St James’ Place:
Troubled Wealth Manager Sets Aside £426million to Cover Client Complaints About Service Provision

St James’s Place (SJP) is one of the UK’s largest wealth management organisations, offering investment, retirement, protection, intergenerational wealth management, banking and mortgages, and business advice. According to its website, at the time of writing, the firm has 958,000 clients with almost £170 billion of funds under the management of its 4,800 advisers. However, in late February 2024, SJP announced it was sidelining nearly half a billion pounds to cover expected client compensation claims.

SJP has had its share of controversies over recent years, mainly relating to its obscure fee structure, non-existent ‘ongoing advice’ and negligent advice from some of its advisers, known as ‘partners’, including:

• A Which? investigation in 2017 which found that some partners were misleading customers on charges related to their service.
• In 2019, an SJP adviser ‘misled’ a client to persuade her to transfer over £60,000 to his company’s funds, allegedly using forged documents. This caused the Financial Ombudsman Service (FOS) to raise serious concerns.
• A group of 14 ex-footballers sued SJP over poor advice on tax avoidance and overseas property schemes, bringing a claim worth around £15 million.

The 2017 Which? investigation also found that clarity around SJP partners’ independence was lacking. Partners are self-employed but can only recommend SJP funds, as opposed to an independent financial adviser with access to the whole market. This was not always made clear to clients.

Following a crackdown in 2023 from the Financial Conduct Authority (FCA) to hold firms accountable for delivering good outcomes to consumers, known as the Consumer Duty, SJP announced an overhaul of its fee structure, scrapping controversial exit fees, capped advice fees, and fund charges. The new fee structure, including the controversial exit fees, will only be available to new investors from the end of 2025, so existing clients – and clients who sign up before the new structure is implemented – will still need to pay fees of up to 6% if they leave within six years.

In February 2024, SJP confirmed that it was putting aside £426 million to cover compensation for client claims relating to ‘ongoing advice’ packages they had not received.

According to The Telegraph, the firm charged clients an ‘all-inclusive fee’ which covered a range of components, but it was not communicated to clients precisely what was included, which resulted in them paying for an annual review which was not always being conducted. This ongoing advice charge, paid annually, is 0.5% of the clients’ total pot, so a client with £500,000 with SJP paid £2,500 a year for advice they did not receive and may now be owed back.

If you have invested with St James’s Place and think you have been paying an annual fee for advice you have not received and would like to discuss your options, speak to TLW Solicitors’ experienced financial mis-selling team.

Working on a ‘no win – no fee’ basis, TLW’s experienced financial mis-selling lawyers can help you through the compensation process, whether this is settled in the early stages with SJP directly or with the Financial Ombudsman Service (FOS). FOS is an independent government-backed body responsible for resolving disputes between financial institutions and their customers, where this cannot be done informally.

TLW Solicitors’ team has extensive experience successfully taking cases to FOS and securing client compensation, even if they have been knocked back previously.

Sarah Spruce, Legal Director and Head of the Professional Negligence department at TLW Solicitors, commented:

“When entrusting your wealth to a well-known financial management firm, like SJP, you expect your adviser to provide you with clear, transparent guidance, not hidden fees and non-existent advice. Former SJP clients may be entitled to significant refunds, which is evident from the almost £500 million compensation pot SJP has put aside for claims, so it is important to get a clear assessment of your circumstances as soon as possible. My team can help you do that.”