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St James's Place (SJP) has said it expects to see a drop off in growth in adviser numbers in 2012 as the retail distribution review (RDR) approaches, as profits for the company's advisory arm increased to £6.1 million for 2011.
Overall profits before tax fell significantly from £161.9 million in 2010 to £21.3 million in 2011, although after a £88.4 million policy holder tax credit was factored in profit before shareholder tax was £109.7 million compared to £84.2 million in 2010, a rise of 30%.
The upmarket salesforce saw profits for its advisory arm rise from £5.8 million in 2010 to £6.1 million last year as it also announced it will spend up to £2.5 million on its adviser academy in 2012.
SJP said despite the progress being made by most advisers towards the RDR there would be more advisers leaving this year sooner than had been expected:
‘We anticipate that a small number of existing partners will retire earlier than previously expected this year, in advance of the changes brought about by the RDR and consequently we expect the 2012 net growth in the partnership to be slightly lower than recent years.’
The company's life business increased to £89.1 million from the £72.8 million in 2010 and its unit trust business was up to £27.8 million from £17.3 million in 2010.
SJP, headed up by chief executive David Bellamy (pictured) warned that threats to its business model included clients switching off trail commission and the uncertainty that existed around its part ownership by Lloyds Banking Group.
‘A further risk for advice providers is that clients will be able to “switch-off” payment for ongoing advice. This will have little direct impact on the business, although it could affect our partners.
‘However, the strength of client relationships, on which our business is built, will mitigate this effect.’
SJP said in its results that the uncertainty surrounding continued Lloyds Banking Group ownership has potential for 'substantial impact' on the business:
It said: ‘The uncertainty surrounding continued Lloyds Banking Group ownership in terms of business strategy and rationalisation within the combined group has the potential for substantial impact upon SJP's business.’
It added: ‘We still do not expect an imminent change in the Lloyds holding or relationship.’
Comments (32)
Even SJP isn't immune from the effects of RDR then?
08:45 on 22 February 2012
Will the "adviser academy" be called 'King Edward's Place', or be named after some different variety of potato this time??
08:47 on 22 February 2012
please stop calling them a upmarket sales force, they are just a bunch of salesmen and women, who sold out for the practice buy out.who sell overpriced products.
08:47 on 22 February 2012
Joey,
Some of whom would not be permitted to sell wind turbines
08:50 on 22 February 2012
But I bet they all are proud to use their own names when discussing their place in our industry and I have no doubt they do not issue the same old downmarket drivel day after day.
08:55 on 22 February 2012
UP MARKET SALES FORCE??????????????!!!! HAVER YOU MET SOME OF THESE ROGUES?
CITYWIRE PLEASE STOP THIS MISNOMA.
09:00 on 22 February 2012
What's a MISNOMA? is it like a Melanoma?
09:13 on 22 February 2012
A quick 'google' shows that MISNOMA are in-fact an 'electronica group' (whatever that is).
A misnomer, on the other hand, is to give an incorrect name to something...
09:25 on 22 February 2012
@Tied Tony. I thinks it's like a misnomer but spelt badly!
09:27 on 22 February 2012
Every time I see an SJP article in NMA I do look forward to reading the well educated and professional comments made by the financial services elite. You truly are a credit to your IFA colleagues. Your clients are lucky to have advisers like you and not those SJP parasites!!! Anitaki, have you considered pressing charges for whatever crime SJP carried out against you and your family?
09:48 on 22 February 2012
Gosh, we are all a grumpy bunch this morning, aren't we?
09:48 on 22 February 2012
While so many are sneering at SJP it would be as well to remember that they do run a profitable business; they do have a significant client loyalty; they do put money into adviser training.
I can remember similar criticisms of its predecessor, Allied Crowbar. But I can also remember that many of its top people were highly trained and competent.
Just because you do not like its selling style, do not make the mistake of turning your back on it. A study of SJP may well reward IFAs in terms of business practice. Read some of the recent FSA enforcement reports and they should cause IFAs a high level of embarrassment that so many fundamental problems occur. 25 years after the introduction of regulation some of the criticism really should not be happening.
If you look at FOS reports you will find that SJP has at least as big an impact as AIFA ever had. The public face at least represents a responsible persona.
I have never worked for SJP (or AD), and have on occasion written in complaint of the actions of its "partner", so this is far from an eulogy for the company. But I find IFAs are so busy lashing out at anything with which they disagree that they also overlook aspects that they should be taking seriously.
SJP makes profits. Aegon owns a couple of IFAs - they make losses. Something is wrong with the business model. IFAs are not part of a sanctimonious priesthood; they are there to make a living by providing a service that people value and will pay for, by fee or commission. Shouting like school children does not portray a professional or attractive image.
09:52 on 22 February 2012
For the avoidance of doubt the definition of "up market" is:
"describes goods and products that are of very high quality and intended to be bought by people who are quite rich".
Let the debate continue......
10:20 on 22 February 2012
@ JHA
I though 'up market' was were yorkshire farmers took their livestock to be sold...
As in "I'm taking the sheep up (silent) t' market"...
10:28 on 22 February 2012
I have cancelled my subscription to VIz - no longer need it when I can simply log on to the Citywire site and laugh myself senseless.
Keep the stories and the comments they generate coming !!
10:41 on 22 February 2012
What does a 'drop off in the growth of adviser numbers' mean? Is this spin for 'we are contracting'? Does it mean that they are only recruiting salespersons with £100k income with attached client banks? Are they shedding staff prior to RDR so they make themselves more attractive to sell?
Lloyds do not want the reputational risk, and only picked them up by accident. Any private client buyout will surely add to the firms debt, and effect profitability, Best hope for a market flotation lads, otherwise you will have less and less pay for the same sales. Good Luck!
10:41 on 22 February 2012
Yet again the 'average' adviser excels himself by writing its high calibre of schoolboy drivel. The financial services industry in this country is riddled with problems and bad processes and last I looked, IFAs were not exempt from this by any means!
Glen McKeown, I completely concur with what you have written, although I feel your slightly more mature and enhanced intellect compared with what else has been written here today will be wasted.
I just hope that the rest of you have slightly more well rounded opinions when talking to your clients, otherwise you just make a mockery of yourselves and sadly of the industry which you are so clearly passionate about!
For all their faults, SJP runs a very successful, professional and client led business - ask their clients, they are clearly doing some things right!
10:59 on 22 February 2012
They HAVE got it right - it's annoying but they have!
12:02 on 22 February 2012
Can't fault their client loyalty or slick marketing but having recently carried out some work around TERs on their funds it made eye watering reading - clearly the trail commission is relied on by the ' Partners ' and the 3% upfront payment when a Bond ' wrapper ' is used must also be welcome. Will be interesting to see how it all pans out post-RDR.
Also, is it just me but I notice they win the ' Telegraph Wealth Manager of the Year' award more often than not.....and the Telegraph confirm they are an appointed introducer to SJP ?
12:26 on 22 February 2012
They are now even letting their "partners" retain shareholding in independent IFA firms, so therefore getting the best of both worlds!
12:30 on 22 February 2012
Reg
for your info the telegraph run wealth management seminars around the country, promoted via the newspaper, guess who does the talks, the UP market sales force SJP,
and yes the charges they apply on a simple isa is close to 3% pa, thats how the practice buy out is funded
13:10 on 22 February 2012
Why are people querying the words "sales force". Most people still in the business these days are true IFAs, tied advisers or proper wealth managers. But as is correctly stated, this bunch is nothing other than a sales force, as befits the outdated, mid 20th century model
14:04 on 22 February 2012
Anitaki
If you can’t press charges have you considered counseling!!!
One question strikes me though, how on earth do you know how every SJP partner operates. I thought you just wasted your time making childlike comments on here, but no, apparently you must spend the rest of your time stalking SJP ‘salesmen’
Get some work done!
14:16 on 22 February 2012
Well I have a name and have always thought of my role as being primarily a salesman who sells the value of implementing financial concepts to people.
I enjoy my current status in the industry mainly because of the many things I have been able to learn from others including SJP and it's ancestors.
If some of the anonymous fools on these blogs took the time to acquire some sales skills they might be able to express themselves better although that would not take much.
14:24 on 22 February 2012
CJ10
that's not nice, lets raise your game and be a professional please.
14:35 on 22 February 2012
Sorry Joey. I thought that was the level we were on here.
14:46 on 22 February 2012
Actually I take that apology back joey. I’ve just had a scroll back up and noticed your previous enlightened post.
“they are just a bunch of salesmen and women, who sold out for the practice buy out”.
Very professional indeed.
14:52 on 22 February 2012
some one got out the bed the wrong side this morning,and sorry if i offended you , if you work in direct sales you must have to put up with this all the time , but you will enjoy the buy out ,
if you don't work for the up market sales force why get involved ?
how many clients of SJP understand that the fees they pay for end up as a practice buy out at 6 times trail, if this was transparent im sure they would not be so loyal, smells like a bankers bonus, the investment does not need to be successful just the salesman needs to sell sell sell,
its all about the practice buy out.
in 1996 the then JRA offered me 990k to join and the famous buy out, i may not be the richest guy in the world but i never sold my soul to the devil.
good luck and no hard feelings life is way to short for us to fall out, its all harmless fun in a dull over regulated world.
15:16 on 22 February 2012
Barclays complaints up 77%
SJP pre tax profit up 30%
and which story is most interesting/attracts most negative comments?
As night follows day, the trolls are stirred from their barstools to barb and yelp like a pack of Dennis Skinner's
16:25 on 22 February 2012
In any organisation the advisers who are succesful are remunerated accordingly - ths has always been the case with Hambro Life Abbey Life, St James Place. The banks tend to churn an dburn cusotmers and employees e.g see how many bankers get redundancy at 50 ( or before). But with any sales organisation the good perofrming advisers prop up the poor tied agents - and it is these disenchanted advisers who will go - reducing the number of people being advised even further. St Kames Place is recognised as offering good training, good marketing assistance - and for those who are flexible to be able to focus - then the reqwwards are available. for IFA's there is only red tape beurocracy, hefty fees - and little financial reward - abuse by journalists - Standard Life writing out to IFA clients to poach ( or steal them ) through subversive tactics - and banks shooting fish in their barrels of cusotmers accounts - without providing any good financial planning advice.
21:03 on 22 February 2012
Crikey! Well, we've all had a long day of it...whatever "it" is. Here's to a good night's rest so we can all start over again tomorrow. If you're all good, I'll see if I can persuade Citywire to run a little number on Autoenrolment and NEST...that should get the Bloods boiling.
22:19 on 22 February 2012
I work for SJP. I look after a small number of professional city based clients. I carry out an assessment of their current position and future objectives. I use gap analysis software to ensure they will achieve those objective. This also allows me to help the client understand what kind of risk levels are required for them to achieve their objectives. I use the appropriate products (tax wrappers) including ISAs, UTs, Pensions and offshore bond wrappers. I see my clients twice a year. They have access to the SJP approach to investment management which means external investment consultants pick, monitor and replace managers as my clients are busy and appreciate institutional monitoring. I am remunerated through percentages of my clients funds under management as opposed to nominal hours spent, pretty much in line with the rest of the financial services industry. In this regard I include the City of London as well as financial advisers. Most advisory/merchant banking work in the City is based on percentages, such as rights issues, M&A, ECM etc. If you take pride in your profession, are interested emotionally and professionally with your clients, if you understand your clients and wish to develop long term relationships with them you appreciate that a financial advisers job is split between appropriate advice and a degree of sales. I have the utmost respect for the NMA professionals, good luck to you.
16:49 on 24 February 2012
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