In spite of setting aside a reported £430m in order to cover costs of financial redress to clients who have been subject to overcharging, St James’s Place (SJP) has bounced back with a healthy profit, even after a tricky year juggling changes to how it charges clients and the possibility of paying out compensation.
The big-name FTSE 100 company made £398.4 million in profit after tax for the year ending 31 December 2024. That’s a massive leap from the £9.9 million loss it posted back in 2023.
In its yearly update, SJP shared that its cash flow jumped by 14% compared to the year before, despite the expenses tied to rolling out a new, simpler way of charging clients. They’re planning to have this fully in place later in 2024, and reckon it’ll cost about £160 million all told.
Some believe that the changes to SJP’s long standing fee structure which awarded advisers for moving clients onto the SJP platform are only being implemented due to rising level of complaints and liabilities.
Looking ahead, SJP warned that profits might take a bit of a hit in 2025 and 2026 while they switch things over to the new fee structure, however it may also be that they expect the full impact of the claims they have received to be realised within this period.
Beyond that, SJP brought in £18.4 billion in new business and now looks after more than a million clients. They’ve also been digging into past promises about ongoing services, setting up ways to check everything properly and spot where they might’ve fallen short.
Whilst ongoing servicing may be an issue, SJP confirmed that are aiming to trim £100 million a year from their everyday costs by 2027 as part of a push to tighten things up.
The CEO at SJP confirmed they were investigating the implementation of AI to help their advisers with paperwork and tricky questions and to save them time whilst their investment team is looking into launching passive funds as part of their investment offering.
Our Thoughts
We have always maintained that St James’s Place (like all financial adviser firms) has good advisers, bad advisers and those that sit in-between.
The fundamental issue for consumers when dealing with SJP is that that they are not an independent financial adviser and therefore their advice centres around promoting their own platform and investments. This may be suitable for you if you are starting out however often SJP advisers have moved people form perfectly good investment and pension arrangements to their platform, to the client’s detriment as their fees is often higher and the returns historically have often been in the lower quartile of fund performance. The impact of this can be tens of thousands of pounds in losses.
Add on top of that, that often the ongoing services people were paying for have not been delivered and it soon adds up. We have to date had individual client complaints upheld between £150 and £18,000.
If you were convinced to transfer your existing pension, ISA or investments to SJP OR if you are a client of SJP who has not received at least annual visits from your financial adviser, we would urge you to make a complaint or if you do not have the time, inclination or confidence to do it yourself, why not book a free consultation with one of our team to talk about our no win no fee service today.
