Despite being one of the FT’s Big Reads, Emma Dunkley and Sally Hickey’s article , doesn’t really try to answer the question it sets, leaving the question for readers to answer for themselves.

My reaction to reading the article was relief that the FT had not uncovered anything new and that the future of SJP is very much in its own hands. It cannot help SJP to have private owners, what leads that way is debt and pressure to deliver in the short term what should be delivered over time – namely patient advice.

We learn a little new. I had not realised that from next year, SJP will be required to disclose the unbundled costs of advice and wealth management. Since the cost of wealth management has previously been disclosed as the total fee, the splitting out of the cost of advice will come as a surprise to many clients. It is thirty five years since I worked for Allied Dunbar and I still remember feeling awkward telling my clients that my advice was for free. Advice has been rewarded by success fees for so long as Mark Weinberg has been at the helm and that goes back to the early 1970s with Abbey Life, it will be a major shock to the internal and external culture of SJP to make this disclosure – but it is vital they do.

We also learn that partners and associates are now recording meetings. I am amazed that this is not a matter of course already. Recording meetings is one of the easiest ways of providing both client and adviser of assurance going forwards. Some traditional advisers will see the imposition of a recording as a breach of trust, but it is the only way to avoid the unseemly disputes for which SJP will reserve £430bn.

But generally, what we read is the familiar rehearsal of the noose that has been tightening on SJP over the past five years.

SJP can go one of two ways, they can seek to resist change and bluff it out, or they can embrace change and find ways to disclose their value for money and seek to build an advisory business in its own right.

Remaining a bundled business, where the cost of advice forms a part of an holistic AMC isn’t working. As reported on this blog, it is leading to redemptions and to substantial falls in new business, I fear that continuing down that line will see SJP fall out of the FTSE 100 and into the arms of a PE consolidator.

The alternative risks losing the cherished bond between adviser and client – unless that is, SJP can sell its cost of advice on its being value for money.So long as it surrounds regulated products , that advice won’t attract VAT so should be fiscally valuable, but pushing into non-product related advice – such as life coaching, looks like attracting VAT on everything.

However, we are entering a new political environment. The Labour Party is promising to extend VAT for private schooling. The impact that will have on paid places we have yet to see. the parallels are obvious.

Clients purchasing advice through SJP are bypassing the standard sources of financial help – Moneyhelper and  the resources made available from workplace pensions choosing instead for the financial equivalent of going private. The exclusivity is part of the attraction, but if the reputation of the brand is tarnished, the private system can soon lose its allure.

Allied Dunbar held on to its direct salesforce too long and SJP profited from its failure to adapt by recreating the old Hambro’s spirit in SJP. Now SJP is facing the same challenges facing Allied Dunbar in the 1980 and 1990s, can it pivot and recreate itself as Allied Dunbar failed to do?

Both the management and the partners of SJP have been slow to change till now and the result is the pink line on the chart at the top of this blog and the blue line below.

Two decade’s growth wiped since the pandemic