St. James’s Place released their half yearly results yesterday and the market responded by marking up their shares 5%. The results told us that SJP had added nearly £10bn to funds under management and that operating profit had shot up. All that held back net profits for the period were larger than expected contributions to the Financial Services Compensation Scheme and exceptional costs of training its advisers.
There is a snobbery within the financial services community over SJP that I find distasteful. Independent financial advisers who complain about the shortcomings of SJP’s restricted advice model should remember that their costs are being subsidized by SJP’s FSCS payments and their future advisers are being trained in the SJP academy.
Journalists and pension professionals who complain about SJP’s high charges should remember that SJP’s customer satisfaction ratings (including independent research from Boring Money) consistently point to the strength of relationships between SJP partners and their clients.
SJP manages the wealth of Britain’s mass affluent and along with Hargreaves Lansdown, AJ Bell and a handful of other fund platforms are the means by which many financially fortunate families manage their later life platforms. It is these firms, not workplace pensions , who have risen to the challenge of converting pots into pensions and they are succeeding because of the decline of the company pension.
There are lessons that the PLSA and other pension trade bodies should think about. SJP can teach us a lot about managing other people’s money.
When Robert Gardner announced that he was taking responsibility for SJP’s fund offering, I was initially a little sniffy. But Rob is surely right to claim on this linked in profile
I believe that investing the £100+ billion in clients assets can be a force for good. And that clients future wealth and prosperity is worth more in a world worth living in
The challenge to the hegemony of LGIM. State Street and BlackRock comes from SJP’s Director of Investments. Where advice is at hand, fund platforms can be used to engage invvestors in more ambitious strategies that can be a “force for good” We should not assume that SJP has no social purpose, indeed, reading its 2021 funds Value Assessment suggests the opposite.
SJP are managing the risks the pension community have failed to deal with. Their clients recognize this and so should we. It is not good enough for us to sneer, it is for us to find ways to engage and learn from what SJP are doing right. In doing so , we may find ways to solve some of the problems that we have with engaging with the millions of savers that are not natural customers of SJP.
And by integrating rather than ignoring SJP, the pension community may find a way to bridge the gap between institutional and retail investment best practice.
There is nothing wrong with affluence.
SJP have an ongoing breach of Cobs 6.1A.9R because the adviser charges disclosed are not representative of the cost of the services associated with the personal recommendation. Their sales side is subsidised by the FUM without disclosure to the customer. hence they have a business model that no one else in this industry can copy.
If it benefits clients……
The obsession with anti commission has resulted in 94% of the population failing to take advice and convert it into savings.
The SJP model works and should be universally applied and commissions for the industry disclosed fully..
Services need margins.
The snobbery is with the semantics of “guidance” which takes no responsibility for action or outcomes for the “guided” being content to be a smug voyeur and a parasite on the public purse
Hello Henry,
As an SJP client I welcome your commentary above. Agreed, that SJP’s significant success after a ‘pandemic’ is very comforting. Such a report is more convincing than whatever a journalist might say [one way or the other]. As Jules Thorn [Thorn Lighting] claimed: a successful Balance Sheet is far better than a Public Relations Department.
When I was accepted as an SJP client, they did, at some length, go into what their charging structure would be for the particular accounts they were offering. So if I had, had any doubts about the charging fairness, I would have then gone elsewhere. SJP tell me now that they would be cautious of accepting any more investment capital because of my ‘having too many eggs in the one basket’ – I accept that. I note what other people comment e.g. CityWire but I usually put that down to normal competition.
Where I am rather cautious of SJP as their client is as follows:
1. Given their caution in not seeking more investment capital from me, I have, for the last couple of years, felt somewhat excluded. In fact I see the Account Partner’s main purpose as being to keep me off SJP. True: I can be critical but, with my money I have to be. I think the way that they dealt with the Woodford situation [thought to have been drifting for some time] was not good and, as I said to them that the reason why I think they ‘jumped’ was because their own stockbroker advised SJP their own shares were dropping and their was a rumour that a ‘hedgie’ was organising a ‘short’. They were smug about that and the Account Partner is still very impressed by Woodford…!
2. Both last year and this, immediately following the publication of their ‘Valuation ‘ document, bales of forms and legal documents etc arrived by Mail informing that [in three words] they wished to reorganise certain funds etc. It hadn’t come from the Account Partner but from the SJP central division. I have, on all occasions then had to find out what it was all about. To my mind, ‘distraction’ that it possibly was, it should have come with a covering letter from the Account Partner explaining the SJP recommendation. Perhaps SJP hope that the punters will ignore it all and let them continue as planned.
To my mind, despite all the Financial optimism currently sweeping the media, we don’t know whether the pandemic problem has/hasn’t finished, when there is an awful lot of finance to find to settle it. We were informed a few years back that it was only then that, at long last, Government had paid off the 100 Year War! What I’m getting at is, that in the current climate SJP is not too big to swallow whole and then be stacked with debt. All the SJP Account Partners, not being staff, would be gone if/as necessary. It is they who need all their clients just as much as SJP.
Kind regards,
Tim Simpson
Tim, as Woodford showed, when you lose the confidence of your clients, you have no business being a fund manager. SJP’s resilience is primarily based on their service proposition, I’d like to see a more robust analysis of their VFM, especially the value of their advice. The GAA assessment of their (admittedly small) workplace offering, is typical of the flabby thinking on VFM we’ve got used to
If you comment about SJP in the Times in a negative way, (similar to my above comment) the editor often removes the comment. This is my experience, and the experience of others who found my “deleted” comments and emailed me to say the same happened to them. I assume SJP marketing department making complaints.
SJP remind me of The Equitable Life saga – running a business model that no one else is able to replicate.