James ConeyJul 31 2019

SJP charges still shock advice industry

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A couple of weeks ago the Sunday Times prodded this hornet nest when we published a story about an ombudsman case it had lost.

To accompany the piece we ran a separate story using research commissioned from Candid Money, showing how over 20 years £1m invested would rake in almost £1m of fees for SJP.

No company is more divisive than SJP, not even Hargreaves Lansdown

Independent advisers of course know all this, but hearing it said again makes it no less startling.

No company is more divisive than SJP, not even Hargreaves Lansdown.

In fact, if you write a hard-hitting story about other companies in the sector, you will always get a few comments from people who say: “What about SJP?” There are some real haters out there.

I think it is worth saying that some clients will race to its defence when you write about the company – and you cannot say that about many companies.

I have had a handful of these emails recently from those gushing about service (by the way, I can spot an SJP adviser in disguise as a ‘genuine’ customer from a mile off, they write in a way no real person ever would).

But this is by far outweighed by people who have a grumble about the company.

Now, I will discount exceptional complaints, because by far the most consistent theme with SJP is surprise over charges. Frankly, it is never right if an adviser’s fees come as a shock.

A particular gripe is the 6 per cent early redemption charge from its investments.

Now I can understand a company wanting to promote long-term investing – but the fund performance and quality of advice should do this for you.

They are your greatest asset in encouraging loyal customers.

The particularly toxic element of the 6 per cent charge is that it seems to reset every time someone makes a new investment – meaning anyone who tops up their pension will be caught out by it or locked in.

I know many advisers who stake their reputation on having clear and upfront charges that are easy to understand.

I do not know how the Financial Conduct Authority can possibly allow some of these charges.

The 6 per cent redemption charge is certainly no better than the exit fees it has already investigated on fund platforms that restrict competition – if anything it was worse.

Then again, I do not know how the FCA has allowed the advice fee that SJP takes from its investments anyway. If it walks like trail commission, it does not matter what you call it.

Agreeable clients

Thank you to all those advisers who emailed and got in contact over Twitter after I wrote a fortnight ago about serving customers with fewer assets.

What is clear is that many of you feel very strongly about the role the advice community can play here: and there were lots of suggestions about how to find a way forward.

I particularly like that of one adviser who told me the only restriction he places on clients is that he will not serve anyone that is rude or dislikeable.

It does not matter how much money they have, he claimed to help if they were an agreeable sort.

I like this kind of business principle. If you are a small business owner and profitable, it should be your right to only deal with those customers who you want to help. 

And I suspect it is a good way of limiting complaints from the type of client who may never be happy – and we all know a few of those.

It is just a shame we cannot implement the same principle in journalism.

Money trees

Scour the summer press and you will see dozens of stories calling for reform of childcare and social care.

Without a doubt, the regulations behind both are a mess.

Both also will be on the radar of the new government.

But the question is, what can be done? Both require billions in investment.

No minister has ever been unpopular for handing out tax breaks – but unless I am mistaken, no minister has yet found the seed for the magic money tree.

James Coney is money editor of the Sunday Times