It seems that SPWs pricing strategy – which was quoted extensively in the Financial Times from a leaked internal document – has set the cat amongst the pigeons. The Financial Times said: “The aggressive pricing strategy….comes as it [SPW] seeks to become a big participant in the financial advice market and meet ambitious growth targets”. It goes on to say: “[SWP] will be charging new clients less than half what they pay its rival”. [St James’s Place]
And the timing couldn’t have been better with the reward and incentive practices of St James’s Place being subject to intense scrutiny by the newspapers over the last few weeks. No cufflinks for SPW staff, we hope, or luxury cruises. The person or persons who leaked the pricing strategy deserve a medal. Although, SPW senior management will be unimpressed that it came out the way it did.
On the subject of bonuses, SWP said earlier this year there would be a review of the bonus scheme: “ ……with the aim of greater flexibility to reward colleagues in line with their performance, and ensuring awards are competitive in comparison to Wealth market peers”. That’s all well and good for the future but what about now? Advisers have had a turbulent time since the beginning of the year. Not only have they had to deal with the TUPE outsourcing but in a few weeks’ time they will begin persuading existing customers to sign up to the new business. In addition to that, SWP launches the business to the public in early November and that’s going to increase the pressure on existing Advisers in the short term.
When it comes line management discretion we would expect Schroders to set out in detail how that discretion is going to be used when it comes to the payment of bonuses. A bonus ‘free for all’ is completely unacceptable. In a recent ‘Your Best’ survey, 31% of Lloyds staff said that they didn’t trust their line manager to make fair decisions about pay and bonuses. In reaching their decisions, what factors will Schroders use to differentiate performance. Given the turbulence we discussed previously, Schroders should consider using a fixed bonus matrix for 2019.
Members with any questions on this Newsletter can contact the Union’s Advice Team on 01234 262868.