• St James’s Place shares were the FTSE 100 Index’s worst performer on Friday
• All firms overseen by the FCA have to abide by new Consumer Duty regulations

Wealth manager St James’s Place’s shares tumbled after reports emerged that it could be forced to revamp its fee structure.

St James’ Place shares closed down 21.8 per cent, or 178.4p to 640.2p, making them the worst performer on the FTSE 100 Index by a considerable distance.

The dive sent the stock to its lowest level since 2013 after St James’ Place, which has come under fire for high fees, said that it was conducting an ‘assessment’ of what it charges customers.

The Financial Times said the British investment giant was in discussions with regulators concerned that the wealth manager is not adequately abiding by new Consumer Duty rules.

Since July, all firms overseen by the Financial Conduct Authority have been required to provide consumers with ‘timely and clear’ information, better customer service, and products and services offering ‘fair value’.

SJP, Britain’s largest wealth manager, has been accused by critics of operating an unfair fee structure, charging high amounts for financial advice and making early withdrawals.

Currently, withdrawal fees for new clients go up to 6 per cent and gradually drop to 1 per cent over six years.

Just before the Consumer Duty rules came into force, SJP declared a cap on annual management charges for clients who had invested in bond and pension investments for over a decade.

But, according to the FT, this has not sufficiently satisfied regulators, who have asked bosses to justify maintaining exit fees for current customers while abolishing them for new ones.

In addition, it reported that the FCA was considering whether customers were best served by significant upfront advice costs and finding it difficult not to pay advice fees in the distant future.

However, SJP is worried that abolishing exit fees for existing clients could cause substantial damage to its balance sheet.

Approximately 30 per cent of the firm’s assets under management – £47billion – had been subject to exit penalties as of June 2023, the FT calculated.

In a statement to investors, SJP said it was reviewing its fees and charging models to create ‘a simple and scalable charging platform for the long term’.

It added that although the evaluation had not yet been finalised, the firm is ‘confident that all the options under consideration will ensure value for clients and a strong, secure, and sustainable business for all stakeholders’.

SJP said: ‘We naturally continue to engage with all of our primary regulators during this process.’

SJP’s announcement comes less than a fortnight after former Prudential boss Mark FitzPatrick became its chief executive-designate.

He is replacing Andrew Croft, who will stand down in December following a three-decade career at the company, including 13 years as finance chief and five as CEO.