Posted inBusiness moves

SJP plans Asia launch of discretionary services

St James’s Place is set to roll out services from discretionary fund manager Rowan Dartington across its Asian operations during the first half of this year, according to Mike Gravestock, international partnership director.

Speaking exclusively to FSA‘s sister publication, International Adviser, Gravestock confirmed that SJP is currently working on building Rowan Dartington’s DFM services into the restricted advice firm’s existing proposition offered by advisers in Singapore, Hong Kong and Shanghai.

“I would be very surprised if we didn’t have Rowan Dartington at least operational in one of those jurisdictions by the half year.

“Rowan Dartington have some knowledge of operating in international markets and it’s clear that there is some demand for the DFM services they provide so we’re keen to play that into our proposition during 2017,” said Gravestock, who has worked for SJP since its launch in 1991.

Only SJP advisers

He added that the DFM offering would only be available via SJP’s existing advisers and partners in Asia, which currently stand at 102, following the FTSE 100-listed wealth manager’s acquisition of regional IFA firm The Henley Group back in 2014.

“What we’re looking at is for our Asia partners to have Rowan Dartington as part of their proposition.

“It’s not something that will be aimed at other advisers in Singapore, Hong Kong or China,” said Gravestock.

At the time of SJP’s acquisition, The Henley Group had $500m of assets under management, which Gravestock reveals grew by a “pleasing amount” during 2016 but stopped short of disclosing the exact figure.

In November, the SJP stalwart told our sister publication Fund Selector Asia that the firm had doubled adviser numbers in Asia from 42 to over 100 since the buyout.

Dubai launch

Asked whether SJP will launch a new unit in Dubai in 2017, amid long-running rumours that it had been looking to acquire a local IFA firm, Gravestock said the company was “still very much in the research phase”.

He described the UAE as the “next logical place to expand”.

“We haven’t made a decision as to whether it will be an acquisition or sort of green field, [that’s] still part of the research work we’re doing.

“That’s ongoing and it’s helping us make some decisions about what sort of operating model we might be considering,” said Gravestock.

“In terms of where I would see the next logical place to be to expand SJP’s international operations, the UAE has to be pretty high on that list.”

Adviser boom in Asia

SJP’s expansion in Asia coincides with a number of high-profile mergers and acquisitions (M&A) by international life companies and cross-border IFA firms.

Last July, UK-headquartered Aviva set up a 280-strong advisory firm in Singapore, known as Aviva Financial Advisers, in a further push into the domestic market following the earlier purchase of Professional Investment Advisory Services (PIAS), also based in Singapore.

In September 2015, shortly before Zurich exited Singapore, the insurer transferred its 160-strong adviser network to the Middle East-based Nexus Group, which is also aimed at Singapore’s local wealthy population.

‘Tripping in’

Gravestock added that he was “not aware of any significant numbers” of people ‘tripping in’ to do business with SJP, adressing rumours that rocketing adviser numbers in Singapore were targeting the wealthy from Thailand, Malaysia and Indonesia, who flew into the city-state to get investment advice.

However, Gravestock said such firms are not SJP’s competitors, explaining that its main rivals include “largely expat IFA type brokerages”.

“On the local side, in Singapore and Hong Kong there are larger insurance companies which operate an agency approach, where they have a number of agents who mainly deal with the local markets selling protection and savings business. That’s not really a competitive market for us,” he said.

Contractual savings plans

On the product side, Gravestock reveals that, over the past two years, he has seen a gradual move away from traditional contractual savings plans, which involve clients signing up length and often inflexible contracts with high exit fees.

“People were being advised to sign up to 10, 15, 20 or 25 year savings plans with either quite lengthy nil-allocation periods upfront or high surrender penalties if clients wanted to stop paying premiums or cash in their plan before the term of the plan had come to an end.

“There was a sense that clients were not entirely enamoured with that approach,” he said.

As result, he added that SJP made the decision early on that it would not offer such products.

Exit charge controversy

Earlier this month the wealth manager’s UK division came under fire over claims it will not be caught by an incoming 1% cap on exit charges on pensions, converted or transferred by anyone aged 55 and over.

SJP currently charges a fee of 6% if a client withdraws from their investment in the first year. This falls by 1% every year for six years. The company has publicly claimed that since its charges are based on the duration the investment is held, not the age of the investor, it will not be hit by the cap.

Amid mounting pressure over its charging structure, SJP agreed earlier this week to publish its pension charges for the first time.

Part of the Mark Allen Group.