Key facts
- Former St James's Place (SJP) advisers are preparing to launch legal action.
- The advisers claim SJP transferred clients without providing fair compensation.
- Several firms, including Prospera Wealth Management and Wellesley Investment Management, have left SJP.
- These departing firms took over £2 billion in client assets.
- SJP's share price fell more than 7% following reports of these departures.
- The company is facing scrutiny over its partnership model and fee structure.
Former advisers at St James's Place (SJP) are preparing to launch legal action against the UK wealth manager, alleging that the firm transferred clients within its network without providing fair compensation. The group, working with law firm Robertson Pugh Associates, claims hundreds of advisers were left unpaid for the client relationships they built after contract changes, suspensions, or exits.
This legal challenge comes as SJP grapples with a wave of departures from its partnership network. Firms such as Prospera Wealth Management and Wellesley Investment Management have officially exited, taking over £2 billion in client assets with them. Reports also indicate that Sovereign Wealth, which oversees approximately £3 billion in assets, is considering its future with the company. The market has reacted negatively, with SJP's share price falling more than 7% on Thursday.
Analysts note that these exits represent a small percentage of SJP's total £217 billion in assets under management. However, the departures highlight investor anxiety surrounding SJP's reliance on around 5,000 individual financial advisers operating under its proprietary product model. This model has faced persistent scrutiny over its fee structure. Chief Executive Mark FitzPatrick, appointed in 2023, is leading efforts to modernize the firm, including an overhaul of its charging model in August 2023 to reduce upfront fees.
Competitors, such as the Swedish firm Söderberg & Partners, backed by private equity firms KKR and TA Associates, are actively expanding their UK presence and recruiting independent advisers. Wellesley has already moved to Söderberg & Partners. SJP has declined to comment on the potential departure of Sovereign Wealth or the broader trend of firms leaving its network. The company faces the challenge of demonstrating the viability of its traditional partnership model amidst industry consolidation.