Wealth manager St James’s Place said it has set aside £426 million potentially to refund clients who were not provided with the services they should have been.
The business said it had received “accelerating” levels of complaints from customers in the latter part of 2023, and that it is going to review customer records going back to 2018.
St James’s charges for “ongoing advice services” but it is now having to assess whether it actually provided these services to customers over the last six years.
Since 2021, the company has used a new system from Salesforce, which means that it has more evidence to go on to figure out what clients were provided with.
The group added that evidence is “less complete” before 2021.
It set aside £426 million before tax to cover the cost of potential refunds to clients, a move which pushed it into a £4.5 million pre-tax loss in 2023 compared with a £503.9 million profit the year before.
“We saw a marked increase in the number of clients registering complaints linked to the evidencing and delivery of ongoing servicing in the past,” the company said.
“We’ve taken this very seriously and where gaps in record-keeping mean that there is a lack of evidence of the delivery of ongoing servicing, we’ve refunded these charges to clients.
It added: “We recognise that this is a disappointing outcome for everyone.”
“Looking forward, the investment we’ve made into Salesforce means we are confident this is a historic issue.”
Shares in St James’s Place fell by a little under a third after the news.