Sipp and wrap provider James Hay is on the comeback trail after a period of appearing to be in dramatic decline, according to managing director Tim Sargisson.
Sargisson is candid about the company’s recent problems, which included losing IFA business, attracting complaints, and spending hundreds of thousands of pounds on compliance following a Financial Services Authority (FSA) Arrow visit.
Sargisson said the recently revamped wrap, complete with new charging structure, and newly launched full Sipp and online iSipp, were part of a company-wide turnaround that would put James Hay back on the front foot in the run up to the retail distribution review.
However, he is aware the brand has work to do to win back advisers’ business and trust.
‘We knew, in terms of new business, we needed to do work on the Sipp. Then we turned our attention to the wrap and we knew again from adviser experience that it was not highly thought of,’ he said. ‘Unfortunately, there was no real development work on the wrap so it fell behind.’
Sargisson said he hoped the repricing of the wrap, which was announced recently, would go some way to rehabilitating it in advisers’ eyes.
‘There were a few critical issues,’ he said. ‘One was pricing. It was not competitive, and IFAs were concerned the wrap would fall further and further behind and they would be under pressure to move clients.
‘The difficulty is you can’t only reprice your wrap going forward. It’s not a like a Sipp where you mothball a product and launch a new one. With a wrap, you reprice the back book as well.’
Sargisson (pictured) said James Hay was getting a reputation for complaints and, while not blameless, he said the company did not help itself by having a disjointed approach to IFA support and too much willingness to take a bullet for advisers.
‘If you make the mistake, you are duty bound to sort it out, but we were trying to sort out errors that were clearly down to the IFA or indeed the client. We ended up taking on their problems and in some cases paying redress.
‘But there were problems within the organisation. It was because we worked on a functional basis. It was like a production line. We have moved to a team-based approach and given the teams ownership of the IFA relationship.’
When James Hay’s parent company,IFG Group, announced it had spent £800,000 on boosting compliance, with most of this going towards James Hay, it looked to have stopped the revival in its tracks.
However, Sargisson said much of the spend was forward looking, as James Hay was planning to acquire other Sipp providers, and a large portion of the money was to fund salaries for new risk and compliance roles.
‘We had said we wanted to acquire other Sipp businesses and I think it is fair to say the FSA would expect us to improve resources in , internal audit and risk management. So [the increased spending] is a reflection of the extra resources we have put into those areas,’ he said.
Tim Sargisson CV
2010-present James Hay Partnership, managing director
2002-2010 The IPS Partnership, managing director
2000-2002 Smith & Williamson, marketing director
1989-2000 Lucas Fettes, director
1987-1989 NPI, agency representative