Gordon Aitken speaks sensibly about SJP
It makes no sense to give SJP a beating up; SJP is unique among financial services companies in delivering what it set out to since the 1980s
Gordon Aitken’s report is available on this link
Inside the report shows the departures sized on management’s own retention experience, then stress-tested at double that estimate, at which point the exposure is still only 1% of group funds;
why the adviser economics changed in August 2025 and which practices it hit hardest;
what the H1 2026 results showed on client retention, flows and capital returns; the £51bn gestation pool that starts paying its way to 2032;
Healey’s first Budget as a demand event for advice;
the AI question answered honestly; and the valuation at 0.53x embedded value.
Four appendices carry the methodology, the data registries and the workings, and the note’s 12 exhibits mean every number can be checked or challenged.
Why should SJP shareholders expect to retain a large multiple of the future charges generated from clients when those clients may increasingly be able to obtain financial advice, portfolio management and platform services elsewhere at substantially lower cost?
Gordon’s answer on LinkedIn and Substack was as follows:
“A fair question, Derek, though the argument that low-cost alternatives will compete SJP’s charges away has been made throughout the 25+ years I have covered this sector.
“The structure survived RDR intact, funds under management have compounded to £240.8bn, and the charges were only fundamentally restructured last August, under Consumer Duty rather than competitive pressure.
“Retention of client funds ran at 95.4% through the period when the company was in the headlines daily, so clients paying for advice appear to be buying something other than the lowest price.
“On the valuation itself, embedded value is a best estimate rather than a promise, built on disclosed assumptions for persistency and charges, so it already carries a view on what those future charges are worth.
“At around 0.53x embedded value the market is paying roughly half the value of profits on business already written, and nothing at all for anything written from here.”
Eugen Neagu has also responded to this blog over on LinkedIn.
Henry, I do wish there was some way comments on WordPress/Jetpack, LinkedIn, Substack et al could be brought together in one place to give a broader sense of any feedback …
There’s not much you write that I disagree with, but seeing the headline “SJP don’t deserve ….” makes my blood boil, and not just because of the heat. I accept that SJP could in some quarters be considered as a successful business, but only by those by those that think Charles Ponzi was a good businessman.