St James’s Place advisers are threatening to stop selling investments for the rest of the year in protest of their annual luxury cruise being scrapped, a move which some suggest could land the firm in hot water with the regulator.
Staff members had been packing their bags for an excursion around the Greek islands when SJP axed the company’s week-long overseas conference last month, 10 days before advisers were due to set sail.
An adviser at the firm told The Sunday Times that some employees who felt they had earned their holidays this year or were close to hitting the requisite sales targets were refusing to flog investments to clients until the end of 2019 unless they are compensated for the loss of the holiday.
SJP has said it would cover expenses incurred ahead of the trip like advance airport parking but would not reimburse advisers for the actual value of the holiday.
An SJP spokesperson said feedback from partners to the consultation had been “overwhelmingly supportive” so far and that the firm would continue to seek views from a broad range of shareholders over the coming weeks.
“We recognise that rewards and incentive programmes should be proportionate and balanced for supporting positive client outcomes and other business objectives both today and the company we want to be in the future,” they said. “As previously stated, the consultation is ongoing and we hope to conclude it by the end of the year and share the findings with the Partnership in the new year.”
‘Strike’ in breach of FCA rules?
CWC Research founder Clive Waller pondered whether SJP advisers’ “strike” would put them on the wrong side of the regulator.
“Are they in breach of FCA rules in refusing to advise clients until sales perks are reintroduced? Clearly, they should be,” he said.
If SJP advisers follow through on their threat this would eat into the firm’s bottom line. A secret diary written by a former employee, also published in The Sunday Times, revealed SJP advisers earn £250,000 a year before bonuses when managing about £70m for 700 clients from which the firm makes £1m a year in fees.
SJP’s rewards programme of “cufflinks and cruises” and showering advisers with lavish gifts for meeting sales targets has come under intense scrutiny in the last month, prompting accusations that it is making a “mockery of regulations”.
SJP managing director Ian Gascoigne had already warned a chunk of the firm’s advisers that annual cruises to exotic locales could be on the chopping block, in leaked audio obtained by The Sunday Times.
Gascoigne acknowledged change was needed but at the time two cruises in Spain and Greece were still going ahead.
