It is UK wealth management firm St. James’s Place that has unveiled an initial preview of its much-awaited tiered charging model for financial advice to its partners.
This includes fee reforms that the company, last October, announced to be revamped post the new consumer duty set to take effect. Fee reforms – The company is going to introduce the reforms in the latter half of 2025. The company has agreed to do away with exit fees and reduce some charges on the products. It has also agreed to put different charges on various services in a manner that they do not add up to confuse the customer.
Indeed, the tentative details of the new fee structure for advice will be made public, according to a presentation that HT Legal has seen (see table below).
Future of SJP Advice Fees
| Case Size | Initial Advice Charge (IAC) | Initial Advice Fee (IAF) |
| First £250,000 | 3% | 2% |
| Next £250,000 | 2% | 1.33% |
| Amount over £500,000 | 1% | 0.66% |
Example:
For a £300,000 case, the initial advice charge (IAC) will be calculated as follows:
- 3% on the first £250,000
- 2% on the remaining £50,000
This results in a total IAC of £7,500 + £1,000 = £8,500 (2.83%).
The partner’s initial advice fee, however, will amount to £5,830, or 1.94%.
How the New Fee Structure Works
Under the new model, clients will pay tiered fee that is based to the size of their investment. The combined total sum that will be invested will generate an initial advice charge under which part, known as the initial advice fee, is payable to the partner.
According to an SJP spokesperson, the company has been working closely with its advisers as part of preparations for the new fee system that is to be launched.
“Last October, we said we would harmonise our fee structure and make them clear and comparable in particular across different tiers of initial advice and recurring product charges,” said the spokesperson. “We have been working with our partners on all of these details; as we finalise them, we will keep them up to speed so that full implementation will occur during the second half of 2025.”
SJP’s Third-Quarter Update
The third quarter update by SJP did report news of a fall in net client inflows while its chief executive, Mark FitzPatrick identified uncertainty over the Budget as a factor that had affected the investing mindset among some clients.
Despite a strong start, SJP’s shares had slipped as much as 2.5% earlier, but recovered well above 1%, as the company steadily regains lost ground from last year’s sharp fall after introducing a new fee structure.
HT Legal’s (Claim My Loss) analysis
St James’s Place (SJP) have put in place a tiered advice fee 2025 which is a common model adopted by many other firms long before now.
Paying £10,500 initial advice fee on a £400,000 investment onto their platform is not excessive however it’s still as expected on the higher side of what financial advisers in general charge. Many advisers wold only charge 1% considered in that £4,000 is more than enough to justify their work, many would even charge zero initial fee, particularly when they are likely to be collecting annual management charges (Usually around £2,000 per annum at 0.5%) for the foreseeable future.
It also appears that SJP will be taking almost a third of the initial fees which could lead to many SJP advisers looking for a new home for their clients.
The demands of consumer duties mean that SJP has increased their maximum ongoing advice fee from 0.5% to 0.8%. This may seem controversial given the scandal surrounding SJP in relation to overcharging however many Independent Financial Advisers have been forced to increase the fees on clients with smaller portfolios in order to justify the level of work the regulator is now demanding they carry out on an annual basis.
The new structure is leaning towards attracting higher value clients, however the BIG QUESTION is whether SJP advisers will choose to remain at SJP when they will not longer be receiving up front commissions for winning new business.
In our view, SJP have been content to be more expensive and rely on attracting advisers who want an easy way to make money quickly. No other firm could compete with the SJP model however now with:
– the lack of up front commissions to fund their advisers marketing and cashflow
– the fact that they will now be taking almost a third of the fees when other networks charge 10-15%.
– the fact that the SJP name is now tarnished making it difficult to win new business
We think that the some of the 4,582 advisers at SJP may be looking for a new home like True Potential or one of the Independent Networks and when they do, we wouldn’t be surprised if some of their clients end up making enquires with us about recovering the money they have lost due to fees and poor overall performance, especially those who transferred in from other pension schemes.
Have you found yourself with Pensions or investments from St. James’s Place wither now or in the past?
If you were convinced to transfer your pensions to St. James’s Place or you had ISAs or an investment portfolio, we can investigate whether you may be due financial redress from St. James’s Place.
Claiming against SJP is not just about getting fees refunded, we firmly believe that you should be fully rewarded for any financial repercussions you have suffered as a result of coming into contact with SJP.
Once we have established the grounds for claim and the value of your claim we pursue the matter with SJP, through the financial ombudsman and if required, as regulated solicitors we will pursue the matter through legal channels,
We are experts in SJP claims, and many individuals have already successfully recovered their money with our assistance, start your claim today.
