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Refunds potentially 10 x revenue?
In question now
A quick read of the RNS says to me cash rewards to Partners and Management will be protected: shareholders will be wacked.
I sold at £10 not temted at the current price.
AceOfClubs
I wonder how much they will have set aside for client claims and if they will have set anything aside for claims from partners.
I am expecting the new CEO to explain the problems and his plan to get the business moving again….he had better be convincing on both…..maybe he will want a new CFO.
The FCA are being forced to play hardball, SJP have managed to dodge RDR, for over a decade. The new charging structure has been brought about because SJP have consistently overcharged clients.
Once the initial advice fee has been paid through a 60 basis points levy on ongoing charges compared to clients who do not pay for the initial advice.
The third group to consider in this are the SJP staff, many of whom are receiving high-five and six figure salaries for relatively junior sales management roles. SJP can easily resolve the partner and shareholder issues by cutting the fat in its sales management function however, these are precisely the people making decisions.
The FCA are acutely aware that if they move too fast, SJP is likely to collapse.
STJ's biggest challenge will be keeping the "Partners" and the FCA both satisfied. If there is to be less customer derived pie to share out how will the pain be apportioned between "Partners" and shareholders? Will some "Partners" bail out or expect STJ to buy them out?
STJ's unique feature in the marketplace has been its large, well motivated (if usually a bit unctuous) sales-force and it cannot afford to lose too much of that feature. Will the FCA play hard-ball?
One for the gamblers or the brave at the moment.
AceOfClubs
The FCA’s Consumer Duty has shafted financial services. Best to deploy your money else where SJP’s share price isn’t going back to the levels of 24 months ago anytime soon.
Five days later SP back to where I sold them.As I stated I shall not re-enter until the fees and charging structure is clarified.
However I do believe this is a decent Company in which to invest with a good dividend yield and recovery prospects.
Sedaka...
You wrote on 25th January 2024..
I sold early on Monday as I was expecting a big fall today. I do not expect to re enter into this share until fees charging structure becomes clearer.
Hahaha, the share dropped 10%, youre comment above made me smile because the SP has already recovered in fact it's grown 4.88% over 5 days..
Not saying you're not right but imo knee jerk...
Interest savings rates are reducing and will continue over the next 12 - 24 mths, where do you think all of the money currently invested in banks etc etc at 6% is going to go when they mature??
My guess is equities...well see
Without digging too deep, you can see net outflows in all but the pension business for the last 3 months. Pensions have regular contributions which will take longer to fall away but it’s already down a long way and it wouldn’t be unheard of for those to go negative in the next quarter.
Property funds are already suspended for life and isa business, if the pensions go the same way the writing is on the wall.
The fund performance must have been excellent to raise AUM as it did…..which will help justification for positive value assessments.
This is a business that needs some serious reforms which may be expensive and painful for the company and the “partners”.
In 2021, the SP was £17. Wealth management was seen as the sexy high margin part of financial services because controlling access to clients was seen as the stickiest of fee bases……
What has gone wrong?
Clients being charged for no service.
Clients being charged high fees and early termination fees
Market pressures to reduce costs and fee charges.
Inflation
STJ reputation is a little tarnished and the Share Price has deflated…..
But there is still a decent business here, it has a large (wealthy) client base, once it has been transformed there should be a decent chance of a recovery of the SP…..but not back to £15-17, I am thinking 8-10.
The new CEO needs to be given time to set out his reforms and then implement them, so I dont see this share going above £7 in 2024 (absent M&A).
Buy in mid 2025 - if the new business starts to make some headway.
Good call as things have gone today. Lots of buying last 2 days!!! They’ll be ****
I sold early on Monday as I was expecting a big fall today. I do not expect to re enter into this share until fees charging structure becomes clearer.
Was that not a fairly positive rns ? Huge drop obviously not ?
Thought we were doing so well this week all gains gone in 10 minutes
Let’s see what the debt equity split is on any fund raise….
The story seemed to be that funds were needed to allow business transfers between the advisors/salesmen “partners”.
The older ones are retiring faster than new ones want to take up the business…..think the partners are going to be in for a shock as to the haircut they need to take because future fees are not going to match those of the past and their successors cant afford to pay the old rate.
Maybe there are guaranteed terms in their partnership agreement, in which case shareholders are going to take the hit.
No one will feel sorry…..best avoid until the situation is clear.
Very little detail on this £1bn bail out they are cooking up, it’s a brave move to say there are no problems and ask for around a third of the value of the company to fix it.
There needs to be an almighty dollop of truth to wash this down.
It will take a couple of years before we see any meaningful recovery here….
First we need to hear from Fitzpatrick about how he is going to reshape the business….it will likely need some quite heavy re-plumbing to get it working better for customers….which will then take time to flow through into business improvements…..
In the meantime they must be finding it hard to compete for new business….
A hold at best IMO….
The investments should be ring fenced and not mixed in with the company’s own funds.
That said there is a conflict of interest for advisers who are reliant on keeping as much funds under management as possible, the funds are struggling as managers get paid peanuts and perform accordingly. The majority of the charges go towards SJP’s margin and supporting the lifestyles of its management.
The best thing to do is seek independent financial advice, SJP’s advisers are in a worst of all worlds scenario where they are responsible for all costs but SJP controls all their income and advice.
St James manage my pension investments, is my money safe? The cutting of fees seems ideal for me, as long as my money safe
Well, at least the new boss will be ok with his £650,000 share award.
A bit of negativity in the press today about STJ gating one of their property funds, it is looking like a return to 500’s is on the cards. They don’t seem to be catching a breath.
Bargain or bucket ? Sell off overdone IMO so bought more this Morning. New fees structure not due until 2025 and plenty of time to adjust. Hold for Me as price will recover soon.
Jesus these are getting destroyed even worse than the rest of the stuff on the dog index of the world ftse 100.