St James’s Place faces 15,000 overcharging claims
St James’s Place has come under further pressure after it was revealed that the wealth manager faces more than 15,000 overcharging claims, which combined with other customer complaints, could cost the firm as much as £426m.
AMK Legal, based in Bolton, has filed the claims on behalf of St James’s Place clients over the last three months, according to a report in The Sunday Times, who claim they have been charged for annual reviews of their investments that never took place.
Last week, St James’s Place said in its annual results that it had set aside £426m to deal with complaints from customers that they had been overcharged, based on claims between 2018 and 2023. This money will be used to cover all the claims to SJP, including admin costs, not just the AMK claims.
However, AMK said it is currently seeking compensation for clients going back as far as 2013.
The firm’s stock plunged 32.9 per cent following the announcement on Wednesday, where it also revealed it would be cutting its full-year dividend to 23.8 pence per share from 52.8 pence per share in 2022.
AMK said that so far it has won £12m in compensation on behalf of 4,000 clients and has been having regular meetings with St James’s Place.
Michael Jordan at AMK told the paper: “The announcement by SJP talks about a review of fees charged between 2018 and 2023.
“We are hoping that the Financial Conduct Authority [the regulator] and SJP see sense on this and offer redress to anyone that has paid fees since 2013 and not had an annual review.”
The wealth manager hired 90 extra staff to deal with such complaints at the end of last year.
St James’s Place has been frequently criticised for its high fees, especially its early withdrawal charge of up to six per cent of the value of a portfolio. Last October, it said it would be scrapping this charge, but has not rolled it out yet.
Speaking to The Sunday Times, St James’s Place said: “We take all complaints very seriously and each will be considered on its individual merits. We know that clients value what SJP offers and, while we take comfort in strong levels of client satisfaction, advocacy and a retention rate of 95.3 per cent, it is important that clients receive the services they pay for.
“That is why we have committed to reviewing our records to the start of 2018 to ensure clients received the services from their adviser that they paid for. If for some reason they didn’t, or we can’t find evidence that they did, we are going to refund the ongoing service charges.”