How do you judge the value of financial advice?
It is a question that came up again and again during the recent Sunday Times investigation in to St James’s Place, which led to the company overhauling its so-called ‘cufflinks and cruises’ adviser perks.
How you assess value and quality is a good question because it is one of those things you can never truly judge until the end of your journey.
It is only when you retire that you can really say whether the returns, and the lifestyle, you have achieved matched up with what you paid and the expectations you began with.
For clients searching for an adviser, this means they have to make a few gut judgements about the adviser.
They, of course, have to look at the fees and the qualifications, and they may have also taken a recommendation from a friend.
But they are also going to look at more superficial things, such as what an adviser’s office looks like, and what they make of the adviser’s appearance.
This is, after all, someone who they are trusting their money to. Of course, image is what SJP seems to play on more than anything else.
But transparency is crucial too, which is why I always plead with advisers to put their charges on their website.
And this is why I was never really happy with the SJP business model and have always felt that it was important to know what was going on behind the scenes at the company.
I have never been comfortable with the culture and clarity.
Its perks were a relic of a bygone era. Financial advisers should be prudent, analytical and pragmatic.
That was not the image being portrayed by the SJP annual jollies all paid for by profits made from customers, who largely did not know they were paying for them.
Then there are the fees.
They look high: a £1m investment can cost a client £1m in charges over 20 years. But not only that, they sit awkwardly.
For example, I have still not had it explained to me how SJP can justify charging an early withdrawal charge on a pension when exit penalties are banned by the Financial Conduct Authority.
I have also never liked that SJP is not whole-of-market.
Its fund range may boast of being run by world-leading managers, but the returns across many are thoroughly mediocre. Do clients know what they are missing out on?
Advisers should learn a lesson from SJP. Transparency and openness should be at the heart of any business.
I have always wanted them to axe the perks and cut the fees. We have got half of that.