Some of the changes will begin to take place in 2024 but work on making the changes will get under way straightaway.

As an illustration, SJP has set out what the new charging model might look like for a typical client:

Notes: 1. Varies with investment size and complexity of advice; 2 Tiered for larger investments; 3. Varies by fund, illustrative example shown

Source: SJP

SJP says as part of the changes that it will scrap its heavily-criticised exit charges and move its charges more into line with competitors. 

SJP says there will be three key changes for clients which will apply to the “vast majority” of the firm’s investment wrappers:

The three key changes are:

• ‘Simplifying new investment bond and pension business’. Investment bonds and pensions (new business) will no longer include an EWC (Early Withdrawal Charge). Instead, new investment bond and pension business will operate with initial charges combined with ongoing charges. These ongoing charges will be applicable from the outset for all components of SJP’s service, as is already the case with its unit trust and ISA business. Existing investment bond and pension products will continue to operate with the EWC structure until the end of their applicable six-year EWC period. SJP says this new approach simplifies charges for clients. 
• ‘Separating charges’.  Charges will be separated into component parts (advice charges, fund charges, and product charges). The wealth manager says this new approach will help clients to consider the value they are receiving from each element of SJP's services, and better enable potential clients to review and compare charges across the marketplace. It will also allow more relevant benchmarking of investment performance, supporting its Investment Management Approach, it says.
• ‘Rebalancing advice and product charges’. Charges will be rebalanced towards the value of advice, SJP says. This means that for all products, initial product charges will be removed, and ongoing product charges will be reduced and tiered for large investments. This rebalancing results in component charges that are aligned with the points where clients “receive value” from SJP’s service proposition, according to SJP.

Next year the company says that it will introduce a “more consistent” approach to fund charges that reflects the value each fund provides. Some charges may decrease while others may increase, but on average the impact on fund charges across the whole portfolio is neutral, SJP said.

St James’s Place has been influenced to make the changes by long term criticism of its charges and the FCA’s new Consumer Duty which arrived in July. The firm says it has engaged with the FCA over the changes.