SJP’s announced changes to its charging structure
By Holly Mackay, Founder & CEO
17 Oct, 2023
If you are covering retail finance and advice, consumer duty and assessment of value, please see comment below from Holly Mackay, CEO of Boring Money on SJP’s announcement to scrap exit fees.
Commenting today on SJP’s announced changes to its charging structure, Boring Money’s CEO Holly Mackay welcomed the changes as good news for customers.
“SJP had backed itself into a corner on their ‘exit fees which weren’t exit fees’. An impartial analysis of charges would typically reveal that they were no more expensive than peers over a longer timeframe, but their current structure is complex to calculate and dominates the airwaves in any discussion, impeding their ability to play a more constructive role in championing advice and building trust in the sector.
Their focus now will be to evidence continued client retention to the stock market, to evidence continued strong margins which may see a gradual shift to some more passive funds, and to evidence delivery of superior client outcomes to satisfy the regulator, the media and consumers.
Whilst the identification of charges at product, platform and advice level may appease the regulator, the truth is that for most customers transparency is not the same as clarity and so the art will be aggregated disclosure for most, and granular disclosure for those who want to dig.
Today has been a long time coming. The business has bowed to the inevitable and it will be interesting to monitor the stock market reaction as the implications are digested and customer behaviours tracked.”
Boring Money ran a research project with 1,000 advised customers in April 2023, using quant and qual methods to understand what value was in the eyes of advised customers.
The main component parts of value when it comes to financial advice are trust and peace of mind, financial planning, information, performance and fees.
Performance and fees were the least important elements for advised customers, making up 16% and 13% respectively of value for an average advised customer.
Trust and peace of mind is the most important element of value making up 26% of the total. More specifically the single most important factor for advised customers is ‘I have complete trust in my adviser’.
