UK Edition
St James's Place to scrap controversial 'cruises and cufflinks' incentives for financial advisers
Financial advisers employed by Britain’s largest wealth manager may be about to kiss goodbye to lavish cruises, watches and cufflinks given as rewards for convincing clients to save more into pensions and Isas.
St James’s Place (SJP) is to undertake a review of its controversial staff incentives programme, Telegraph Money can disclose.
An internal staff memo obtained by this newspaper hints that the firm – which manages more than £100bn on behalf of its clients and belongs to the FTSE 100 – is to call time on perks that have seen it accused of flouting rules introduced a decade ago to protect ordinary savers and investors.
In a letter to partners (the term used for the self-employed advisers who operate under the St James’s Place brand), the chief executive, Andrew Croft, said the review was part of a plan to “modernise” the company.
“All in all, it is about the way we do things as a business overall,” he said.
“And with that in mind we need to make sure that it reflects our culture and is fit for purpose in the fast-changing industry we operate within.”
Telegraph Money understands that the review is likely to result in a ban on incentives that have been seen as a throwback to a commission-driven culture more akin to the Eighties.
Partners are rewarded for encouraging their clients to invest in SJP funds, with points that contribute to pay and bonuses. Partners are only invited to celebrity-studded dinners and overseas trips if they attract enough client money.
Rival firms have long argued that these arrangements encourage SJP partners to recommend investments even when they are not in the best interests of their clients.
Robert Reid of Syndaxi Financial Planning said any changes were “well overdue”.
“I congratulate SJP,” he said. “This is the first step to it becoming more transparent.”
The wealth manager has also drawn criticism over its complex charging structure, and exit penalties that can see customers pay thousands of pounds if they decide to take their money away from the firm within five years.
sam.brodbeck@telegraph.co.uk