St James’s Place is refusing to compensate investors who lost £1.35m following a rogue adviser’s recommendation to back a start-up that was not approved by the wealth manager.
Philip Cox, who has been an adviser at SJP for more than a decade, convinced 17 clients to pour their savings into Green World Innovations which went bust last October, according to the Sunday Times.
Using SJP company emails and letter headed paper Cox persuaded clients to make investments in the unregulated business set up by his school friend between 2014 and 2019.
SJP has denied any responsibility for customer losses on the basis it did not approve the investments.
The Sunday Times reported in March the Financial Conduct Authority had launched an investigation into Cox on the back of complaints. The newspaper spoke to five of Cox’s SJP customers, including a couple in their 80’s who had poured £500,000 into Green World over three years and a breast cancer survivor, who claimed they only invested in Green World because they thought Cox was a representative for SJP.
At the time SJP said it was “extremely concerned by these allegations” and would investigate the matter internally.
SJP boss says wealth manager cannot help affected customers
But it has now been revealed SJP boss Andrew Croft sent a letter to affected customers last week saying the wealth manager cannot help after its internal probe found Cox never depicted the Green World investment as SJP approved.
Croft wrote that Cox “is emphatic that his clients were aware that this was separate and distinct from any product or service provided by SJP”.
He added this view was supported by at least one client who invested in the defunct start-up and by others who have not complained.
SJP told Portfolio Adviser it had nothing further to add. The Sunday Times has also approached Cox for comment.
Cox was not forced to leave SJP and the wealth manager said no concerns about him had been flagged following the wealth manager’s regular review of advisers.
He left Warwickshire based Grosvenor Financial, which became an SJP partner in 2009, in 2019 after over a decade at the advice business. He is now a managing director of a medicinal cannabis business called Medicaleaf.
Currently SJP has 4,270 advisers in its restricted adviser network which are “appointed representatives” of the wealth manager. As the “principal” firm SJP is responsible for products sold and advice given by its representatives, according to the FCA’s rules.
A 44-page document provided by Cox to investors touted Green World as having access to a “world-leading environmental product” and stated the firm had a trading profit of £282,299 in the year ended September 2017 despite the fact records from Companies House show it made a £5.7m loss over the same period.
Complaints have been referred to the Financial Ombudsman Service.
