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St James’s Place is to cap annual management charges on bond and pension investments for clients who have been invested for more than 10 years, in response to the consumer duty.
In its interim results for the first six months of 2023, SJP said it had implemented a number of changes to further good outcomes for clients in response to the incoming consumer duty rules.
This includes a decision to reward clients with long-term investments through an annual product management cap on bond and pension investments after they have been invested for 10 years.
The company said: “This is a financially material change which benefits longstanding clients. Beyond this there are numerous other changes which, whilst less material to the financial results, improve the group’s ability to consistently deliver good client outcomes.”
SJP added that it had “engaged proactively” with the consumer duty and said: “Whilst we believe that we consistently aim to achieve good outcomes for our clients, we have reconsidered all our client focused activities and challenged where there may be features that could inadvertently lead to, or insufficiently mitigate, risk of harm to clients”.
The FTSE 100 company said this included gathering further evidence from clients on their understanding of its key literature and making changes to monitor and assess the value delivered to clients.
It stated: “For example, this has led to changes which will give more consistent, centralised evidence of the activities of the partnership with clients and reduce the risk of clients not receiving an ongoing advice service of value to them.
“We have seen increased complaints from a small minority of clients via a claims management company in relation to historic ongoing servicing. This further emphasises the importance of maintaining consistently high standards of evidence of servicing in line with the expectations of consumer duty, as well as the importance of our continued investment in the Salesforce CRM platform.”
Financials
Elsewhere, the company reported a fall in half-yearly profit after tax, from £208mn in 2022 to £161.7mn, but it attracted £3.4bn of net inflows - though this was down on the same period last year.
Funds under management sat at £157.5bn compared to £148.4bn at the beginning of 2023.
It now has 4,766 qualified advisers across the partnership, an increase of 73 so far this year.
In addition, 169 advisers graduated from its academy with 346 now enrolled.
Andrew Croft, chief executive of SJP, described 2023 as a "challenging period" for UK investors.
He said: Beyond our operating and financial performance, it has been a period of intense activity regarding progress against our six business priorities, as well as in our preparation for the FCA’s new consumer duty regime.
“As a business focused on driving good client outcomes, we have welcomed the opportunity to further strengthen our commitment to clients and enhance the value we deliver to them.
He added: “As we look ahead, there continue to be challenges for UK consumers, but as a long-term business our focus remains on ensuring we are well positioned to support our advisers build great relationships and deliver trusted and valued face-to-face advice over time.
“This commitment underpins our 2025 plan and will enable SJP to capitalise on the scale of long-term market opportunity ahead.”
Last week (July 10), SJP said it was making the move towards a more global approach after deciding to not solely invest in UK government bonds.
The wealth management company revealed it will be making the change in its gilts and index linked gilts to invest in global government bonds.
To reflect this change, it will rename the funds to the Global Government Bond, managed by Wellington, and the Global Government Inflation Linked Bond, managed by BlackRock.
amy.austin@ft.com
