SJP chief executive Andrew Croft: View from the top

Consumer Duty

The Consumer Duty was a very large project for us, as it was for most businesses.

I think on some days we had around 400 people working on it. It was huge and a great deal of work was done. We wanted to build on that.

Essentially, we wanted to ensure we had a sustainable business model for the future. We feel it’s sustainable today, but we wanted to have simpler and more comparable fees. Not so much for clients, because the fees are explained to them. But if you’re not a client our fees could look difficult to understand.

The SJP model

We have always found our model works well for clients and we have continued to grow. We have strong client advocacy, retention rates and client satisfaction.

If I was to stay, I would probably need to sign on for another five years

Personally, I like to know what I’m paying in total, rather than try to work out individual bits, but it’s where the market is going and where consumers are going. It is where regulation is going.

When we go into this disaggregated, unbundled world then it becomes very clear what our fees are for each component. They are set at the right place from value for clients, from the price to provide, but also from market comparability.

Technically, the EWC isn’t an exit fee. I know you might say it looks like one but in effect it’s a way of collecting the initial advice fees.

We are ultimately reducing the total fee so therefore we must become more competitive. And we’re looking to future-proof the business.

Cover story: No way out? SJP sees light on exit fees

Reputation

I think, once these changes are made, the reputational issues are a lot easier to deal with. No one likes reading negative headlines in the press or on social media. I’m sure some potential clients may have read those negative headlines and decided they did not want to choose SJP. The reputational issues and negative stories cannot be positive.

Never underestimate the value of advice. Advice causes action, rather than just sitting there not knowing what to do

The pricing review is a big announcement that couldn’t be communicated to advisers in advance. There were plenty of rumours and speculation in the press so in that sense it isn’t a total surprise.

Everyone is trying to work out what it means. I think that will take time. That is our job with shareholders, partners, employees and also clients — to explain the changes, why we’re making them and why we believe it’s good for the future and good for client outcomes.

We’re looking to get ahead of the game.

Timeframe

The lead time of two years is mainly a systems-related point. We’ve done a big migration in the past six years onto a system called Blue Door. So we’ve got the muscle memory and we are on a modern 21st century platform.

It’s not like we’re trying to do all of this at the same time as getting off a really old system. But it is still a big systems development.

It could be something like 10 million records for our clients.

We are tripling the amount of data that flows through the organisation, and you need bigger pipes. You need more processing power.

We cannot risk getting the IT wrong. There have been plenty of stories in financial services where the IT has not worked and that’s caused consumer detriment and harm.

The academy is enabling us to change the diversity of the adviser base — but that will take time

This announcement has replaced rumour with fact. Removing uncertainty is really important.

Value of advice

It’s important to think about the value of advice and this isn’t just an SJP point — this is a point across the wider advice market.

Never underestimate the value of advice. Advice causes action, rather than just sitting there not knowing what to do.

There’s plenty of research that talks about the peace of mind of advised clients. They feel far more financially secure, knowing that they’ve got a trusted adviser who’s looking after their back.

But there are not enough advisers in the UK, so you have an advice gap. At the same time you have a savings gap, which is continuing to grow.

If you’re not a client our fees could look difficult to understand

And our financial system is quite complex.

The UK needs to close that advice gap. I like to think we are doing our part in terms of the academy. I think the academy is also enabling us to change the diversity of the adviser base — but that will take time.

Retirement

I’m heading into retirement after 31 years with the business. The new CEO, Mark, will assume the role on 1 December.

These changes have got nothing to do with my decision to retire. I’m coming up to 60 next year and my life plan was always to retire around 60. If I was to stay, I would probably need to sign on for another five years.

Essentially, we wanted to ensure we had a sustainable business model for the future

2024 is going to be key for doing the strategy from 2025 to 2030. And therefore I sat down with the chair last year and said, “It’s probably time to hand on that proverbial baton.”

This article featured in the November 2023 edition of MM. 

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