St. James's Place Share Discussion Threads

[dexdringle] 12/3/2024 12:03:44

The solution here is simple.

- Start charging the same 3% up front as everyone else (and stop the free entry / six year early redemption thing). Split 2% adviser / 1% SJP.

- reduce the Product Fee to 0.8% making the annual fees 0.8% product, 0.5% fund fees, 0.5% ongoing support fee = 1.8% total.

- get a grip on fund performance and get funds into the top quartile.

SJP is the same as any other IFA or Advice operation. They are all much of a muchness. The only differentiator really is the quality, of and relationship with, the adviser. Products are pretty much the same wherever you go.

The above would translate to around £1.4bn gross income and £600 million net profit.

[dexdringle] 11/3/2024 19:11:18

hXXps://citywire.com/funds-insider/news/harris-associates-backs-st-james-s-place-but-insists-partners-must-pay/a2438025

[dexdringle] 11/3/2024 19:03:18

It would be interesting to know who is selling at this price.

[quepassa] 11/3/2024 19:00:59

The price graph indicates that the share price has great downward momentum and a lot further to fall.

all imo. dyor.
qp

[dexdringle] 11/3/2024 18:36:41

I guess that's where due diligence comes into play ? Examples of where you didn't get what you thought you'd bought, and the implications of that, would be useful. I know two SJP partners who 'bought' books of business and, in both cases, it went very well.

No. It's like trying to take over the bully's lunch money franchise and finding out you're not up to it.

My calling BS was in respect of your hint that there is some other, as yet unannounced, elephant in the room....

[porsche1945] 11/3/2024 14:35:33

This bag of shyte heading back under 4 quid, who knows, maybe this hopeless brexit government will offer incentives to force pension funds to invest their clients hard earned in SJP.

[dexdringle] 11/3/2024 13:48:23

So what should a retiring adviser (SJP or otherwise) do with his clients? Most service businesses sell for a multiple of annual fees. Goodwill if you like.

The whole point is that if, and when, your adviser retires (average adviser age is mid 50's) there is a mechanism to pass you to a new adviser to continue the relationship. It's no skin off your nose whether your adviser sold you or gave you away. He got £X and someone else paid £X. It is irrelevant whether your new adviser used his own savings or borrowed the money.

I know a guy who is a window cleaner. If he has an 'outlier' client who is geographically awkward he will sell the client to a more local window cleaner for 4 x the price of a clean. So if the job is £30 every six weeks he'll sell the client for £120, introduce the new guy to the client, and leave him to it. It's exactly the same.

[tim 3] 11/3/2024 12:45:51

I know there is a temptation to only see the negative side at times like this but selling clients to other advisors and all this loans business just sounds really shoddy !

[dexdringle] 11/3/2024 12:00:37

It's already down 75% from its peak couple of years ago. That's pretty drastic right there.

It is already priced as toast.

[pander45] 11/3/2024 11:40:06

This is toast, super crispy.

[andrewhbruce] 11/3/2024 09:13:53

The whole thing stinks.

[jgoldby] 11/3/2024 06:18:04

The purchase of clients is based on the understanding that they have been looked after properly. SJP have now admitted that the evidence of this does not exist and it was their responsibility to do this work.

It’s not rocket science, this would crate a further £1.5bn potential claim against SJP from advisers.

Still this isn’t the big one.

[dexdringle] 10/3/2024 18:22:34

So, as an SJP Partner, you borrowed from SJP to buy a bunch of clients, at a price of the usual 6 x ongoing annual advice fees, and you then claimed that SJPs valuation of the clients you bought was negligent ? Meaning you think you overpaid for the clients you bought ?

In what way was the valuation 'negligent' ?

Edit: there is no such thing as 'ongoing suitability of advice'. The advice at the point of sale of a product is either suitable or it isn't. It's documented in a Suitability Report.

Ongoing advice is really 'ongoing support and availability' with the possibility of further fresh advice on new (or additional) product sales which, themselves, would be subject to fresh advice documentation.

You can't then start trying to determine how much activity was sufficient. Those getting a refund will mostly be those for whom SJP cannot demonstrate ANY contact or service whatsoever. Abandoned clients effectively.

[tim 3] 10/3/2024 14:24:25

Their HO admin department is shockingly bad.

When I contacted them about a letter THEY sent me about a mistake they had made they could not find it and despite promising several times to call back never did.

Ended up getting sorted by their local advisor it took over 6 months to get the money owed though.

[jakleeds] 10/3/2024 14:08:29

SJP complaints grow over mis-selling, high fees and poor service
Thousands of the wealth firm’s clients are demanding their money back after grievances more than doubled in a year, says Ali Hussain
March 10 2024, The Sunday Times
Complaints against St James’s Place, Britain’s largest wealth manager, have more than doubled in a year as its customers rail against high fees, confusing charges and poor service.
The Financial Ombudsman Service told The Sunday Times that since April 1 2023, 492 complaints have been made about St James’s Place (SJP), up from 236 in the 12 months from April 2022.
SJP, which has a network of about 4,800 financial advisers who act as sales agents for the firm’s products, has bowed to regulatory pressure to reform its fees and repay £426 million to customers who paid for advice they didn’t receive. It is unclear when payments will be made or how many of its 950,000 customers will receive them.
• St James’s Place braced for £426m payout — and this is just the beginning
Thousands of its clients have demanded money back. Some say they were mis-sold products, while others paid for regular reviews of their investments that they didn’t get. Many customers said the reviews dried up after the first few and that their SJP advisers could be difficult to get hold of. SJP has already switched off the automatic annual fee of 0.5 per cent for about 19,000 of its customers where it found no evidence of regular reviews being provided.
The ombudsman has found in favour of SJP customers in 39 per cent of cases in this tax year, up from 32 per cent the year before. When considering all investment-related complaints the ombudsman found in favour of customers 32 per cent of the time overall, up from 30 per cent the year before.
The main complaints against SJP related to the mis-selling of products (for example, because a product was unsuitable for a customer), poor service, and for fees and commission.
The law firm AMK Legal, based in Bolton, is making compensation claims on behalf of 15,000 SJP clients. The firm will take 40 per cent of any payout, plus VAT. AMK claims that it has a 70 per cent success rate and that it was instrumental in forcing SJP to announce its £426 million compensation fund this month. SJP denies this.
The £426 million figure is based on five years of potential claims dating back to 2018. However, AMK has won claims against SJP going back to 2013, when rules were introduced requiring wealth managers to agree fees with clients when they join a firm rather than paying its advisers through commissions. Michael Jordan from AMK said: “We have already secured over £13 million in refunds for 4,000 [SJP] clients. In its announcement SJP said it will be looking at refunds from 2018 to 2023, but AMK has secured refunds going back to 2013.”
• I was bullied and belittled by St James’s Place, but I was right all along
The ombudsman has urged customers to contact it for redress, saying there is no need to use a professional claims manager. You must first make a complaint to SJP (sjp.co.uk/help-centre/make-complaint) and give it up to eight weeks to respond before you can complain to the ombudsman.

[jakleeds] 10/3/2024 13:56:05

Underperforming loans to St James’s Place advisers more than double

Interest rates exacerbate repayment difficulties among partners and could put pressure on UK wealth manager’s model

SJP has a network of 4,800 financial advisers, who work at partner firms © Gareth Iwan
Sally Hickey in London MARCH 8 2024


The amount of underperforming loans extended by St James’s Place to its advisers more than doubled last year, as rising interest rates affected the ability of partners at the FTSE 100 wealth manager to repay money owed.

The amount of loans to partners that were either more than 30 days overdue, or had expired and were being renegotiated, more than doubled to £44.6mn at the end of 2023 compared with £17.7mn at the start of the year, according to its annual accounts. SJP classes these loans on its books as “underperforming”.


The company said the rise was as a result of both higher interest rates and a “challenging operating environment” affecting partners’ ability to repay the loans in full.

Widespread difficulties among SJP advisers in paying back their loans could put pressure on the company’s business model, which relies on these “business sale and purchase scheme” loans to retain clients within the group when advisers want to leave or slim down their practice book. 

SJP has a network of 4,800 financial advisers, who work at partner firms and take home a cut of the fees that clients are charged for receiving financial advice. When advisers retire, they typically sell their client books on to other advisers in the SJP network, who use loans facilitated by SJP in order to do this. The wealth manager guarantees some of these loans, which are drawn from a consortium of external banks.

SJP sets the interest rate of the loans, which are currently 3.5 percentage points above the base rate of interest. For much of the past 15 years this has sat at or below 0.5 per cent, meaning advisers were paying 4 per cent on their loans. The steep rise in interest rates over the past two years has pushed this up to 8.75 per cent.

SJP defines underperforming loans in this context as those that are more than 30 days overdue, or where the loan facility has expired and is in the process of being renegotiated. Meanwhile, a non-performing loan is one where the loan is to a partner who has left the SJP partnership, or to a partner that management thinks is at significant risk of leaving and when an orderly settlement of debt is considered to be in question.

The total amount of both underperforming and non-performing loans on SJP’s books rose from £22.3mn to £53.1mn over the course of last year.

The firm said: “[In our BSP scheme] we continue to have low write-off rates, which evidences the prudent nature of our approach to lending. Our confidence in financing this scheme remains very strong and incorporates a balance of internal and external funding sources.

“The levels of delinquency reported, whilst higher than prior periods, reflect the difficult operating environment and higher interest rates. They are not out of line with SME loan performance and not indicative of significantly higher credit losses.”

Last year, the Financial Times revealed that SJP is planning to raise up to £1bn to buy the businesses of retiring partners, as it tackles the issues wrought by higher interest rates and its increasing scale. 

[dexdringle] 08/3/2024 14:45:49

"""Private equity firm Pollen Street Capital has agreed to buy Mattioli Woods as part of a £432mn deal which would take the listed company private.

Mattioli Woods has 138 advisers, a client base of more than 20,000 wealth clients with more than £15bn of assets under management"""

They have paid 2.8% of assets under management.

So what price a business with 4,800 advisers, 950,000 clients and £168bn under management ?

[dexdringle] 08/3/2024 13:50:46

They could change it to St James's Palace which is what most folks think it is anyway 🤣

[andrewhbruce] 08/3/2024 12:18:45

It’s a dead duck and deservedly so. Next stop change the name. Any suggestions?!

[tim 3] 08/3/2024 12:10:39

QP.

Agree, the drop in net inflows has to be a huge concern.

I think investors will need to see this improve before we see any real confidence return.

[jakleeds] 08/3/2024 10:38:22

Interesting that the new CEO hasn’t bought any shares despite the massive drop……

I wonder how long he’ll stick it out here…..