Tied wealth manager St James’s Place has sent its advisers guidance on how best to describe its restricted service.
In an extensive Retail Distribution Review (RDR) briefing note seen by Investment Week's sister title IFAonline, the firm - the UK's largest adviser with £32.8bn of assets under management - tells advisers to stress its restricted range of funds has been "carefully selected" by SJP, and ensure clients do not switch off trail commission post-RDR.
"You are required to disclose orally the nature of the services you provide," it read.
"An example of the type of statement you will need to make might be: ‘As a partner of St James's Place, my advice is restricted to those products and services that have been carefully selected and approved by St James's Place and consequently is guaranteed by them.'"
Partners - the term SJP uses for its some 1,600 self-employed advisers - will be allowed to charge up to 5% of a client's assets in fees, taking 3% in initial fees and 0.5% ongoing for themselves.
The memo confirms SJP, headed by CEO David Bellamy (pictured), will continue to take payment directly from the product, rather than a separate charge agreed by the client.
"While some advice firms will offer the option for clients to pay advice fees directly... we will be facilitating the payment of advice fees from the product, as now," the guidance said. "If the client is happy with our advice charges and wants to take our advice, there is nothing else for them to do."
It also urges partners to ensure clients do not switch off fees for ongoing advice, explaining clients may be more likely to do so post-RDR.
"Clients have always had the ability to ‘reject' the service and proposition offered by a partner and St James's Place, thus turning off all charges/fees, by taking their investment elsewhere. The fact they have decided not to do so reinforces the strength of the existing St James Place partner and client relationship.
"Nevertheless, some clients who do not feel they are receiving an appropriate level of ongoing service may choose to turn off this element of their charges in respect of post-RDR business.
"This change therefore highlights the important of adopting a robust client review. Clients who feel that the service SJP and its partners provide are value for money are unlikely to alter their relationship with us."
Relative value strategies useful
Taking advantage of "dynamic" industries
Opportunities despite hard-landing fears
Fund slated for Q1 launch
Keith Barrett, head of research at Ingenious Asset Management, asks whether outperformance in US healthcare stocks can continue or if it is time to take profits.