Underperforming portfolios known as 'dog funds' have risen by 170% across the financial industry in the last six months.
SJP’s ‘dog funds’
+ −Bestinvest, an online investment and coaching service, publishes its Spot the Dog report twice yearly to highlight investment funds that are consistently underperforming or delivering poor returns. The most recent edition covers the period from 31 December 2020 to 31 December 2023.
According to the Sport the Dog report, a ‘dog fund’ is defined as one that has:
1. Failed to beat the benchmark over three consecutive 12-month periods
2. Underperformed the benchmark by 5% or more over the entire three-year period of analysis
Wealth Management firm St James’s Place (SJP) features prominently in the latest Spot the Dog report, despite seeing a slight improvement in the past six months since the previous edition.
The firm currently holds £18.5 billion in three dog funds, namely:
- SJP Global Quality
- St James’s Place International Equity
- St James’s Global Emerging Markets
The Spot the Dog report aims to provide investors with sufficient data to make informed decisions about their investments and encourage fund groups to act on underperforming funds.
Struggles at SJP
+ −Over recent months, St James’s Place has been in the headlines for various reasons relating to hidden advice fees, high exit fees, and unsuitable advice.
SJP topics we have recently highlighted include:
- The Financial Ombudsman Service (FOS) ruling that SJP clients were given unsuitable investment advice
- Former England footballer Chris Smalling suing SJP over undisclosed fees
- SJP ring-fencing £426 million to cover expected client complaints relating to advice fees
Following a 2023 crackdown from the FCA, known as the ‘Consumer Duty’, which aims to hold firms accountable for delivering good outcomes to consumers, SJP announced an overhaul of its fee structure.
The new fee structure, including the controversial exit fees, is only available to new investors from the end of 2025. 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.
The Financial Ombudsman Service (FOS), the government-backed body responsible for investigating and resolving disputes between consumers and their financial services providers, has also upheld several complaints against SJP relating to the firm’s unsuitable investment advice. As a result, current and former clients of the wealth manager have received compensation or reimbursement for poor returns resulting from the advice they were given.
Most recently, industry publication CityWire compared SJP’s inflow data (the money retail investors put into mutual funds) from the first quarter of 2024 (January to March) to the same period over previous years. It revealed that the firm’s net inflows were at the lowest since 2012.
While still seeing £710 million of net flows at the start of 2024, this is a 70% dip in the firm’s 2017-2023 average for the same period, which CityWire suggests could be attributed to several factors:
- investors holding off until the fees and exit charge overhaul in 2025
- negative publicity
- SJP advisers focusing on annual reviews (rather than business development)
- partners ending their connection with the firm
TLW Solicitors’ view
+ −Sarah Spruce, Legal Director at TLW Solicitors, heads up our experienced Pensions and Investments Claims team and says:
“While the number of SJP ‘dog funds’ has reduced since 2023, the number and value that it holds are still concerning. If you have investments with SJP in any of these funds or are worried about mis-sold products, unsuitable advice, or hidden fees, speak to a member of my team today. We can have a no obligation discussion about your options and whether you may have the basis of a ‘no-win-no-fee’ refund claim.”
TLW Solicitors can help
+ −If you are a current or former client of St James’s Place and are concerned about your investments, get in touch with the professional negligence team at TLW Solicitors for a no-obligation conversation about your claim.
You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete one of the forms below.
Time limits can apply, and so anyone wishing to bring a claim should do so without delay.
Minimum claim values apply.
TLW Solicitors pledge to:
- Always fight your corner.
- Explain anything you don't understand.
- Provide full transparency on our charges.
- Never ask for any upfront payment.
- Recover the best compensation we can.
- Keep your personal information safe.
- Respond quickly to any queries.
