St James’s Place faces legal action over adviser client transfers

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St James’s Place legal action

Highlights

Former St James’s Place advisers, represented by Robertson Pugh Associates, are organising a group legal claim for alleged unpaid compensation over transferred client books.
Some advisers allege St James’s Place terminated or suspended contracts and moved clients to others in the network without fair payment for built-up business value.
St James’s Place set aside £426 million in 2023 for increased customer complaints, with shares recovering from a low of £4.15 in April 2024 to £12 recently.

Claims over adviser exits and client books

As first reported by the Financial Times, former advisers working through St James’s Place’s appointed representative network are organising a group claim with law firm Robertson Pugh Associates over alleged unpaid compensation tied to transferred clients.

St James’s Place operates through advisers and wealth managers who sell only its services and products. The group alleges that hundreds of appointed representatives had their clients moved by SJP to other advisers in the network without fair payment for the value they had built up in their businesses.

According to Robertson Pugh Associates, some advisers saw their contracts terminated or suspended, while in other cases St James’s Place acted after representatives sought to leave the network. The law firm says it is bringing together former appointed representatives who allege their businesses were taken without fair compensation and that it intends to pursue recovery through the courts.

Broader pressure on the wealth manager

The planned case becomes public as St James’s Place continues to deal with the fallout from scrutiny of its fees and its handling of customer complaints. The company overhauled its charging structure in 2023 after the introduction of the consumer duty, which is intended to ensure financial services customers receive a fair deal.

SJP also set aside £426 million the following year after an increase in complaints from customers who said they had not received sufficient financial advice, though the company has since clawed back part of that provision. Its shares rose from a low of £4.15 in April 2024 to £15.20 in January before falling back to around £12, and the company does not immediately respond to a request for comment.

Our earlier article on the FRC’s sanctions against BDO detailed how the regulator penalised the firm and an audit partner over “numerous and pervasive breaches” in the 2019 audit of collapsed construction group NMCN. We noted that the findings intensified broader legal and regulatory pressure on BDO, including ongoing scrutiny of audit quality and the prospect of further litigation.

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