Altus principal consultant Simon Bussy backs this view up.
He says: “Many SJP clients are long-standing – the relationship they have with their partners goes back years. That trusted relationship is worth more to the client than a debate about charges when they need help and advice, not least post Pension Freedoms.
“SJP partners justify their fees just as IFAs justify theirs; while price is important to people, value is more so. While the press and a relatively small number of independent advisers love to ‘bash’ SJP, they report that their annual client questionnaire indicates 82% rated SJP value for money as ‘good’ or ‘excellent’, and 97% said they would recommend SJP to others.”
Many cite the business acumen within the firm. Hargreaves Lansdown’s research director Mark Dampier says: “They have a big moat, they have carried on buying more floor space. That space will run out at some stage, but it means it’s hard for someone else. Also they have big brains behind the business. Most IFAs may be good with clients but not running a business with big ambitions.”
Financial rewards
Others cite SJP’s willingness to pay compensation as key. The firm has always made a virtue of its deep pockets in contrast to smaller advisers.
Another business consultant, speaking off the record, says: “The reason they are successful is not that they are a sly marketing machine and they dupe people. It is because their clients are happy with what they receive.
“Most intermediaries fail to understand that most of the business stays full term, so you have to judge the charges over the full term. The performance stacks up compared with others, but the thing that really makes it, is that if there is a complaint, even if it is doesn’t get to FOS, it is underwritten by SJP and they demonstrably pay.”
To sum up, it is clear the business has many major strengths, while for now rival IFAs do not provide a coherent national challenge though they may win business locally.
Head start
It has a significant start on other restricted/vertical advice businesses while provider owned and run restricted models are still in their relative infancy, though it is always possible a major push may come in future.
The digital advice and digital wealth management sector may have an impact too.
Bussy adds: “It will be interesting to see how they evolve their business model to reflect the increasingly digital world we now live in, particularly as digital (‘robo’) advice ‘comes of age’ once the banks and other big brands re-enter the advice market and the propositions become more mature and sophisticated.”
Finally, there will be an increasing emphasis on charges and disclosure with Mifid II, the asset management review and the platform paper, but of course SJP has always adapted successfully to regulation to date.
So for now, and although its bosses cannot enjoy the regular nasty headlines, the SJP behemoth appears largely untroubled for now.
