St James’s Place has come under further pressure after it was revealed that the asset manager is facing over 15,000 claims for overbilling that could cost the company up to £426 million.
According to a report in the Sunday Times, Bolton-based AMK Legal has filed the claims over the past three months on behalf of St James’s Place clients who say they were billed for annual reviews of their investments that never took place.
Last week, St James’s Place announced in its annual results that it had set aside £426 million to deal with complaints from customers who said they had been overcharged, based on claims dating from 2018 to 2023. This money will be used to cover all claims against SJP, including administration costs, not just those against AMK.
However, AMK said the company is currently seeking compensation for clients dating back to 2013.
The company’s shares plunged 32.9 percent following the announcement on Wednesday. As part of the announcement, the company also said it would cut its full-year dividend to 23.8 pence per share from 52.8 pence per share in 2022.
AMK said it had so far won £12 million in compensation for 4,000 clients and held regular meetings with St James’s Place.
AMK’s Michael Jordan told the newspaper: “SJP’s announcement talks about a review of fees charged between 2018 and 2023.
“We hope that the Financial Conduct Authority (the regulator) and SJP will see sense in this matter and provide redress to anyone who has paid fees since 2013 and has not had an annual review.”
The asset manager hired 90 additional employees at the end of last year to handle such complaints.
St James’s Place has been widely criticised for its high fees, particularly the early withdrawal fee of up to six per cent of the portfolio value. Last October, the company announced it would remove this fee, but has not yet implemented it.
St James’s Place told The Sunday Times: “We take all complaints very seriously and will investigate each one on its own merits. We know that customers value what SJP offers and whilst we have a high level of customer satisfaction, advocacy and a retention rate of 95.3 per cent, it is important that customers receive the service they pay for.
“That’s why we’ve committed to reviewing our records by early 2018 to ensure that clients have received the services they paid for from their adviser. If for any reason they haven’t, or we can’t find evidence of this, we will refund ongoing service fees.”
