The ending to the Eagle’s Hotel California is famous
“Relax”, said the night man
“We are programmed to receive
You can check out any time you like
But you can never leave”
St James Place boasts high retention rates for partners (advisers), customers (clients) and funds under management. They are “programmed to receive”, despite drops in asset prices, FCA now looks after £106bn of client’s money, almost all fully advised. Although customers can leave, they don’t, because they are happy being SJP customers.
St James’ Place Assessment of Value
This point is made early and often in its first Assessment of Value.
By every established business metric, SJP is doing its job and doing it well, so why is there so much concern about its business model from the press?
The answer can be found in the AVA which – despite its relentlessly upbeat tone, suggests that SJP are at an inflection point.
In the 1980s , I was an adviser for Allied Dunbar.
Allied Dunbar was a large British life assurance group. In its early years it was known as Hambro Life Assurance and was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index. However it was acquired by BAT Industries, merged with Eagle Star, and sold to Zurich Financial Services in 1998.
I left to be an IFA and returned in 1995, working alongside my former colleagues to 2005. In 35 years I have seen Allied Dunbar go from one of Britain’s most vibrant companies to a legacy book , its advisors , a pitiful rump.
SJP could go the same way. But unlike Allied Dunbar, SJP is introducing to its business a man of sufficient intelligence, integrity and charisma to turn it into the 100 year company SJP wants to be. The appointment of Robert Gardner as SJP’s Director of Investments in January 2019 could see SJP move away from the corporate excesses of Hotel California to become a club for the mass-affluent delivering wealth management with economies of scale.
The AVA is Rob Gardner’s starting point. We will need to judge him in five and ten years time on his progress. Having spoken to Robert about it, I can understand that change can only happen at a certain pace. If you want my assessment of the assessment, I would compare it to one of the first IGC statements produced in 2015.
With the benefit of hindsight, much could have been done better, but this is, at least, a first step towards properly opening Hotel California to public scrutiny. It gives its patrons an insight into what they are paying and what they are paying for and though it pulls a lot of punches, it goes some way to opening the gates of the Hotel.
In a sister blog to this , I will look at the SJP AVA in detail and explain how SJP can move forward rather than stay in Hotel California. SJP need not make the mistakes of Allied Dunbar.