In recent developments, leading UK wealth management firms, notably St. James’s Place (SJP) and Quilter, are under increased scrutiny due to allegations of inadequate client service and potential breaches of fair value obligations. These issues have led to substantial financial provisions and have sparked broader discussions about the industry’s commitment to client-centric practices.
St. James’s Place: Addressing Client Complaints and Compensation
St. James’s Place, the UK’s largest wealth manager, has been at the forefront of these controversies. In February 2024, the firm allocated £426 million for potential client refunds following claims that clients were charged for annual reviews they did not receive. This provision underscores the seriousness of the allegations and the firm’s commitment to addressing them.
Clients have reported delays in the complaints process, with some waiting several months for responses. SJP has acknowledged these delays and issued apologies, attributing them to the high volume of complaints being processed. The firm has provided multiple channels for clients to lodge complaints, including email and postal options, demonstrating an effort to facilitate the resolution process.
Quilter: Provisioning for Compensation and Regulatory Review
Similarly, Quilter has set aside £76 million to compensate customers who did not receive the financial advice they paid for, resulting in a pre tax loss of £60 million for 2024. This move reflects the firm’s recognition of service shortcomings and its proactive approach to remediation.
The Financial Ombudsman Service (FOS) has upheld complaints against Quilter, citing instances where clients were charged for advice they no longer required. In one case, a client identified as Mrs. B alleged that adviser charges totalling £5,972.42 were taken from her self- invested personal pension after she no longer required advice. These rulings highlight the importance of ongoing adviser-client communication and the necessity for services to align with clients’ evolving needs.
Fair Value Concerns and Industry Implications
Beyond the issue of unprovided services, there is a growing focus on whether wealth management firms are delivering fair value to their clients. This concern centres on whether clients’ investment portfolios are regularly reviewed to ensure alignment with their current financial circumstances and risk appetites. Failure to conduct such reviews can result in portfolios that no longer match clients’ objectives, potentially leading to suboptimal investment performance.
The concept of fair value is gaining traction, with legal and financial experts examining whether clients have grounds for claims based on the lack of regular, personalised reviews.
Ensuring that investment strategies remain suitable over time is a fundamental aspect of fiduciary duty in wealth management.
Client Recourse and Regulatory Guidance
Clients who believe they have been affected by these issues have several avenues for
recourse. Both SJP and Quilter have established procedures for handling complaints, which
clients are encouraged to utilise. If a satisfactory resolution is not achieved, clients can
escalate their complaints to the Financial Ombudsman Service, an independent body that
adjudicates disputes between consumers and financial firms.
But if you don’t trust the firms who might have already not delivered a perfect service, there are several legal and claims firms in the UK who are regulated and skilled at helping you to obtain a compensation if it’s applicable.
The recent actions by SJP and Quilter reflect a broader industry reckoning with client service standards and the imperative of delivering fair value. These developments serve as a reminder to all wealth management firms of the importance of maintaining transparent, client-focused practices and the need for regular, personalised engagement to ensure that investment strategies remain aligned with clients’ evolving financial goals.
