shield?

Whether the partners, associate partners and the retinue of support staff who prop up the advisory edifice, feel they are being used in this way is open to doubt. The ones I know, and they include some close friends, seem comfortable in their skins. Mind you, so did I when I worked for Allied Dunbar in the mid eighties.

They are providing a service, their customers are by and large happy and why should people like Will Robbins, Chris Elliott or Henry Tapper – take a pop at their success?

I agree that St James Place are quite open about their charges and that their customers have the chance to compare them with those of rivals and vote with their feet – and they don’t.

They don’t because of the brilliance of the advisers in adding value. Put simply – they appear to be worth it.

But that doesn’t mean that SJP can profiteer behind the scenes as it is doing. Nor does it make it right for them to justify their rapacious fund pricing on the service of their advisers. RDR is quite explicit in decoupling product and adviser and SJP’s current approach drives the clichéd coach and horses through the principles of RDR.

The wider impact of SJP’s fund pricing

Again, I would ask you to familiarise yourself with the SJP business model by reading the two pieces linked above.

SJP’s fund pricing is  far from delivering value for money, relative to the pricing policies of similar organisations (Hargreaves Lansdown being the obvious comparator). The impact of this pricing is to drive SJP funds into the lower quartiles of fund performance.

So the outcomes for SJP policyholders are generally poorer than those of policyholders of other providers. There is plenty of empirical evidence for this.

But worse than the damage that SJP’s fund management is doing to client outcomes, is the legitimacy it’s pricing policy gives to other advisory groups and indeed to some other insurers.

I am bored with advisers explaining that their prices are no worse than SJP’s. I am bored with advisers who use SJP’s pricing as a benchmark for their pricing and conclude they are offering value because SJP aren’t.

SJP are not just using their advisers as a human shield to justify their outrageous fund pricing, but they are offering it to the rest of the vertically integrated advisory community as a legitimisation of general bad practice.

Too big to flail?

I don’t want literal pillorying and castigation from the FCA, but I do want them to take on SJP with some metaphorical lashings.

Whether the FCA are confident enough to do this I wonder. SJP are a very big dragon and I am not sure whether the St George of the North Colonnades, is quite up to battle.

But on a wide variety of fronts , it is time that SJP is taken on. Like the Equitable Life in the 1980s and 1990s, SJP has drunk its own cool-aid and now believes it is the match for anyone.

It will not worry about this feeble pea-shooter of a blog, why should it?

But it will – undoubtedly – feel it can shrug off the FCA’s lance with a couple of snorts from its fiery nostrils.

The need for proper VFM benchmarking

Once again, I call for a little sunlight on the situation. It is one thing for Citywire to explain what is going on to its readership of industry professionals, it is another for ordinary people to work out just what the extra costs of the SJP pricing model mean for them.

The assumption that SJP customers are wealthy enough to look after themselves is a crazy one. The Equitable Life exploited that fallacy for 30 years, the emperor’s new clothes were never “outed.”

We now have means to compare the various deals on the market, to compare a Vanguard or a Pension Bee with an SJP or a Tideway. We can get the data and organise it into league tables which show the impact of the value and money of the many propositions open to those with wealth.

You don’t need to be wealthy to have “wealth” – ask the steelworkers of Port Talbot. But you do need to be careful to hang on to that wealth.

What people need is good comparative information that enables them to see where value is being earned and what their money is paying for. And they need the capacity to vote with their feet. Robbins and Elliot are busy exposing just how little of the value is being shared with SJP policyholders and just how much they are paying for what little value they get.

They have got behind the human shield to show us the bare underbelly of the dragon!

More of the same please!

human shield 2

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in advice gap, pensions and tagged , , , , , . Bookmark the permalink.

5 Responses to SJP’s human shield

  1. George Kirrin says:

    Chris Ralph is not to be confused with John Ralfe, Henry.

  2. stuarttrow says:

    Thank you Henry for putting the meat on the bone regarding an issue that is a stain on the entire advice industry. The whole point of taking advice is to be guided through the minefield of personal finance by a trusted friend. SJP and its business model of using high-pressure, tied “advisers” to channel punters into its egregiously overpriced products is the anthesis of that. The investment side is where advisers add the least value anyway given the prevalence of platforms offering products to achieve the same end at a fraction of the cost. So for SJP to be mining this particular seam quite so aggressively undermines the entire industry.

  3. Surely two Knights and a Lord cannot be wrong in their sales principals Henry? SJP is an extension and developmant of your old ‘playground’ and their ‘unique’ operating principals mimicing the professional connection tactics of yesteryear.

  4. henry tapper says:

    Indeed – I hang my head in shame

  5. Phil Castle says:

    Henry, you’ve met with Rory Percival since he left the FCA I think. I think quite a lot about the things he has and does say and on the whole he gets it right. I did however challenge him to explain to me (face to face actually with no-one else listening and for once I wasn’t recording) how SJPs methods i.e. cross subsidy of the advcie costs from their fund management operations meets the RDR principles. Whetehr they meet the rules or not ia an academic argument, but the vast majority of advsiers in the industry believe they have a tank rather than a coach and horses to drive through the principles of RDR. He wouldn’t be drawn then, but next time you see him Henry, see if you can draw him to comment now.
    (Hope you’re reading Rory. It can be painful sitting on the fence when you disagree with your employer, so now you don’t have to, you can express an opinion one way or the other you know and tehre are several of us who woudl liek to know yours rather than what teh party line was.)

Leave a Reply