Advisers at St James’s Place have been accused of failing to explain fully the firm’s charges to potential customers. Advisers at the firm, which is Britain’s biggest wealth manager, are also alleged to have failed to explain that they can only recommend a limited range of investments.
The allegations are made by consumer group Which?, where 12 researchers held undercover meetings with different St James’s Place advisers. The researchers posed as potential clients each with £100,000 to invest.
Which? concluded that four of the 12 advisers failed to explain charges clearly in general, while five of the 12 advisers failed to mention the annual fees that investors would pay on an ongoing basis. Advisers were inconsistent about what annual costs would be, it was also alleged, with their estimates ranging from 1.25pc to 2.3pc.
St James’s Place has faced previous cricitsm for fees. It levies a 5pc upfront charge of any money invested, as well as annual fees that vary depending on investments selected. Annual costs are around 1.6pc a year for a lower-risk portfolio but can exceed 2pc per year.
In a separate line of inquiry, Which?’s panel of investigators also sought to discover how well St James’s Place staff explained their status as “restricted” advisers.
Independent financial advisers can refer clients to the whole range of investment options, while “restricted” advisers can only recommend from a list of products.
Which? said that a quarter of the advisers in the research did not make clear they were restricted.
It concluded: “We found St James’s Place advisers were highly skilled at saying just enough to be within the rules, but using carefully selected facts to give a very misleading picture – that their restricted advice would be better, or cheaper, than independent advice.”
Which? said it has passed its findings to the City watchdog, the Financial Conduct Authority.
David Bellamy, outgoing chief executive of the FTSE 100 business, said: “St. James’s Place offers high quality, face-to-face, financial advice, evidenced by 98pc of clients who said our services represent reasonable, good or excellent value-for-money.”
He said more than 80pc of clients had described the value of the service as “good” or “excellent”.
“Our advisers are committed to putting clients’ interests first and we will continue to provide the excellent service to clients that has underpinned our growth over the past 25 years.”
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