Dipping into middle England’s pockets: the St James’s Place business model

Lots to read in St James’s Place 2008 Annual Statement of interest to No Monkey Business followers. Over 80,000 wealth management clients have voted for SJP with their cheque books, with an average portfolio value of £182,000. Only 14% have assets over £1m so this is not the high net worth marketplace. In middle-income middle England, costs really do count. As SJP themselves say, we are under-providing and over-reliant on property investments (instead of financial-asset holdings) for our retirement. But attaching high front-end and continuous charges to both the stock of financial assets and new assets (which the firm is still very efficient at acquiring) pushes clients away from their goal. SJP is a phenomenal success story but a bitter sweet one.

The Retail Distribution Review: no solution for consumer confusion

A key decision the FSA needed to make, after consulting the financial services industry on its June proposals, was how it could help consumers be clear about the differences between independent financial advisers and product sales people. Its conclusions, in a feedback statement last week, will not help. The problem is that effective distribution to the mass market cannot be achieved by expensive free-standing advice businesses and needs big high street institutions with manufactured solutions.

Anticipating the Retail Distribution Review

The Discussion Paper resulting from the FSA review of the failed business model for long-term savings in the UK will be presented by the FSA at a conference on 27th June. No Monkey Business Limited circulated this briefing to financial journalists, anticipating what it will say. Our advice: don’t expect any silver bullet – all [...]

Anticipating the Retail Distribution Review

Click here to download a pdf version of this paper.
Insights from a firm that knows about alternative (consumer-friendly) business models
Key points

The background to the RDR is economic. There is a ‘market failure’ in the distribution of long-term savings products (FSA, Treasury, HOC Treasury Committee, Myners, Sandler). Three aspects: i) the business model for firms involved [...]

What you need to find out about charges when selecting an IFA

In “Advisers face questions over who pulls the strings” (FT Money, 5th May), Elaine Moore reports that it is now very difficult for consumers to select an IFA based on how they charge. Correct. ‘Fee-only’ superficially holds out the best hope of avoiding bias, but it wastes an adviser’s ability to game the commission system for the benefit if their client. It is also often a sign that the firm is predominantly a financial planner and cannot or should not be managing investment portfolios.