St James’s Place: Most of our funds are failing to deliver value on performance

The vast majority of funds run by St James’s Place “delivered insufficient value” on performance and there are “no fast fixes” to improve the situation for customers, according to the wealth manager’s own assessment of its performance today.

Only four of St James’s Place’s funds were assessed as “delivering value” on performance, with three more “broadly delivering value”. In total, 30 of the 39 funds run by the company were deemed to be lagging in their performance.

“In many cases there are no fast fixes to areas we assessed as insufficient value or in need of improvement,” said Sheila Nicoll, chair of SJP Unit Trust Group. “Actions taken last year, such as manager changes and fee reductions, take time to feed through.”

Asset managers are required to publish an Assessment of Value report annually by the Financial Conduct Authority, where they must assess their funds on seven different principles with a traffic light system.

St James’s Place had missed the deadline for its value statement this year, as they are supposed to be published within four months of a company’s annual accounting period. The report was scored by its fund board, comprised of executives and independent directors.

How many St James’s Place funds are not delivering value?

The FTSE 250 wealth manager was weakest by far on the performance category, with 77 per cent of funds flunking the assessment of value.

These included the £9.9bn SJP Global Quality fund, which was also flagged as a serial underperformer in the latest Spot the Dog report.

Other areas with weakness included the comparable market rate of its funds, where six funds receives a red rating and nine received an amber.

Two other funds also received a red rating based on their fund charges.

Looking across all funds, 13 of the 39 funds run by St James’s Place were deemed to be failing to deliver value – a 33 per cent failure rate.

In addition, St James’s Place runs six other funds not directly available to clients in the UK, with all six failing to deliver value on performance, but still being assessed to deliver value overall.

The group has previously come under fire for its opaque fee structure and all-inclusive pricing, that makes it almost impossible to tease out the actual performance of its funds.

However, Nicoll clarified that the bundling of fees is taken into account in the analysis of performance in the report, “as well as looking at additional factors affecting performance and consequently, value”.

SJP are set to split out their fees midway through next year, with analysts saying outside parties will finally be able to judge for themselves whether the funds are performing sufficiently.