A leaked call from the managing director of St James’s Place has highlighted that staff morale could be low as the wealth management giant repeatedly faces negative publicity.
UK newspaper The Sunday Times obtained audio of Ian Gascoigne responding to the latest bout of poor PR about the company, whereby a former employee revealed the lavish rewards those within the SJP stable could earn from reaching certain sales targets.
Of SJP’s 4,000 adviser, Gascoigne told the 700 who were logged in to the call that the annual trips on cruise ships in exotic locations could be scrapped, the Sunday Times reported.
“The leak indicates there is bad feeling amongst the staff,” CWC Research founder Clive Waller said.
“Recording and leaking a telephone call demands intent and planning.”
SJP cruises
The Sunday Times also revealed two cruises in Spain and Greece next year are still going ahead, despite partners of the firm being “desperate” for a cultural shift.
However, Gascoigne did acknowledge change was needed.
He said: “From cufflinks to cruises, it’s all in the melting pot. I personally struggle that no amount of workshops can justify a trip on a cruise ship. Let’s put our hands up: we should have addressed [this] several years ago.
“A free holiday in a five-star hotel is a pretty obvious incentive for some people, but is it appropriate in our business?”
But Waller questioned whether this would result in improved outcomes for investors.
He said: “SJP indicate that they will discontinue their ‘holidays’, but, at the same time say they will not improve client terms but reinvest the savings in other adviser benefits. I am not sure that will make anyone feel better other than overpaid advisers.”
Senior management takes note
The call at least shows SJP is “self aware”, according to Langcat consulting director Mike Barrett.
“I thought it was interesting they referred to a strategic review, although these things normally take several years to implement, especially for an organisation as large as SJP,” he added.
Likewise, Simon Bussy, director at Altus Consulting, said: “There is a recognition at senior level within SJP and amongst many of the partners that their business model and working practices are out-dated and need to evolve.
“This will drive internal change – people, propositions, processes, and most importantly, culture – which will be good for the customer, for employees, and in the longer term, for SJP as a business, too.”
Exit fees
In the phone call, Gascoigne was asked if the firm should review its early withdrawal penalty of up to 6% for moving pension or bond funds elsewhere, which he said was “constantly under review”.
“It is fair to say that there are some people in the regulator [the FCA], in the policy team, that think it’s really, really close to the edge in terms of RDR-compliant [financial services regulations], and I think they themselves would love us to ditch it.”
The FCA is currently consulting on exit fees as part of its investment platform market study, although it had initially suggested firms like SJP would not be included in any ban.
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