Is St James’s Place the right financial advice firm for me?

By March 18, 2024Uncategorized

For a long time, St James’s Place has been the first name that pops into the head of those finding themselves in need of financial planning.

And with good reason: they are a behemoth, and many people use them. At the time of writing, their website states they look after £157.5bn of client funds. That kind of size can inspire confidence. The image of an enormous cruise ship, perhaps, comes to mind – hard to blow off course, and impervious to choppy waters.

The problem with large ships, of course, is that when they do start veering off course, it’s incredibly hard to change direction. And for a number of reasons, St James’s Place’s share price is suffering.

The latest of those reasons is a £426m provision that the firm have put aside for potential client refunds (always a red flag for clients). But it’s just the latest in a series of bruising developments. As the FT puts it:

“This is the company’s third negative earnings warning, for different reasons, since the summer … SJP has lost the trust of the market — and potentially its clients.”

It’s not hard to find the reasons for that loss of trust. That £157.5bn? A recent survey showed that almost £30bn of that is held in ‘dog funds’ – funds that are statistically shown to consistently underperform their benchmarks. And the recent introduction of Consumer Duty by the FCA highlighted the perceived unfairness of many of SJPs ongoing charges and fees – with the company forced to simplify some of their charges, and to scrap exit fees entirely.

Ok – but changing adviser feels like a big step. Is it more trouble than it’s worth?

This is entirely depending on your personal experience – there’s no right or wrong answer – but there are a couple of things you can watch out for.

Firstly, you should be wary if you find yourself being passed from adviser to adviser (which can sometimes happen with large companies like SJP). If this is happening to you, it’s likely you are not being properly serviced – and such behaviour would also be in contravention of the Financial Conduct Authority’s ‘Consumer Duty’ rules.

Another thing to be aware of is that St James’s Place – and other similar firms – provide ‘restricted’ advice. This means that they can only sell their own financial products; they don’t have access to the wider market.

More worryingly, a restricted adviser doesn’t even have to tell you that different and potentially better products are available. The overall effect is that a SJP client could be forgiven for thinking that the advice they were receiving was ‘independent’ rather than ‘restricted’. If this sounds like you, it could be worth checking if better advice is available elsewhere.

What’s the alternative?

In addition to looking after families’ finances for almost 30 years, Montgomery Charles are driven by our mantra of getting ‘more life out of life’. That means a completely independent, holistic service, with whole-life financial planning that’s calibrated against not just your financial goals, but your life dreams as well. We’re unusual in the financial world in that we may well advise you to spend your money and enjoy life, rather than just continue investing if you don’t need to!

We have a fair and transparent fee structure, that’s tapered for those with higher levels of wealth, and (we believe) one of the highest staff-to-client ratios in the industry.

If you think this might be the service for you, please get in touch for an initial, complimentary consultation, to assess how we help. There’s no obligation to proceed further, and if we can’t add value to your finances – we’ll say so. You can book a phone or video call consultation below, or call us to book on 01225 777 999.