St James’s Place (SJP) has announced modifications to its charging structure for new investment bonds and pensions. The primary change is the removal of exit fees, transitioning to a structure comprised of initial and ongoing charges without early withdrawal fees. This format is already employed in SJP's unit trust and ISA businesses.
The charges, which previously were bundled, will now be separated into distinct parts, namely: initial and ongoing advice, investment management, and product administration. This change aims to provide transparency and will be tiered based on investment size.
Andrew Croft, the CEO of SJP, emphasized that the updated charging structure aligns with the evolving nature of consumer interactions with retail financial services. The revised structure represents the ongoing value SJP provides to its clients. Furthermore, SJP is adjusting its fees to ensure they align with the value perceived by clients.
These alterations will be implemented in the latter half of 2025. The CEO indicated that this restructuring is a reflection of the current regulatory trends, in particular the FCA's Consumer Duty initiative and the consumers' desire for easy-to-understand fee structures.
The new structure will bring three main changes:
- New investment bonds and pensions will be simplified: They will exclude the Early Withdrawal Charge (EWC) structure, but existing bonds and pensions will retain the EWC structure until the conclusion of their respective six-year EWC duration.
- Charges will be distinctly separated: This involves breaking down the fees into advice, fund, and product charges, allowing clients to better comprehend the value of each service and promote comparisons within the market.
- Revised advice and product charges: Initial product fees will be eliminated, and ongoing product fees will be lowered and tiered based on investment size. This change is in line with the value clients perceive from the various service components.
By 2024, SJP also plans to standardize fund charges according to the value offered by each fund. While some fees might decrease or increase, the average effect on the fund charges portfolio-wide is expected to remain neutral.
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SJP believes that these modifications, developed in collaboration with key regulators, will cater to the growing demand for straightforward fee comparisons across all services. The company asserts that clients will benefit from these changes, as they will witness reduced ongoing charges for their existing investments.
The firm remains committed to offering value and positive outcomes to its clients, consistent with ongoing consumer duty expectations. They maintain that their fees will remain competitive, reflecting the premium service they offer alongside their partners. This approach, they believe, will bolster their brand and reputation in the market, benefiting their partners in the long run.
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