St James’s Place confirms overhaul of controversial fees after regulatory pressure
St James’s Place has confirmed it will overhaul its fee structure and scrap a controversial exit fee today after reportedly coming under pressure from regulators to fall in line with stringent new consumer rules.
The UK’s biggest wealth manager said today it had completed an “internal evaluation” of its fees and would push through an overhaul for the “vast majority of new investment bonds and pensions”.
The changes will see an initial and ongoing charges levied on clients but without any early withdrawal charges (EWC) or a gestation period. Bosses said they will also carve up charges across its various wrappers into component parts which will be tiered for larger investments.
“These changes, which have naturally involved engagement with our key regulators, address the evolution over time of an external environment that is increasingly seeking simple comparability of all advice, investment management and other services, on a component-by-component basis,” St James’s Place said in a statement.
St James’s Place boss Andrew Croft said the changes announced “are about positioning our business for continued success”.
“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,” he added.
Reports that St James’s Place was reviewing its fee structure last week sent shares tumbling some 14 per cent at points on Thursday. Its share price was also down around 4.6 per cent as markets prepared to open in London.
The firm has come under pressure from the City watchdog, the Financial Conduct Authority, to fall in line with its stringent new consumer duty which looks to boost outcomes for consumers, the Financial Times reported.
The London-listed funds group said in a statement last week it was conducting an “assessment” of its fees and charging models after the introduction of the Consumer Duty this summer.
Bosses have also come under fire in recent months for topping a list of poor performing money managers with the most so-called ‘dog funds’.