Happy Wednesday, siblings. May I please be the first to inform you that there are only 8 Updates left until Christmas. Those of you who’ve taken advantage of the Extended CryptoFeline Winterval Layaway Club will be seeing the profits entering your crypto wallets very soon, and that’s a promise, though I’m afraid I’ll have to be restricting withdrawals at this time due to unprecedented demand and to ensure the stability of LangCoin. But I feel confident this situation will resolve itself shortly because of reasons, and we can all look forward to gold-leaf croquembouches this festive season. As for me, as you all know I am entirely unmotivated by the material, preferring to inhabit a more ethereal plane, but if you all wanted to club together and get me something small like this then let the record show I’m too classy to refuse it.
Talking of inhabiting an ethereal plane, I felt a bit like I was having an out-of-body experience late last week, and not in my preferred way. I think what I experienced must be the equivalent of Meat Tax Syndrome or Comedy Ali Tank Syndrome.
Here’s how it went down. SJP, as you know, announced their big pricing change last week with the removal of exit fees; a reverse ferret which must have caused extensive whiplash in the Cirencester region. Good news for Gloucestershire chiropractors, and good news for the market in general. The news was watered down a bit for me when I heard that the change wouldn’t come in for two years. That’s not great – a company has admitted that its practice isn’t up to scratch and that it’s hard for clients to understand (despite having clearly claimed the contrary not all that long ago). But it’s certainly not going to fix it for two years, no indeed.
This isn’t my main point this week, but whenever I’ve been involved in product design and you change something that wasn’t A-1, the main thing you want to do is get the change in as soon as you can to avoid sales blight. You see it when the new iPhone is due to come out – even Apple salespeople will raise an eyebrow if you go in and buy one of those top of the range massive iPhones the day before the new one’s announced. So you go “oh, right” and wait a bit, and then you get a new model which is better in ways which will make you richer, smarter, taller, thinner and better at the arts of love.
I guess SJP isn’t worried about sales blight, because two years it is. And in that intervening time the six-year exit penalty will still apply, and even when it comes in those clients who signed up the day before will still be in a six-year lobster-pot. So it’s eight years really.
I pointed this out and – as is their right – SJP clapped back at me here. Here’s what they said:
“It is absolutely incorrect to suggest the new charging structure will only apply to new clients from 2025. All clients will switch to the new charging structure as soon as it comes into effect…For bond and pension products, existing clients who are still within their Early Withdrawal Charge (EWC) periods will transition to the new pricing and proposition once their EWC period has ended.”
So let’s get this straight. The new charging structure has an initial charge and no exit fee. But if you are subject to an exit fee, you don’t get it knocked off until it was going to expire anyway. I can see that SJP is trying to protect itself here from rampant client and partner exits, but if Consumer Duty teaches us anything it’s that if folk want to go then they should be allowed to do so.
The bigger point here, and one I should have got to about 200 words ago, is that I’m saying exactly the same thing as SJP. We use slightly different language – I’d argue mine is more accurate; they’d argue the opposite – but we both agree that existing customers are still subject to their exit fees.
Where this is all going weird is that there is such a missed opportunity for SJP here. The two year wait isn’t great, but there was a way through all of this that didn’t resemble Ali denying tanks were on the ground while they were trundling through the background. It’s OK to say “well, we’d all like to go quicker but when you’ve got £100+bn to think about things do take a bit longer” – even if people still have a go at you. It’s OK to say “look, in our business not having the protection of exit fees means we have to put an initial charge in, and if clients aren’t paying that then it’s fair enough in our eyes that we still have the protection.” Folk will disagree, but at least it’s not dissembling. The conversation then moves to what is a decent initial charge, and that’s a good transparency and Consumer Dutery outcome.
SJP is structurally important to our sector. At our London event last year a wise IFA said he’d rather see clients getting restricted advice there than no advice at all, and that’s where I am too. But a chance to really move the industry’s biggest player into the light, even if that means mixed coverage, has been spaffed here, all in the service of spin and damage control. It hasn’t worked, and what we’re left with is a you-say-potato-I-say-potato trail of dead, and that doesn’t help anyone, least of all potential clients reading all this and wondering what the Falkirk is going on. A chance missed.
Links below and your music choice – well, talk about out-of-body experiences. This came on out of nowhere the other day when watching The Bear, and it slapped hard. One of those rare examples of a perfect song, and definitely goes on The List. Please enjoy of REM’s Strange Currencies.
That’s it for this week – I’m playing with Consumer Duty at the PFS conference next week in Welsh Wales, so may see some of you there I hope. Steve will Update you next week in my absence.