Under fire wealth manager announces changes to customer charges
Wealth management firm St James’s Place is to make changes to the way it charges clients after months of criticism.
The Gloucestershire firm has seen its share price slump following the sustained criticism and increasing pressure from regulators.
St James’s Place is one of the biggest wealth businesses in the UK but its share value has fallen by a third as a result of the ongoing issues.
The business has been coming under increasing pressure from regulators over its fee structure as a result of the introduction of new consumer duty regulations.
Any changes to the way the firm operates is expected to cost millions as it will mean changes to its software and operating systems.
St James Place said earlier this year that the total funds under administration rose to £157.6bn.
However its profits fell to £161.7m from £208.2m in the previous 12 months.
This morning the company announced changes to its charging structures that are planned to come into effect during the second half of 2025.
The move comes in the wake of internal evaluation in charging structures and fees.
The changes will create a revised charging structure for the vast majority of new investment bonds and pensions.
One area of particular concern for both customers and regulators is the fees charged for people looking to exit schemes early.
Chief executive Andrew Croft said: “The changes announced today are about positioning our business for continued success by putting in place a future charging structure that reflects the evolution of consumer engagement with retail financial services, and is aligned to the long-term value that we deliver to clients through the Partnership.
“We have always been confident that SJP offers its clients real value that helps individuals and families achieve financial wellbeing. However, it is increasingly evident that consumers are seeking simple comparability, and this has been reflected in regulatory trends too, as highlighted with the Assessment of Value and Consumer Duty regimes. The review of our charging model reflects these developments.
“I am confident that SJP’s ability to both deliver and demonstrate value in the future, with this sustainable model of charging for our end-to-end services, is good for clients and represents an exciting opportunity for SJP.”
The firm said it has attracted £3.7bn of new client investments to the business, while annualised retention rates remain strong at 95.3 per cent for the year-to-date.
The company said demand for trusted, face-to-face financial advice remains strong but client capacity and confidence to commit to long-term investment continues to be impacted by an environment characterised by higher interest rates, stubbornly high inflation and short-term alternatives in the form of cash.
Looking forward the firm said it is beginning to see signs that inflation is moderating and that the current cycle of interest rate increases may be reaching a peak, bringing some optimism that this will ease the pressure on clients.