St James’s Place boss hits back at charging criticism

St James’s Place boss hits back at charging criticism

The chief executive of St James’s Place has struck back at questions about its pricing structure, arguing there is “confusion” over the way the market looks at its charges.

The FTSE 100 wealth management firm has come under fire for its charging structure for a number of years, as advisers and industry figures questioned whether its pricing complies with remuneration rules which came into force in the wake of the Retail Distribution Review.

However, St James’s Place has always firmly denied this, and in 2014 the director for development and technical consultancy Tony Mudd pointed out the regulator had sanctioned the company’s “unique” pricing structure.

During an investor conference, which was held after the release of the company’s half-year results, analyst at UBS asked whether SJP had seen any increasing challenges or regulatory scrutiny about “justifying” its pricing structure.

He pointed specifically to the “charging differential” between an SJP pension and an open-market pension.

Responding to the question, chief executive David Bellamy defended its pricing structure, stating its pension charges are “competitive”.

He said: “There is some confusion in terms of the way the market looks at charges. We are an integrated business, and we get better rates than most will in terms of managing clients’ money.

“You might get another large company which charges 60bps for the fund management part, and that’s compared to 120bps or 130bps with us.

“But we are not comparing like-with-like, because to get access to that 60bps, you have to go on a platform, and if you’re dealing with an adviser, then you’ll find the adviser charges have typically gone up over the past few years,” Mr Bellamy continued.

“Nowadays, the annual run-rate for ongoing advice is 75bps to 100bps, and for St James’s Place the maximum is 50bps. So if you put all the charges together from the outside world and compare them to St James’s Place, you will see very similar and competitive rates.”

St James’s Place saw its profits slip in the first half of this year after being slapped with a £17m levy from the Financial Services Compensation Scheme.