St James’s Place (SJP) will change its charging structures from the second half of 2025, according to the firm, in a bid to keep costs “sustainable and competitive”.
In an announcement on the London Stock Exchange today (17 October), the firm said any new investment bonds and pensions will retain an initial charge and ongoing charges, but will no longer charge investors for early withdrawals and will have no gestation period – which is how SJP’s unit trust and ISA arms of the business already operate.
In addition, charges across all of the firm’s wrappers will be divided into separate components including initial and ongoing advice, investment management and product administration – the latter of which will also be tiered for larger investments.
Overall charges will be rebalanced to “better reflect the value clients see across each element of [the company’s] proposition”, according to SJP, although details of this have not yet been disclosed.
From a shareholder perspective, SJP said the changes and implementation costs “will affect the shape” of the firm’s underlying cash result “over the next few years before growth accelerates over the medium term and beyond”.
Andrew Croft, chief executive officer, said: “We have always been confident that SJP offers its clients real value that helps individuals and families achieve financial wellbeing. However, it is increasingly evident that consumers are seeking simple comparability, and this has been reflected in regulatory trends too, as highlighted with the Assessment of Value and Consumer Duty regimes. The review of our charging model reflects these developments.
“I am confident that SJP’s ability to both deliver and demonstrate value in the future, with this sustainable model of charging for our end-to-end services, is good for clients and represents an exciting opportunity for SJP.”
SJP also released its quarterly results today, covering the last three months to the end of September 2023. The firm saw gross inflows of £3.7bn for Q3, compared to inflows of £4.1bn over the same period last year. Net inflows stood at £910m, compared to £2.2bn during Q3 2022. Closing funds under management for the overall firm have ticked up, however, standing at £158.6bn compared to £143.1bn last year.
In terms of the investment and DFM arms of the business, net funds under management suffered respective outflows of £70m and £20m. However, the pension arm saw inflows of £1.2bn. Since the start of the year to the end of September, SJP’s investment division saw outflows of £80m, while the DFM side inflows of £340m.
Croft said the results reflect “another robust quarter” for SJP, pointing out that advisers attracted £3.7bn of new client investment not the business, while year-to-date annualised retention rates stand at 95.3%.
“The demand for trusted, face-to-face financial advice remains as strong as ever, but client capacity and confidence to commit to long-term investment continues to be impacted by an environment characterised by higher interest rates, stubbornly high inflation and short-term alternatives in the form of cash,” he explained.
“Despite the challenging operating environment, we continue to generate significant levels of net inflows, once again demonstrating the ongoing resilience of our business model.”