St James's Place Wealth Chief Confident Advisors Understand Fee Overhaul

St James's Place (SJP) is revamping its fee structure, eliminating exit fees and adopting a simpler model to make it more competitive. Wealth boss James Rainbow expressed confidence that advisers understand the changes, which will take effect in July. The new structure aims to provide clearer and more transparent fees for clients.

St James’s Place (SJP) has confirmed that it will implement a new, simplified charging structure in July. The changes, announced in October 2023, aim to make the fee model more transparent and competitive, particularly by eliminating exit fees. The new structure will be rolled out on 26 August, following a significant IT infrastructure build to support the changes [1][2].

The new fee structure will separate advice, product, and fund charges, making it easier for clients to understand and compare. This move is seen as a response to increased scrutiny from the Financial Conduct Authority (FCA) on fair value for customers as part of its Consumer Duty work [2]. SJP initially held firm with its charging structure but later decided to adapt in response to the growing regulatory focus.

James Rainbow, CEO of St James’s Place Wealth Management, expressed confidence that the changes will benefit both advisers and clients. The new structure includes tiered initial advice charges (IAC) based on the amount invested. For the first £250,000, the charge will be 3%, dropping to 2% for the next £250,000, and 1% on amounts over £500,000. The ongoing advice charge will be 0.8% per year, while ongoing product charges will be tiered based on the investment amount [2].

SJP has also looked at the costs associated with running individual funds, making them more visible and comparable to clients. The new structure will enable clearer performance comparisons, addressing a long-standing issue that weighed on SJP's comparative performance against peers who keep costs separate [2].

The wealth manager has started communicating the changes to clients. Existing clients will transition to the new ongoing advice and product charges either on 26 August or once they come to the end of their early withdrawal charge period for bonds and pensions.

References:
[1] https://citywire.com/new-model-adviser/news/sjp-reveals-date-for-new-charging-structure-roll-out/a2470149
[2] https://www.moneymarketing.co.uk/news/sjp-to-implement-new-charging-structure-next-month/