Multiple hourly charges for advice could be as “complicated” for consumers to understand as energy bills, the marketing director of St James’s Place has claimed.
Tony Dunk said it would be more “helpful” if the total cost of advice was disclosed in one figure from the outset, as SJP does, rather than as individual costs for separate components of the advice process.
He said: “The trouble is that with fragmentation across the sector post-RDR you’re not comparing like with like. Consumers could be having the same problems understanding the value of advice as they have with energy or mobile phone bills.
“You have separate individual costs, compared with one charge that covers the investment approach, back-office support and all the other factors involved. In the general market the IFA is providing advice for an hourly fee but the complication arises when you have three major charges for the advice, platform and fund management.”
Earlier this year some advisers raised questions over the SJP pricing model post-Retail Distribution Review amid claims that it does not appear to have significantly changed since the new rules came into force and remains to some degree ‘bundled’.
A spokesperson for SJP responded at the time: “St James’s Place is a vertically integrated business, meaning we offer clients a fully integrated service comprising both individual and bespoke advice and our approach to investment management.
“The cost of our advice along with the other costs of doing business, such as the costs of our services and those of our fund managers, are included in the charges clients pay and is not an additional amount.”
Mr Dunk also said St James’s charges were “entirely clear”, covering the entire advice process, and sit in the middle of the adviser charging spectrum.
Mr Dunk added that he expected a quarter of new recruits to come from the St James’s Place Academy in time.
Mr Dunk said the first group of students on the training programme would graduate next year and bring fresh blood into the industry.
St James’s flagship training operation, the Women’s Initiative, was launched last week and is open to women from all career backgrounds. Adrian Batchelor, director of the academy, said there was “no justification” for the wealth management industry’s to be dominated by men.
| Background |
Last month St James’s announced a 39 per cent increase in operating profits since RDR. The number of partnerships was 1905, up 6.5 per cent on 2011, according to the interim figures. New business up 21 per cent on an annual premium basis to £426.5m Commenting on the publication of the firm’s half-year results, which were released on 31 July, Mr Dunk said the firm expected recruitment levels, partly fuelled by the demise of bancassurance, to return to “more normal” levels by the end of the year. |
