Shares in St James's Place PLC (SJP) tumbled 15% in early deals after the UK's largest wealth manager came under scrutiny because of its fee structure.
The Financial Conduct Authority (FCA) has been pressing the firm to align its fees with the new "consumer duty" regulations, introduced in July, aimed at ensuring companies act in the best interests of their customers.
Since July, SJP's shares have dropped by over a third, following modest adjustments to its fee structure.
The firm has been in talks to further reform its fees, including the removal of early withdrawal charges for new clients by mid-2025 and simplifying various advisory and administrative fees.
However, regulators have warned that these changes may not suffice.
The company's complex fee system includes upfront and ongoing annual charges, with certain clients facing early withdrawal fees.
About £47 billion, or 30%, of SJP's assets under management, were subject to these exit penalties as of June this year, according to the Financial Times.
Regulators have questioned the rationale behind retaining exit fees for existing clients while eliminating them for new ones, the paper added.
SJP has argued that removing exit fees for current clients could significantly impact its financial statements. Nonetheless, the firm remains under the microscope for whether its high upfront costs and complicated fee structure align with customers' best interests.
At 9 am, the shares were down 125.4p at 693.2p.