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SJP assets hit record £41.8bn as new business booms

by Alex Steger on Oct 24, 2013 at 07:45

SJP assets hit record £41.8bn as new business booms

St James’s Place (SJP) has seen assets under management soar to a record £41.8 billion after adding £7 billion in the nine months since the retail distribution review came into force.

The restricted advice group saw net inflows of assets under management of £1.03 billion in the third quarter of 2013, while assets increased to a record £41.8 billion, up 5% on the previous quarter, and up 20% since the start of the year.

New single premium investments for the three months ended 30 September increased to £1.7 billion, up 27% from £1.3 billion in the same period last year, while total new business on an APE basis was £203.9 million, up 23% from £165.6 million in the third quarter of 2012.

For non-manufactured long-term savings, in the third quarter of 2013 investment premiums were £54.1 million, up from £7.5 million the same time last year, while single pension premiums were £96.3 million, down from £117.6 million in 2012.

David Bellamy, SJP chief executive (pictured), said : ‘I am very pleased to be reporting another quarter of strong growth in new investments which, combined with our investment performance and the continued high retention of our clients' existing funds, saw our funds under management increase by £1.9 billion in the quarter to a record £41.8 billion, up £7 billion since the start of the year.’

‘The momentum in our business is such that we remain confident in our ability to deliver growth in line with our objectives during the final quarter of 2013 and beyond.’

43 comments so far. Why not have your say?

LK

Oct 24, 2013 at 08:11

£7billion x 3% commission sorry adviser charges = £210,000,000.

Really, really pleased for SJP.

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HH via mobile

Oct 24, 2013 at 08:15

I wondered what would happen to All those greedy commission chasing so called advisors who can't cope with the transparency and professionalism push brought about by RDR. Found hiding under a rock!

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Bindair Dundat

Oct 24, 2013 at 08:28

4.5% is what is taken from new funds - their increase in aum plus new inflows = growth. Assume £2bn is growth and inflows is £5bn then clients have paid £225,000,000 in "fees" with £75,000,000 of that going to SJP to cover marketing costs - wow, what a great model. Hector is now off poorly which is a shame. It is also a shame that on his watch he allowed a completely unlevel playing field to be allowed to run and continue to run. Hopefully, Wheatley will act and act soon

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Odin

Oct 24, 2013 at 08:29

@LK

Hopefully all the tied advisors at SJP decalre their income so £210,000,000 X appropriate income tax rates is great for the exchequer!

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EVHE

Oct 24, 2013 at 08:32

Congratulations on the continued positive story.

Not the cheapest products or the most flexible but in my humble opinion a master class in relationship management.

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Kate Brookes

Oct 24, 2013 at 08:33

Could there be a case (just throwing it out there) that some members of the general public actually prefer the commish stylee remuneration rather than the pure fee based model championed by RDR?, despite the efforts of the nanny state to tell them otherwise? Could it be that in SJP, investors have what looks on the face of it something of a choice about how they remunerate for advice? Just askin'.

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Simon Webster via mobile

Oct 24, 2013 at 08:38

With 2,000 advisers that's only £105,000 a head plus trail - so good but not fortunes.

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Paul B via mobile

Oct 24, 2013 at 08:41

Can anyone explain just how they get away with shoehorning new clients assets into their own products from all the businesses they so happily threw money at when IFA's exited the industry last year . Despite various comments from the regulator on the subject they never mention how they monitor SJP in this respect ,why? There is really only one conclusion to be drawn by the rest of us surely ? Will the FCA turn a blind eye as the FSA did for so many years ? Discuss.

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chris woods

Oct 24, 2013 at 08:41

If these numbers are to be believed (and no reason why they should'nt be), should the regulator demand that firms like SJP reduce their fees somewhat. Let's face it, when the next market downturn comes, be it 40% correction (like last time), or whatever it turns out to be, SJP and the like will still be helping themselves to these ludicrous fees - surely this model is broken,...does the regulator care ?

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Dolores Chimichanga

Oct 24, 2013 at 08:45

I blame Bowker Davies in Melton Mowbray, they trained up Jeremy Clay to be the leading SJP executive he is today!

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David Parkinson

Oct 24, 2013 at 08:46

Spot on Kate.

What a monumental waste of everyone's time energy and money RDR has turned out to be.

P.S. My clients don't seem to care what its called, commission/fee. They just do not want a time costed account which as we all know is as open to abuse as is overcharging commissions.

Right there you are RDR zealots! Off you go!

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Ian Lees

Oct 24, 2013 at 08:50

In this world of insolvent banks . . .destruction of the Independent Financial Adviser sector - by a Govt and the introduction of RDR and the current recession, the reduced benefits and the destruction of the NHS, the increased taxes - that one company have their business model correct, and thrive. There may be lots of ways they achieve this - and they have achieved this success - after having been owned by some 49 % by LloydsTSB - prior to the sell off of their shares - apparently the only part of the company making profits. Pity the in house tied and restricted advisers of Lloyds and TSB and scottish widows could not even follow.

Well done to a company which is well run - and achieves great things for their clients - and example to all in the insurance industry.

For those who are envious of their success - they may wish to concentrate their efforts on copying their success - or beating it. Now that is competition !

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Dan Rear

Oct 24, 2013 at 08:58

I wonder how much of the new AUM is 'new' as opposed to Ch----ed from existing, and in most cases, quite good plans/policies??

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chris woods

Oct 24, 2013 at 08:59

How do you measure success - overcharging people and lining your pockets while providing index tracker type returns. Like your style.

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James via mobile

Oct 24, 2013 at 09:14

So that's the net inflow, typical spin, lets just have figure that left sjp. Why did it leave?

Agree with majority comments why do fca sit and watch, be interesting to see where the new business originated from. I suspect like a newly signed up company who were pro passive at 1% and have now jumped ship to active sjp. Anything to do with their interests before clients?

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Smithling via mobile

Oct 24, 2013 at 09:16

Nothing will change. SJP is a great model. All they've done is replace bancassurance so there should really be no impact on proper Advisers.

I'd say their funds are better than most bancassurance funds too. Either way, they're there to mop up the advice gap, go for it.

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Cromwellsbrain

Oct 24, 2013 at 09:26

Dan makes an excellent point. It is well documented that many former 'IFAs' moved to the SJP model as a result of RDR.

Many SJP advisers will be following this link (I am sure); can you please confirm that client assets move to the SJP model when you move - or presumably you cannot get paid.

I suggest that a large proportion of new SJP funds moves in this way.

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Jon Pemberton

Oct 24, 2013 at 09:28

Daniel Rear...you bitch!

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Jonathan Kirby

Oct 24, 2013 at 09:28

As Kate Brookes says people like the old model and this shows that many have shunned the 'brave new world' of the idealists.

Having said that, SJP have a storm brewing on the horizon as apparently all this replacement business that ex-IFA's have brought in hasn't gone unnoticed.

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Tim Page

Oct 24, 2013 at 09:49

Would any SJP partners like to comment on the rumours that SJP have recently embargoed all ex-IFA / new-partners from switching/transferring assets over to SJP for a 3-year period after they join SJP?

I'm not saying it's true and that's why I'm asking.

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Ian Lees

Oct 24, 2013 at 09:59

In the case of Banks and insurance companies and tied agents - the client belongs to the sponsoring company. Under Independent Financial Advice - the relationship is between the Independent financial adviser and the client. Banks and Ins companies and Tied Agents - bring their clients to the Tied Agent ( as a wholesaler ) - and getting out of the restricted advice area - ay be more difficult than under an Independent adviser - who offers whole of market. Many dirty tricks - and some clan ones can frustrate and defer and deter - a client ( who is Piggy in the Middle ) - and whilst at Scottish widows our training was to churn business from other companies by what ever means necessary. Some broker consultants preferred not to - given the fact they were looking for new business and repeat business - but there were individuals who were willing to lose their integrity and sell their soul ! One way of catching this churning of clients and client banks is already in place with" transfer" legislation under FCA - the key features which highlight the new and up front charges. The flogging of products on offer by Arch Cru and Key data are examples of over zealous activity - by the rampant sales person - glued to earning commissions - and moving on. This is the business structure of tied agents and restricted advisers " working their sales force", using the 80 20 Rule - using targets - and dumping poor achievers ( who usually go off and become frustrated or malicious slanderer - rather than take what they learned and put it to good use, for their clients benefit and their own. Having been effectively slung out of the group - they may feel used and abused and have low self esteem. Many others go forward and make great successful businesses forge great business partnerships - whilst the tied agent sector continues to revolve around significant changes in appointed reps - targets and flow of sales. Some companies like SJP have great administration - but others have no interest - because the sales process remains - speak to 30 people get 10 appointments and THREE Sales. If one sale in three drops of the figures and business written should sustain you - through that year. Another year another target - changes in management changes in direction - or perhaps the company is sold eg Abbey Life Allied Dunbar ( or as other may know it . . ." All Lied ?" ). These slick processes work - how it works for the client is the concern . The aim of the one shot sales person - who never sees their Principals client for another six years . . . In my opinion the business model is wrong - and is used by those who are not committed to their client - but driven by targets and commissions. BE advised I have no objection to commission s provided the Principal operates a good compliance structure - with client interest uppermost, which is all too often not the case. However RDR is driving advisers into these companies driven by sales and fear - was this the intended consequences of the FCA and RDR ?

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Ian Lees

Oct 24, 2013 at 10:03

@Jonathon Kirby - such a move could also be laid at the door of many a wrap account such as standard life etc., where " new business ", is in reality churned business - and claims about their charges coming down - ao quickly so often , and their advertising - of reduces charges - cheap unethical trading standards ?

The transfer of business by insurance companies - churning endowments and pensions and now wrap accounts for .. . . . ? Is that reaaly competition ?

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levelplayingfield?

Oct 24, 2013 at 10:04

'Partners'? Doesn't that sound like an 1890 Act partnership or an LLP member, of which SJP firms and their principals are usually neither? This must be really confusing to a buying public?

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Investment Guru

Oct 24, 2013 at 10:09

How much will a Partner at SJP earn this year?

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Cromwellsbrain

Oct 24, 2013 at 10:16

@Tim Page

Quiet, isn't it?

No responses to my earlier post about moving former IFA assets, nor on your question about a rumoured embargo....

Either the SJP hierarchy have forbidden their sales staff from divulging detail (in this new era of transparency?) or there is an embarrassment about practices.

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l'ifa passeport en provenance de France

Oct 24, 2013 at 10:23

Cromwellsbrain

An arrow visit ....

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James Marchant

Oct 24, 2013 at 10:40

An acquaintance of mine has a brother who has recently joined SJP from Lloyds and apparently this chap has been told that he cannot churn... apologies 'rebroke' existing Lloyds clients over to SJP.

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Christopher Petrie

Oct 24, 2013 at 10:44

@ Tim

I also know of an IFA who was told SJP wouldn't allow him to churn investments less than 5 years old into SJP products.

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Michael Brown

Oct 24, 2013 at 10:45

Let me give you a true story, very recent.

Client has £210k in a pension plan, reviewed and rebalanced quarterly. Funds switched at no cost etc.

SJP go in and the report you cannot believe, the client wants the expertise of Stamfords, really he does not know who they are?

But the charges are 4.5%, yes just under £10K. The comparison against the current plan is pitiful to day the least. I.E. SJP 30 funds current plan more than 35, actually 1200. AMC SJP 1.25% Other plan between 1.05% and 3.8%. Actual TER is 1.69%. SJP also have an extra 0.25% charge that can be added for a more comprehensive review.

Client informed by SJP that there funds have outperformed the current plan by 30% over the last 18 months. Incorrect the higher risk fund portfolio has achieved 0.1% on average over the last 5 years. Over the last 18 months outperformed by 1.6%. Risk level of current fund 2 out of 5. SJP 4 out of 5.

Client informed by SJP salesman would not get the full £10k up front. Checked with SJP compliance, all monies paid out up front so an obvious lie again.

Report given to client over 1 month after the sign up and after the policy has been transferred!

And finally the plan also has 6 year penalty of 6% in year one down to 1% in year 6. Disgraceful.

Now this in my humble opinion is not what RDR was supposed to achieve or perhaps it was for the likes of SJP?

How can they quantify this huge commission and the report is so vague that our compliance people fail it.

Perhaps a job at the FCA is for me so I can review these distasteful and shady tactics? As mentioned earlier we know where the shady advisers have gone to and I do hope that Jonathan K is correct!

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EVHE

Oct 24, 2013 at 11:32

Intrigued by the anger generated by this article. We can all no doubt give examples of poor ethics around advice by all forms of distribution.

The point is being missed and that is the typical SJP demographic I would suggest is relatively investment savy. The client values the "partner" and his relationship and is probably aware that they don't get the greatest fund choice and the products aren't the best.

I have certainly focused my business over the last year to focus on what the client wants rather than trying to guess what they want.

Service, support and vision rather than me pretending to be a fund manager has been very well received.

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Michael Brown

Oct 24, 2013 at 11:40

EVHE

With you on this but these sly foxes are out about all over the place and would sell sand to the Arabs for a penny! Well 4.5% regardless

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Ian Lees

Oct 24, 2013 at 12:05

@James Marchant - that may be more to do with the quality of LloydsTSB clients ? However it seems a reasonable to prevent advisers joining the SJP business model to churn policies from existing clients - for commission for the benefit of the adviser - rather than the benefit of the clients. IF this is the case they are to be congratulated - and perhaps some well known with profits companies based in Edinburgh could take these activities as an example !

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Ian Lees

Oct 24, 2013 at 12:06

@ Cromswells brain . . .OR THEY ARE WORKING WITH CLIENTS ? ? ? ?

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Reg

Oct 24, 2013 at 13:04

New inflows over past co0uple of years reflects in part the large number of ex-bank advisers who were made redundant en masse from the likes of Barclays and HSBC and who have been able to ' switch ' assets without any defence plan in place, the banks having given up the ghost on face to face advice.

Myself and colleague were ' entertained ' by SJP who were keen on our existing client book and who graphically showed us how much we would earn if we ' switched ' assets across - quite eyewatering but too many smoke and mirrors and interests were not, in my view, truly aligned with those of the client.

I do though admire their first class marketing and reporting and literature etc and wish my current firm ciould come close to it..

I do wish the self employed Advisers though wouldn't refer to themselves as being ' Partners ', they are all looking out for themselves and their model means that it is every man or woman for themselves. I associate ' Partner ' with a professional practive whereby it is a team effort with everyones interests being aligned.

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Jonathan Kirby

Oct 24, 2013 at 13:46

COBS 2.1.1. States

"A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule)".

As Michael Brown's post shows this is most obviously not the case and is presumably why there has been a temporary ban on churning for new joiners.

SJP are the General Portfolio of the current era. Very flash and tend to sell to people's ego's.

If the FCA want to be seen as credible this is precisely the kind of firm that will be top of their agenda and, it is my understanding that SJP are very much in their sights.

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Mark Angus

Oct 24, 2013 at 15:53

I think I might do a mystery shop on SJP and see for my self how they operate. Might learn a thing or two.

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chris woods

Oct 24, 2013 at 16:02

good idea,...why don't you go and pose as a candidate for a partnership claiming you have several 100mm of assets to move and they will no doubt tell you the vast size of the cheque they will give you should you transfer such assets,....let us know how you get on !!

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Mark Angus

Oct 24, 2013 at 16:10

Was thinking of posing as a client to begin with.

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Reg

Oct 24, 2013 at 17:01

Mark - try to get an invite to one of their ubiquitous seminars so you will at least get a free cup of tea and a cake inside you before they get to work with their patter...................whatever you do though don't mention the phrase ' TER ' since it brings people out in a cold sweat.

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Ian Lees

Oct 25, 2013 at 09:10

@Reg . . . TER does not matter when you compare it to service, including teas and cakes. . .it is the client relationship . . .which makes successful companies like SJP Hargreaves Lansdowne . . .that matters most. If you want something cheap go to a 99 P shop - or Pound World . . . .If you want great service go to an Independent Financial Planner - where service is paramount - the client is told the fees up front . . . .

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Ian Lees

Oct 25, 2013 at 09:15

@ Mark Angus you do not need to go in disguise - they are quite open about service - they are very open they are in business - a successful business, a prolonged successful business in decades not years - go forth, learn and find out how a successful business operates. Go to CII/PFS or IFP learn how to run a successful business - there are los of people who want to see you succeed - there are other who are envious . . .and jealous . . .if they are really better than SJP - let their business do the talking . . . . . .

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Reg

Oct 25, 2013 at 09:25

Ian - fully acknowledge your comments but there are TERs and there are TERs. I would like to think that most firms strive to provide a first class service and professional success is built on nothing but good relationships. I just think personally that perhaps clients do not know the full picture of what they are paying sometimes, fees are just one part of the equation.

Like I said, I take my hat off to SJP for their marketing and literature etc but I think they are very expensive for what they are - clearly the growing AUMs confirm clients are happy with what they are getting ( if the full story is told ) .

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chris woods

Oct 25, 2013 at 09:44

cut the bull,....quite clearly some firms over charge for nothing better and in some circumstances much worse than index tracking perofrmance. if you add those fees up over a 20 - 30 year period (the length of time someone might have a potfolio invested, then I hate to think of what is paid away in fees,..but it's probably approacjing 50% of the clients assets.. Of course the clients do not know, but why should this get in the way expensive looking literature,...quite the opposite !

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