On Wednesday, a leaked internal document from Schroders Personal Wealth revealed first-year client fees, inclusive of all account set up costs, administrative and trading charges, run at an average of 7.9% for SJP and 4.7% at Brewin Dolphin, versus Schroders pricing at 3.6%.
An SJP spokesperson said: “We do not recognise these numbers, which are an inaccurate and wholly misleading representation of our charges.
“Independent research by Grant Thornton shows that St. James’s Place has competitive charges compared to other fully advised wealth management services in the UK.”
A slide seen by Portfolio Adviser on the Grant Thornton analysis revealed there were 20 firms included for comparison including Hargreaves Lansdown, Investec, Brewin Dolphin, Quilter Investors, Rathbones, Lloyds Banking Group and others.
Schroders Personal Wealth declined to comment.
Grant Thornton report produced for SJP
Darren Cooke, chartered financial planner at Red Circle Financial Planning, who initially questioned SPW’s numbers, said: “I have previously seen the Grant Thornton report and knew the numbers Schroders Personal Wealth are quoting are well above those.
“That said, the Grant Thornton report was produced for SJP so I would take that with a pinch of salt as well as I’m sure it represents the lower end of the fees range with SJP.
“I would suggest what it does show is not that SJP or SPW for that matter, are competitive with other wealth managers but in general these businesses are all too expensive and take too much money out of a client’s returns. If an average balanced portfolio over the last 25 years has returned something like 6.5%, they are taking more than a third of that in fees.”
But Fundscape CEO Bella Caridade-Ferreira said SJP is “comparing apples and pears”. “SPW referred to ad valorem charges per client. SJP is talking about the reduction in yield percentage – two different things.”
She said without knowing what the underlying assumptions and inputs for each company are, the reduction in yield data means very little.
CWC Research founder Clive Waller said while he wasn’t familiar with the research by Grant Thornton, he did see Numis research a while back “that didn’t show SJP up well”.
“If they don’t recognise these numbers, they should counter with their own. The problem is the lack of real transparency.”
Caridade-Ferreira added: “Nobody, least of all SJP clients, can make heads or tails of SJP’s charging. Their fees are all bundled up, and that was banned in 2013. It would be a relatively straightforward matter for SJP to provide a breakdown of its charges so that everyone, but in particular its customers, could understand how they stack up and compare with others.
“Transparent and easily comparable information is what end consumers need.”