St James’s Place Wealth Management is one of Britain’s most successful financial services firms. But SJP, a combined financial advice firm and investment manager, is not without its critics. There’s been extensive media coverage in recent years of its opaque fee structure and the poor performance of its funds. But as ROBIN POWELL explains, there are signs that St James’s Place is ready to change its ways.
After more than a decade doing it, as I have, following the day-to-day goings-on in UK asset management has become depressingly predictable. But the other day came news that knocked me sideways.
“Have you heard?,” a TEBI reader texted. “Joe Wiggins is going back to St James’s Place?!”
I won’t reveal my precise reply, but suffice it to say I was flabbergasted. Not the Joe Wiggins, surely? The highly intelligent one that writes so brilliantly on behavioural finance and the wisdom of just buying and holding low-cost index funds?
Yes, that one. And that St James’s Place, the FTSE-100 behemoth with all those corporate culture issues and dismal investment returns.
I’ll be honest, I was amazed when Joe joined SJP the first time round, and it was no surprise to me that it didn’t work out. The news that he’s now returning as director of investment research is only just sinking in.
The word on the street is that Joe was offered a life-changing financial package. I’m sure he was, because that’s how it works. The prospect of a massive pay day is partly why so many people, from regulators to financial news editors to MPs with small majorities are so loath to speak in negative terms about a dysfunctional industry that extracts so much value.
But to suggest that Joe is going to St James’s Place purely for the money, as some have done, like a greedy golfer or football player off to Saudi Arabia, is well wide of the mark.
Quite apart from being one of the smartest operators in this industry, Joe is also one of the most highly principled. He genuinely wants to improve investor outcomes. Knowing Joe, he won’t have taken this decision lightly.
The problems with SJP have been well documented. As someone recently said to me, its high fees have encouraged a very lazy head office culture with too many empire builders and apparatchiks. It also has a serious image problem.
Yet what is so interesting about the appointment of Joe Wiggins, and that of Justin Onuekwusi as chief investment officer in April, is that SJP has clearly reassured both of them that it wants to clean up its act.
I have always said that SJP, in spite of everything, has the potential to be a major force for good in UK financial services, given its enormous market share and financial resources.
What’s really exciting from my point of view, as a campaigner for a fairer and more transparent investing industry, is that, in Justin and Joe, SJP now has two indexing advocates in senior positions. I certainly can’t see either of them standing for any nonsense.
Yes, I have my doubts about how serious their new employer really is about moving in the right direction. Reformers like Joe will inevitably face resistance from senior colleagues and, crucially, shareholders.
We’ve been here before
We have, of course, been here before with Dame Helena Morrissey, who became a non-executive director of SJP in January 2020. She was openly critical of the company’s opaque and complex fee structure. When she left to join AJ Bell just 14 months later, she admitted that even she she still didn’t understand it.
Did she jump or was she pushed? We don’t know. But a St James’s Place insider apparently told Sky News when she left that there “there doesn’t seem to be a good cultural fit between SJP and Helena Morrissey”. In my experience of this industry, when good people come up against bad culture, it’s usually the culture that triumphs.
Even if Joe and Justin manage to stick around for longer than Dame Helena, it will take many years to bring about the lasting change required. It’s bound to involve some serious belt-tightening, including job losses, to enable reductions in fees and charges. It may also require a new division of SJP, with a separate name and brand, to meet the needs of mass affluent consumers who want financial planning and cashflow modelling rather than investment advice.
But who knows? With the likes of Joe Wiggins at the helm, St James’s Place might just surprise us. And, yes, in a good way. I for one will be rooting for him.
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