This is not a blog about SJP but a blog about the FT’s coverage of SJP’s travails as they seek to respond to the FCA’s consumer duty without their business model cracking.
The reporting is relentless and consistent and it has just had another installment
Here are the stories that the FT has run over the past 10 weeks.
The story remains broadly the same. The SJP management struggle to justify high fees and especially high exit fees in the face of the twin onslaught of the FCA’s “Consumer Duty” and the DWP’s emphasis on “Value for Money”.
Since the FT is read by a high proportion of the FT’s wealthy and financially literate clientele, this steady feed of implied criticism, must be very harmful to SJP.
We have seen the impact of tweaks to the SJP charging model and the impact it had on SJP equity value.
Shares in the FTSE 100 group have shed 30 per cent since July, when SJP announced modest changes to fees in response to the rules.
So what is the latest twist to the story?
The FT has had a meeting with a “former SJP insider”.
One former insider said regulators had been pushing back against the charging structure for almost a decade, arguing it was anti-competitive because it locked customers in, and that some customers did not understand the fees.
“The regulators always had questions about that structure, principally because they thought it disguised the true cost of advice to the customer . . . that issue has always been there. The consumer duty has given the FCA more of a reason to push on this,” the person said.
The campaign continues
For a number of years, infact since my friend Robert Gardner joined SJP to improve its investment governance, I’ve been wishing SJP well in its attempts to reform itself. I’ve had face to face and Zoom meetings a plenty, discussing with them how they might use their influence to create a new kind of business that deployed advice into areas where it was needed (such as help on workplace pensions for SMEs with SJP clients in management.
I am sorry to say, my efforts have come to nothing. Robert Gardner has moved on and while his good work remains, the big question about the value of advice and its cost to customers remain unaddressed.
I witnessed the collapse of Hambro Life and then Allied Dunbar from a leader to an also ran in the provision of valued advice and I fear I may do the same with SJP. The two organisations have the same heritage and the same geographical epicentre.
The FT campaign (for so it seems to me) is now sufficiently advanced that I can see no way for SJP to duck its questions. It needs to consider how it addresses the issue of value in the light of its consumer duty and it needs to come up with some radically different answers.
Because the FT are going to go on writing these articles and SJP’s customers are going to go on reading them.
At time of writing 12pm 13/10/23 , SJP’s shares are down 15.91% on the day.
by 3pm, the situation had deteriorated further
and the day closed with SJP shares nearly 22% down
The market value of advice has just been downgraded.