Although the 69-page report, published today (July 14), claims SJP’s fund range, charges and quality of service delivered ‘value’ for its customers, the national wealth manager raised concerns about more than half of the funds within its range.
Of its 39-strong fund repertoire, 17 were placed on ‘amber’ and a further five on a more serious watchlist.
SJP said it had found “areas which challenge whether overall value is being delivered” in regards to the funds on the watchlist, saying specific actions were planned or may have already been taken for such portfolios.
Those on the watchlist — the Equity Income, Investment Grade Corporate Bond, Multi Asset, UK & General Progressive and UK Growth funds — have been placed under a “heightened level of monitoring” to determine whether further action, such as a change in strategy or manager, was needed to improve performance.
The Equity Income fund, managed by RWC, had failed to achieve its stated objective of capital growth or the required level of income over the past five years, while Loomis Sayles’ corporate bond fund had underperformed both its benchmark and sector over the period.
Invesco, Payden & Rygel and Schroders, who manage the Multi-Asset fund, had performed ‘in line’ with the wider market but had not achieved the fund’s objective capital growth.
UK & General Progressive and UK Growth, both managed by Majedie, had underperformed their benchmarks.
A further 17 funds were given an ‘amber’ rating. SJP said this meant the funds had ultimately delivered value for clients but there were specific areas for “closer ongoing monitoring”.
Amber-rated funds were mainly in the balanced managed, strategic managed, global and property sectors.
How SJP fared as a whole
SJP included areas such as financial planning and ongoing advice, administration and client services within its assessment of value.
It said: “We believe that not only do our funds and services meet all regulatory requirements, but they also offer clients a range of high-quality options to help meet their financial goals.”
In terms of charges, SJP declared its fees were “appropriate in the context of the value they provide to investors”.
It also explained its charges differed from many other funds, as the portfolios were part of a broader financial planning process. This meant the ongoing charges figure was made up of a number of different elements.
But overall, SJP claimed it compared favourably with similar portfolios of funds and that its fund charges provided overall value when the full range of services were taken into account.
Why SJP assessed its value for money
As part of the Financial Conduct Authority’s asset management review, fund houses are now required to carry out an annual assessment of whether the firm provides value for their clients.
The value rules — which have been in effect since the start of 2020 — require asset managers to look at their performance, costs, economies of scale, comparable market rates, services and share classes.
The mandated reports have already triggered Artemis, M&G and Aviva Investors to make changes to their fund ranges and charges.
Similarly to SJP, others such as Vanguard and Hargreaves Lansdown have insisted their funds deliver good value.
imogen.tew@ft.com
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