SJP hit by falling share price after launching fee review

St James's Place, one of the UK’s largest wealth managers and a significant SIPP adviser, suffered a 21% fall in its share price at one point today after announcing a review of its much-criticised fees and charges. The potential of an overhaul of SJP's fees rattled investors in the company today, with a concern that lower fees may mean lower profits. At the close today (Friday 13 October) the company's share price had fallen by just over 18.5% to 667.08p after a modest late rally, one of the biggest one day falls seen by the Cirencester-based firm. The share price is down over 40% this year. The company - which has more than 4,700 financial advisers and is a significant SIPP adviser - confirmed earlier today that an “evaluation” of its fees and charges was under way. A simpler and more 'scalable' fee strategy may be on the cards however there is no commitment yet to change any fees. There has been media speculation recently that, following the introduction of the FCA's new Consumer Duty rules in July, SJP fees, particularly exit fees, were being reviewed. The company has faced criticism in recent years that its advice and investment fees were too high and too opaque although recent research has found that the company is often only ‘mid-table’ in terms of fees and charges compared to similar providers. In a statement today the company said: “St James's Place notes recent media speculation regarding its fees and charges structures for clients. "As disclosed in our Half-Year Report & Accounts published on 27 July 2023, we continue to build on the work completed for Consumer Duty. This programme includes an assessment of our fees and charging models to ensure we operate with a simple and scalable charging platform for the long term. "Whilst the evaluation has not yet been completed and therefore no decision has been made, we are confident that all the options under consideration will ensure value for clients and a strong, secure, and sustainable business for all stakeholders. We naturally continue to engage with all of our primary regulators during this process. We will update the market as any decisions are made.” Speculation has suggested that the FCA is putting pressure on SJP over fees although the company has not commented on this. The company has seen its usually strong new business growth dented recently. In July SJP announced a fall in profits of 29% for H1 2023. IFRS profit after tax for the half was £161.7m (H1 2022: £208.2m), according to interim figures. Net inflows dropped 38% to £3.4bn at St James’s Place for the first half of 2023 (H1 2022: £5.5bn). Gross inflows for the wealth manager fell 12% to £8bn (H1 2022: £9.1bn) as new business slowed. However, group funds under management rose during the half year to £157.5bn (31 December 2022: £148.4bn). During the half year the wealth manager also saw an increase in adviser numbers, with 73 new advisers joining, pushing the total to 4,766. This month St James’s Place (SJP) recruited former Prudential boss Mark FitzPatrick to be its next CEO. He took up his new role as chief executive officer designate on 1 October, replacing CEO Andrew Croft. After a period as CEO designate, he will fully take over the role from current CEO Andrew Croft on 1 December, subject to regulatory approval.

SJP hit by falling share price after launching fee review

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