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March 1, 2024

SJP sets aside £426m to refund clients for ongoing servicing failures

St James’s Place (SJP) announced it’s set aside £426m to address potential refunds owed to clients in respect of ongoing servicing.

Or the lack of it to be more precise.

The £426m provision has been set aside to refund clients who paid an ongoing service fee, but there’s no evidence that they received an annual review or service.

The announcement follows a back-book review of SJP clients from 2018, which was led by an appointed skilled person. The review revealed some of the extent of the problem and the potential cost to refund those clients affected.

The announcement by St James’s Place immediately sent its share prices plummeting.

Why are clients complaining about St James’s Place (SJP’s) ongoing services?

Clients are complaining that they paid an annual service fee to SJP but didn’t received any ongoing services.

St James’s Place began a service review after seeing a “significant increase” in complaints towards the end of 2023. These historic complaints were mostly linked to the delivery of ongoing servicing.

What have St James’s Place done?

St James’s Place says it’s been working extensively with the Financial Conduct Authority (FCA) during this process.

According to SJP’s Chief Executive Officer Mark FitzPatrick, the assessment revealed that SJP’s evidence of ongoing client servicing was “less complete” prior to its investment in a new CRM system in 2021.

Mr FitzPatrick acknowledged the problem, in a recent sky news report, saying:

” …in some instances, the frequency of services being delivered was below what clients should have received. This means that we may need to provide refunds for clients where we cannot find evidence that ongoing servicing has been provided.”

Adding: “If you can’t evidence it was done – it wasn’t done.”

In 2023 the number of clients found to have not been serviced or for whom SJP didn’t have evidence of servicing was 2% – around 20,000.

St James’s Place says it’s written to these clients and they will be refunded over the course of this year.

FCA review of ongoing advice

SJP aren’t the only one’s facing a review of their ongoing advice services.

Last month FCA wrote to 20 of the biggest advice firms requesting information about their delivery of ongoing advice services.

And in December 2023, it flagged concerns that it appeared some consumers may be paying for services, such as annual reviews, but not receiving them.

It’s unlikely that complaints about ongoing advice services are just an issue at St James’s Place.

Other advice firms could face similar consumer complaints in the coming months.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.