31-07-2025
St James's Place cuts cash held for customer redress after fees shake-up
St James's Place has reduced the amount of cash it has set aside for a customer redress fund, the wealth revealed on Thursday.
The FTSE 100 firm clawed back £85million of the £426million it expected to pay out to compensate customers following complaints over historic ongoing advice charges.
It came as SJP revealed net client inflows almost doubled to around £3.8billion during the first half of the year.
The group is in the final phase of implementing its new fee structure next month after years of accusations its charges were were opaque and high.
On Thursday, the wealth group reiterated that it planned to launch its new new 'simple, comparable charging structure' to be in place from 26 August.
As part of the fee structure changes, the separate cost of the financial product, any advice provided and ongoing fund management costs will be split out.
The firm's exit charges have also been abolished for new customers.
St James's Place had already reduced its initial fee, which is the charge applied when a client first joins up to the firm.
This initial fee used to be 4.5 per cent of the wealth being handed over, plus an ongoing charge of 0.5 per cent.
From 26 August, a tiered initial fee approach will be adopted. Clients will pay 3 per cent on the first £250,000, 2 per cent on the next £250,000 and a 1 per cent fee on sums above £500,000.
The advice charge will be 0.8 per cent, which is higher than previously.
The fee saga came to a head in February when the London-listed firm said it had set aside £426million potentially to refund clients who were not provided with the services they should have been.
At the time, the business said it had received 'accelerating' levels of complaints from customers in the latter part of 2023, and that it is going to review customer records going back to 2018.
In an update on Thursday, St James's Place, said: 'During the period, following the FCA's new industry guidance around ongoing financial advice services, issued in February 2025, the Group revised the redress methodology.
'The Group have updated the assumptions to reflect experience from the project to date, which includes a larger representative cohort of clients.'
St James's Place clawed back £85million of the money it expected to pay out to compensate customers for historic ongoing advice charges.
The wealth manager said that it had now estimated it to be nearer £320million.
St James's Place shares rose more than 7 per cent on Thursday after the group unveiled bumper net inflows.
The wealth manager firm saw its net inflows double to £3.8billion in the first half of the year, buoyed by more demand for financial advice and renewed foreign interest in British markets.
The London-listed business launched a fresh £63.4million share buyback as its total managed assets jumped to £198.5billon by the end of the period, up from £190.2billion by the end of March.
The group recorded a 17 per cent increase in underlying post-tax cash to £240.4million.
Mark FitzPatrick, the company's chief executive, said: 'During the period our highly qualified, professional advisers helped over one million clients to navigate a complex macroeconomic environment, ensuring clients' financial plans remain on track for the future.
Beyond new business, the first half was a busy period of heavy lifting as we progressed in delivering our key programmes of work.
'We expect our new simple, comparable charging structure to be in place from 26 August 2025, and we look forward to achieving this important milestone.
'Meanwhile, our cost and efficiency programme is proceeding as expected and we are confident in delivering against our plan to take around £100 million out of our addressable cost base3 by 2027.'
