St James’s Place has slammed reports that its customers are paying significantly more to invest with fund managers who run cheaper but almost identical portfolios elsewhere.
British newspaper The Sunday Times reported on 22 September that “managers of 13 SJP funds also run less expensive versions of these products — sometimes with almost the same investments — available to all investors”.
A spokesperson for SJP said: “Numerous independent studies consistently show that access to quality ongoing advice makes a considerable difference to an individual’s future financial health and financial confidence, but the analysis seeks to downplay this using invalid data that compares the level of fees for advice once every five years versus the fees for ongoing advice from our partners every single year.
“As the basis of the analysis is fundamentally flawed this also impacts the performance story presented as the total costs of the other advice models, including ongoing advice and platform fees, are not being factored in properly and the different expected returns from the funds are ignored.
“Clearly, this is not a like-for-like comparison and is hugely misleading to the end client. As an industry, we need to stand up for the value quality ongoing advice is proven to deliver whether that is through an SJP partner, an IFA, or another quality advice route.”
Comparisons
The Sunday Times said that only one of the SJP-branded funds achieved higher returns compared with its non-SJP counterparts over five years, according to analysis by Morningstar.
The spokesperson for SJP added: “The St James’s Place investment approach is distinct and brings key benefits to clients.
“Access to the best managers around the globe – many unique to our clients and UK retail investors – real diversity across investment approaches; and institutional oversight and protection.
“We monitor the managers and their portfolios to ensure they maintain the agreed standards and can change managers at short notice if required without any charges, tax, or inconvenience to our clients.
“It is wholly inappropriate to compare the underlying SJP funds with seemingly similar funds run by the same fund managers, as the SJP funds are run to specific mandates that we control with important differences which allow us to improve diversification and manage risk more effectively for the benefit of our clients at the overall portfolio level.”
Bad publicity
SJP has come under a lot of criticism over the last few weeks.
Firstly, the firm received backlash after a former employee revealed the lavish rewards that partners could earn from reaching certain sales targets.
Also, the Chartered Insurance Institute (CII) had to expand its vulnerable client best practice course to all its members because IFAs complained the pilot was only available to St James’s Place employees.
