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SJP sees new business soar 46% in run-up to RDR

by Alex Steger on Jan 24, 2013 at 07:49

SJP sees new business soar 46% in run-up to RDR

St James’s Place (SJP) saw new business in the last quarter of 2012 rise by 46%, from £152.8 million in 2011 to £223.8 million, on an APE basis.

Adviser numbers at the tied network also increased by 8.4% to 1,788.

In the last three months of 2012 new investment business increased 54% to £109.1 million, compared to £71 million in 2011, while new pensions business was up 41% from £75.9 million in the equivalent period last year to £107 million in 2012.

The firm’s funds under management grew to £34.8 billion, up 22% over the year.

SJP chief executive David Bellamy (pictured) said: ‘Whilst market conditions remained challenging for much of 2012, we were pleased to attract £5.9 billion of new investments during the year. This, together with the continued 95% retention of existing client funds and positive investment returns, saw assets under management rise to an all-time high of £34.8 billion.

'We enter the year well positioned for the new retail distribution review (RDR) environment. Recruitment activity remains buoyant and we have good momentum across all aspects of the business as we continue to develop our investment proposition and enhance the service we provide to our clients.'

Earlier this month SJP were tipped by analysts at Investec as one of the firms best placed to benefit from the  RDR.

The analysts note said: ‘On balance, the upheaval in the UK life industry that the RDR is likely to induce should largely bypass the company.

‘The focus on a mass affluent customer base should significantly insulate the company from the difficult economy while having an in-house sales force should mean minimal RDR disruption.'

36 comments so far. Why not have your say?

Anitaki

Jan 24, 2013 at 08:03

Can l have a free advert too?

P S, Don't you have any other photos?

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Arthur Schopenhauer

Jan 24, 2013 at 08:13

If a company is exempt from RDR and pays on the old system and the public don't understand the concept of independent then of course you are going to have distortions like this A tribute to the genius of Weinberg and Wilson ( who was an adviser on insurance affairs to the Secretary of State for Trade and Industry in 1990)

This is clear evidence of the dysfunctional rule system an shows that it just does not work. The IFA community is no community at all it has no voice and no power so it will be abused.

All animals are equal.....etc

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The Patriot

Jan 24, 2013 at 08:17

My word - those figures look terrible. I wonder which other FS business has posted similar growth! Looks like the public really do care about whether their adviser is "restricted" or "independent"

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Simon Field

Jan 24, 2013 at 08:24

No, you can't have a free advert....and regretably we can't manage 1788 people in a group shot, but if we could, you would probably see a load of your buddies!

The Founding Patners remain eternally grateful for the IFA community seeing the light (and the writing on the wall) because they have helped push the share price up to near record levels. So...a very big "thank you" from us all.

But don't be shy guys.....we are not nearly as bad as some comments on this forum believe. Clearly, clients like us and it is a very broad church of independently-minded individuals who are allowed unfettered access to operate and grow thier businesses within the rules that bind us.

Am am reliably informed that we have moved from "recruitment" to "selection" and our induction team is burning the midnight oil processing applications.

That's not insider knowledge.....just common-sense....when you think about it?

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RichardR

Jan 24, 2013 at 08:32

I don't know, it doesn't matter where I churn these days, I can't get away from SJP

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Gillian Cardy

Jan 24, 2013 at 08:33

Oh me oh my - Citywire stops calling them an "upmarket sales force" and what do they get - criticism of the library photo ... ;-)

And I note that the "mass affluent" are now in the frame ...

The question I continue to ask (and never get an answer - perhaps Simon can help me here) if that if the investment process and the products are so great for clients why not allow us poor dillusioned Independent advisers access to them so that we too can bring our clients the benefit of all that collective wisdom ... after all, then your poor recruitment / selection and induction teams might not have to work so hard and you would still get the new business on the books ... which is after all where the real money is made ...

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The Cynical Partnership

Jan 24, 2013 at 08:39

So SJP flogged shedloads more product whilst commission was still available and especially just before RDR came into effect - no surprise there then.

Now punters will have a 4.5% "fee" paid to an adviser from their investment rather than 4.5% commission and it'll all be spun in the same way it always has been

In small print at the bottom : (The term Cynical Partnership is a marketing term for me and more fool you if you think it actually means what it says)

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Smithling via mobile

Jan 24, 2013 at 08:48

I say good luck to them. The product and advice is crap of course but so what. Subprime lenders and other FS firms have a weak product, doesn't mean there's no place for them in the market.

Besides, SJP are good at getting clients away from high street banks which is a good thing for IFA's. I don't have time to explain to bank clients why tied advice is pants but SJP do and then they bring those clients out into the "proper" market for IFA's to get hold of using SJP's explanation (and a little more clarity).

It's a win win for the community as far as I'm concerned. If an IFA is losing business to SJP then they really need to question whether they're in the right job. It should be one way traffic for everybody, so congrats and good luck SJP.

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Anitaki

Jan 24, 2013 at 08:49

@ Simon

So when "independence" is claimed, it is true as it means "independently-minded".

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John Burchett

Jan 24, 2013 at 09:04

No explanation necessary as to why their last quarter was so productive. It will interesting to Q1 figures.

It would be rewarding to think that the FSA would investigate the sales practices of the SJP advisers to ensure that the clients were not misled on charges and commission.

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Ethics

Jan 24, 2013 at 09:05

A successful IFA spoke to me recently about being recruited to SJP, the recruitment manager told him that he could switch and replace all £60 million funds he had under management as they have a robust replacement process for investments and pension transfers. That's @ 3 % initial 'fee' and 0.5% renewal 'fee' and he was told about the money he would get when he sold the business, something like 2 times renewal plus 25% goodwill. I asked this person if he thought it was ethical to churn all existing policies, he said when clients trust you they will do anything you suggest. No wonder SJP new business figures are up, they recruit IFAS and offer a proposition that is so attractive. If we are a profession we need to be professionally ethical and that means walking away from unethical behaviour. Hard to do when there are SJP recruitment managers on the prowl. SJP new figure will have to stop at some time when the recruitment stops or we are all SJP advisers, now there's a level playing field!!!!

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david mann

Jan 24, 2013 at 09:16

So that what's happens when the sales managers say to the salesmen "Fill yer boots lads, the gravy train may be about to come off the rails when we stop using smoke and mirrors to confuse clients"

SJP have announced their RDR charge model as an explicit 5% i/c and 2.3% per annum.

Any decent IFA will clean up and I suspect they will be stop 'selecting' and back to aggressive recruitment of gullible fools on the promise of a pay-out down the road.

Check their numbers q 4 2013 versus q 4 2012 - I suspect some changes...

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Keith Cobby

Jan 24, 2013 at 09:19

SJP have put out today's press release and they get a lot of free publicity on Citywire. I have recently seen their current marketing letter with its offer of a 'free' lunch and not so free churn!

The FSA lets them and Towry (lets give them a mention too) and others do this so good luck to them. If their clients don't like it they can walk.

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Arthur Schopenhauer

Jan 24, 2013 at 09:20

Time to stop getting these

Fellow IFA's admit it we have been outsmarted

While we try to help the FSA produce coherent rules SJP have just got on with taking advantage of the absurdity we now have

SJP have laughed all the way to the bank

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Philip Wise

Jan 24, 2013 at 09:28

Of course, it would have taken two minutes to look at SJP's results and see the implied surrender rate of 4.9%, and commented on that.

But what the hell, why not just reprint the press release and go and get a coffee instead.

Citywire used to have some journalists a few years ago. I wonder who they are working for now?

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Christopher Petrie

Jan 24, 2013 at 09:38

Oh come on, there's plenty of business for everyone. SJP are pushy and expensive, but they have compliance procedures and haven't dumped a whole bunch of Arch Cru, Keydata etc etc liabilities on us via the FSCS, like some other firms (including IFAs) have done.

SJP were telling their salesmen to get the business in prior to 31 December, and to leave the investments alone so that trail commission could continue ad infinitum! However, all new stuff will of course have to have explicit annual fees deducted and shown for the ongoing service - it seems to me an IFA will be able to pick that point up with a potential new client with an SJP plan and show the client what they could do for a similar fee.

On that point - will. SJP have to allow Advisor Charging facilities for IFAs who take over post 31 Dec SJP investments? At present that's not possible, but maybe they'll have to do it to try to keep the business on their books, albeit serviced by an IFA not an SJP salesman?

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Richard Anderson

Jan 24, 2013 at 09:52

I am absolutely astounded to see an organiation increase their new business figures by 46% with only an 8.4% increase in the number of 'advisers'. Surely they must all have gone on a very motivational course in the summertime! If the FSA do not investigate such a staggering rise in productivity I will be very disappointed (but not surprised). On the other hand if I was an SJP manager, rather than congratulating the people on their increased productivity I would be giving everyone a dressing-down for having been performing so badly previously!

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Will via mobile

Jan 24, 2013 at 09:52

And all the advice is guaranteed.

So sweet

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Kathy Booth

Jan 24, 2013 at 10:05

re John Burchett's comment - let's see Q1 figures and yes the ridiculous slant on these articles, why are we reading such rubbish?

I have to say, I am sure that they are not the only advisers that churned the cream last year!

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Simon Kershaw

Jan 24, 2013 at 10:19

@Christopher Petrie

More than a few IFA firms which mis sold Cru, Integrity, Keydata etc have folded and the constituent parts emerged all spruced up at SJP. We of course pick up the bill via the FSCS.

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Dave

Jan 24, 2013 at 10:21

Clearly they are doing something (probably a lot of things) right. £34.8bn under management isn't to be sniffed at. The 0.8% alone is many times more than most IFA's business come anywhere near. And if they do offer clients a nice lunch and a slick presentation and a well dressed sales person / adviser who puts them at ease, then is that such a bad thing if it makes the client comfortable with what they are doing.

Will they get the best performance available on the market? probably not, but there are a hell of a lot of IFA firms out there who don't come anywhere near them in terms of fund research.

An interesting question would be, if you were to look at the financial advice market in the UK and do some real due diligence, which adviser would you place your money with. Personally, I would want to go with somebody who was guaranteed to be there in a good number of years time and wasn't going to go bust and mean I had to apply to the FSCS. Would you chose a one man band IFA working out of their bedroom office, who spends a lot of time stating on comments sections that regulatory costs are going to put him out of business, or a firm with £34.8 bn under management who have got the cash and desire to give you a big corporate cuddle in a nice hotel along with lunch with some like minded people?

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Des Rushworth

Jan 24, 2013 at 10:29

What a surprise, that people are surprised at the figures. Only yesterday I spoke to a client who has been advised to transfer his pension benefits from a platform with a total ongoing charge of 1.9%, including our income for ongoing servicing to SJP on the basis it would be free to transfer and cheaper going forward. He made net 8.6% last 12 months, He also recommended that he cancel a CI policy as the option they offered was better, rely. I suggested that he got it all in writing. The regulator needs to catch up.

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alan from perth

Jan 24, 2013 at 10:40

re Ms Booths comments I deliberately took sounding from others in the industry at the end of last year with "their ear to the ground" and I echo your comments. The mad rush to position them selves prior to RDR from 7% plus nil to 3 plus 0.5 was embarassing. As an IFA I personally have no time for the back slapping sanctimonius claptrap that comes from SJP and I dont go round worrying about them as this involves negative energy. However its time some of our fellow IIFA's woke up to the fact that you are not all "whiter than white" and their mad dash to churn policies prior to RDR was bordering on fraud. Most of us do a great job, often doing far more for clients than would normally be expected and miles ahead of banks etc. However you only have to attend seminars to hear comments such as "I dont deal with clients with less than assets of £100k" or my minimum fee is £150 per hour/ /£ 650 minimum to arrange an ISA. Get a life lads and be the professionals you claim to be, your are dealing with folks livelihoods and with that comes reponsibilities

One final point- I dearly wish the FSA would analyse figs such as above and address any miss-selling rather than this tick box culture which seems to pervade

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David Curley Dip extrodinaire

Jan 24, 2013 at 10:48

Was this just because a lot of the salesmen were milking the business before they were stopped from working because they will not be level 4

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Chapman

Jan 24, 2013 at 10:53

I would be interested to know how many SJP advisers intend to retire in the next few years bearing in mind the reason most may have joined wuld be due their incentives/promises to purchase retiring advisers clients.

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Bob Donaldson

Jan 24, 2013 at 11:08

And the winner of this years RDR Award is SJP and all the other sale forces that will now spring up in abudance once again having been decimated int he 1980s.

Just what the FSA want. Independent advice on a strict fee paying basis with the major distribution channel being the sales forces of the banks, L& G and suchlike. Much Much easier to control it all.

The loser is the public?

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Arthur Schopenhauer

Jan 24, 2013 at 11:20

This column reminds me of the nautical term "pissing into the wind".

Relief when you do it but a mess when you look what you did

Grow up SJP play the rules better than the IFA's and guess what when they do get the complaint (like @Des) I bet they are called IFA's

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The Patriot

Jan 24, 2013 at 11:25

Agree with @TrevorGarson IFA - the comments are embarrassing.

Spend less time moaning on Citywire. If SJP's products are so poor and their performance "crap" (thank you @Smithling)- sad indictment of those who cannot write so much more business when up against such poor products.

They are successful - get over it. I see why everyone hates Manchester United and other people who are successful, because they have advantages others don't.........

I have no preference either way - SJP or IFA, but if you can't beat them (with your superior products and service).......you know the rest of the phrase.

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RP

Jan 24, 2013 at 12:05

SJP do more churning than Lurpak!! Interesting to see how they fare now in the RDR world

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Philip Wise

Jan 24, 2013 at 12:14

So nobody noticed that their investment premiums went down then.

Big rise was in pension and protection premiums. I'm sure that most of us can work out why protection premiums increased, but they have clearly been having success selling pensions - singles and regulars.

You need to read four pages of big text to find that out..I guess that is too much to expect a journalist to read!

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Hickky

Jan 24, 2013 at 12:55

I guess all this only shows that the leaders of the most profitable firms can shout the loudest, probably because their profits eminate from high charges to their clients.

5% +2.2% annual seems to me to be on the steep side. If the archetects of RDR only thought about things in greater depth, allowed commissions but at a maximum rate of 4% + 0.75% ( too allow for complex cases), most of the high charging firms would have to cut their costs, to the benefit of clients. Perhaps the new FCA will look at this, who knows!

Mind you, the advisers get 3% + 1.5% and a lot of their costs are paid by SJP from their cut. Seems like a good proposition for any IFA who doesn't have ethical issues about churning!

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sol trader

Jan 24, 2013 at 17:06

I would never want to be seen defending SJP but have just checked my own new business commissions for oct/nov/dec 2012 compared to the same period in 2011. They "soared" by 45% - I admit this is lower than SJP but currently, I don't advertise, don't hold seminars or do "marketing" to speak of and certainly don't provide finger food for clients. maybe it's just a sign of the times.

A slightly different approach to this article might be - if the mass affluent are piling in, do we need to start worrying about bubbles?

As a post script - have also had more personal insurances and mortgage enquiries since the beginning of 2013 than the whole of the last 2/3 years. Again, this hasn't been deliberately sought out but is part of the ebb and flow of business

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jim via mobile

Jan 24, 2013 at 21:39

Amazing job SJP. Main reason for massive increase on AUM recently was their recruitment drive 2011\ 2012 targeting Bank Advisers and effectively coaching and encouraging them to persuade their old customers to move investments, pensions and protection.

Great way to quickly build up revenues but unfortunately its usually the Advisers that sink as they can't bring enough new business once the churning has dried up

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Churn via mobile

Jan 24, 2013 at 22:51

Churn churn churn goes the bus

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Mark Ashton via mobile

Jan 27, 2013 at 14:39

So SJP have a business model with appeal. It doesn't appeal to me and my clients. If we lose clients to SJP then i need to pay more attention to my business and the service we offer.

Other businesses are only a threat to weak businesses?

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Paul B via mobile

Jan 27, 2013 at 21:31

Churn churn churn away as usual with SJP and take your clients for as much as you can ! Lets see what happens to the marketing and whether they still hide their status post RDR and explain to their clients what restricted actually means? What's the betting they don't?

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