Wealth management firm St James's Place has put aside £426 million for possible refunds to clients who didn't receive the services they were promised.
The company noticed a surge in customer complaints towards the end of 2023, and now plans to look back at customer records from 2018 onwards. St James's Place charges for "ongoing advice services", but it's now checking if these services were actually given to customers over the past six years.
Since 2021, the company has been using a new system from Salesforce, which gives them more information to determine what services were provided to clients. However, the evidence is "less complete" before 2021.
The company has reserved £426 million before tax to cover potential refunds, which resulted in a pre-tax loss of £45 million in 2023, compared to a profit of £503. 9 million the previous year. The company said: "We saw a marked increase in the number of clients registering complaints linked to the evidencing and delivery of ongoing servicing in the past.
"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. 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. ".
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Following the news, shares in St James's Place dropped almost one third.
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