The St. James’s Place gravy train rumbles on despite pledge to reform

St. James’s Place (SJP) was left reeling in 2019 after details of its opulent culture – paid for by clients – were laid bare.

The wealth manager promised to change, but recent pay packages awarded to its leading executives have left some wondering whether the firm has learnt its lesson.

A whistle-blower set out three years ago how company advisers were being rewarded with lavish holidays and diamond-encrusted cuff links – all paid for out of the fees which SJP charged savers.

Bonanza: SJP’s chief executive Andrew Croft earned 4 times as much last year than in 2020

In the wake of the revelations, the business vowed to overhaul its pay and perks.

But now the chief executive is earning as much as ever and one of the City grandees brought in to clean up its culture has made a swift exit. 

Boss Andrew Croft bagged £3.3million last year, SJP’s recent annual report revealed – more than four times the previous year when the board took Covid cuts and the most since his predecessor, David Bellamy, pocketed £3.6million in 2015.

Croft scooped 96.7 per cent of his maximum bonus, and 93.4 per cent of his maximum long-term incentive award for 2021. 

SJP said this reflected ‘the strong financial results for the year and the excellent performance in meeting or exceeding the strategic goals set by the remuneration committee at the start of the year’.

In 2021, profits climbed 50 per cent to £401million.

Baroness Morrissey, dubbed the ‘City superwoman’ for achieving a stellar career in finance while caring for her nine children, joined SJP’s board in early 2020.

Her appointment was viewed as a step forward for the male-dominated firm, and she vowed to help improve SJP’s culture, inclusion and diversity.

Early on she criticised the wealth manager’s charging structure for being too complex and promised to bring in more female talent. 

But after just 14 months, she stepped down to become the chairman of investment platform AJ Bell. During her short time in the job, she scooped £110,000, the annual report revealed.

Swift exit: ‘City superwoman’ Helena Morrissey stepped down after just 14 months

Paul Manduca, who had headed the board at Prudential and became chairman of SJP in May 2021, took home £306,127 last year.

Andrew Speke, of think-tank the High Pay Centre, said: ‘Given that SJP should be doing everything it can to prove its culture has changed, awarding the highest chief executive pay package since 2015 isn’t a good sign that much has changed. It’s all the more concerning in light of the lavish sums paid to Helena Morrissey to tackle this problem.

‘Actions speak louder than words, and SJP will need to do far more to prove it’s really turned the corner.’

SJP had long been known for treating its clients well. Advisers at the business would frequently take their wealthy customers to exclusive restaurants, sports matches, or on private tours of tourist destinations.

But what those clients didn’t necessarily realise, according to a former employee who recounted his time at SJP to The Sunday Times, was that it was all paid for out of their fees.

SJP charges more than many of its rivals – and the adviser said that clients would often end up forking out almost half of their investment profits over time. 

Customers were also largely unaware of how well the advisers were rewarded from the money they paid. If advisers hit sales targets, they were given Mulberry bags and Montblanc pens. 

Cuff links, or brooches for women, were also handed out, ranging from blue to green to gold, depending on the adviser’s rank.

Top partners boasted 18-carat white gold, diamond-encrusted cuff links worth about £1,200, the whistle-blower said.

And favoured advisers would be able to bag a spot on one of the firm’s overseas ‘conferences’ – effectively a week-long holiday with free-flowing champagne in locations such as South Africa, Zambia, Japan or Egypt.

In 2020, Primestone Capital, one of SJP’s shareholders, launched a blistering attack on the firm as it blasted ‘excessive pay’ and poor performance.

Primestone noted that a quarter of SJP’s direct employees, excluding the well-heeled advisers, earned more than £89,000, placing more than 600 SJP staff among the UK’s top 4 per cent of earners. 

Cowed by the outrage from customers which followed the revelations, SJP promised to get rid of all overseas business trips, and ditch company ‘regalia’ such as cuff links.

In its most recent annual report, SJP said over the last year it had ‘focused on bringing our culture to life through visual representation and stories that demonstrate the values and behaviours that underpin our purpose and vision’.

This included ‘widespread engagement with employees and the inclusion of the values within our ongoing employee review process’, it added.

SJP noted too that the remuneration policy was approved by 94.7pc of shareholders at the annual meeting in 2020.

But James Daley, managing director of Fairer Finance, said: ‘If you’re trying to indicate that you’re making a change in culture then it doesn’t have the ring of truth if you’re continuing to hand out and even increase the remuneration of the top team.

‘Culture flows from the board down and what was going on at SJP was all about complacency and excess. If you’re a customer, this isn’t the sort of signal you’d be looking for.’

This post first appeared on Dailymail.co.uk