St James's Place

St James’s Place has set aside £426m for customers who overpaid for advice and fees sparking a 31pc fall in the company’s share price.

The wealth manager announced a major overhaul of its fees last year, following the introduction of new consumer duty rules by the financial watchdog.

It scrapped its exit fees and capped advice and fund charges, after an investigation by The Telegraph found that customers were paying thousands more for pension advice compared to St James’s Place’s rivals.

In its results for 2023, the wealth manager – which has more than 900,000 clients – wrote that it would provide £426m, or £323.7m post-tax, for “potential client refunds linked to the historic evidencing and delivery of ongoing servicing”.

Chief executive Mark FitzPatrick said the firm’s cash result had been significantly impacted by the assessment into advice and fees.

He said: “This work was undertaken following a significant increase in complaints, particularly in the latter part of 2023, mostly linked to the delivery of ongoing servicing.

“The assessment revealed that our evidence of ongoing client servicing was less complete in the years preceding investment into our Salesforce CRM system in 2021, and we have therefore made a provision for potential client refunds to address this.”

He added: “Looking forward, the investment we’ve made into Salesforce means we are confident this is a historic issue.”

St James’s Place saw dramatically reduced profits following the provision of the one-off advice payment. Its post-tax result of £68.7m pales in comparison to its profit of £410.1m in 2022, but the wealth manager said this was solely the impact of the client refunds.

The company’s shares plummeted by 31pc to make the investment manager the worst performer on the FTSE 100 index on Wednesday morning.

The company saw millions of pounds wiped from its market value last year after stark criticism was made of its charging structures.

It announced in October that it would remove controversial exit charges for clients leaving the business early.



Most financial services companies had removed the so-called “early withdrawal fee” after the Financial Conduct Authority (FCA) introduced rules in 2012 to improve transparency.

St James’s Place also said it would cap its initial advice fees, ongoing advice fees, and fund charges.

Earlier this month, the FCA announced it had written to 20 of the biggest advice firms requesting information about their ongoing services on the back of the consumer duty.

The watchdog asked firms how many clients received a review and how many paid for ongoing advice but whose fee was refunded because the review did not happen.

The company estimated at the time that the roll-out of the new fee structure would cost between £120m and £150m, and the new structure should be implemented from the second half of 2025.

The advice payout announced on Wednesday means that St James’s Place had to halve its dividend to shareholders from 52.78p a share in 2022 to 23.83p a share in 2023.