Quote from VATcal on 17/03/2024, 13:01

Britain's biggest wealth manager, St James's Place (SJP), is embroiled in a refund fiasco. The company has set aside a staggering £426 million to compensate clients who allegedly weren't given the wealth advice they paid for.

What went wrong?

• A surge in customer complaints in late 2023 prompted SJP to review its record-keeping practices.
• The review uncovered a significant number of clients who paid for annual reviews but, according to the company, there wasn't enough evidence to show they actually received them.
• These clients typically pay an annual fee of 0.5% of their invested assets for ongoing servicing, which can translate to hefty sums for clients with substantial investments.

Impact and Repercussions

• The news sent shockwaves through the financial sector. SJP's share price plummeted by almost a third, jeopardizing its position in the prestigious FTSE 100 index.
• This incident highlights concerns about potential mis-selling practices and the importance of transparent record-keeping in the wealth management industry.
• SJP has acknowledged the issue and assures it's a historical problem. They've invested in new technology to ensure proper record-keeping going forward.

What does this mean for clients?

• Up to 100,000 clients, representing roughly 10% of SJP's customer base, could be eligible for refunds.
• The company is currently reviewing records from 2018 onwards to identify affected clients.
• Clients who haven't received the promised service can expect to receive a refund for the unprovided annual reviews.

Looking ahead

• The Financial Conduct Authority (FCA) might launch an investigation into the matter.
• This incident is likely to tarnish SJP's reputation and could lead to stricter regulations for the wealth management sector.

Client takeaway:

• If you're an SJP client and suspect you haven't received the services you paid for, it's wise to contact the company directly to inquire about potential compensation.
• Keep copies of all documents related to your wealth management services for future reference.