The City watchdog has warned clients of St James's Place PLC (LSE:STJ) to avoid using claims management companies for complaints about the wealth manager's service.
SJP said this morning that it has made a £426 million provision that wiped out its profits, setting aside the money to deal with potential compensation after a significant rise in complaints from clients.
In a statement to media today, a spokesperson for the Financial Conduct Authority urged clients to engage with SJP directly rather than through claims management companies, with the group having promised to contact those affected and reportedly hiring dozens of extra staff to deal with claims.
Scammers are targeting claimants who are awaiting decisions on existing claims, said the FCA - which has in the past encouraged compensation for misselling using an advert with an animatronic head of Arnold Schwarzenegger (pictured) to remind the public about PPI claims.
The FCA said it has been working closely with the FTSE 100 firm on the company’s response to the increase in claims.
"We welcome its plans to refund clients who may not have received the ongoing advice service for which they had paid or where this cannot be appropriately evidenced," the regulator said in a statement.
“Today’s announcement shows a commitment to resolving this historic issue. We will continue to engage with St James’s Place’s new leadership as it develops and implements their approach to redress.
One law firm, whose advertisements appeared alongside SJP articles today, put the call out for customers who have used SJP in the past 10 years and may be “owed thousands” in compensation.
Another firm selling SJP claims advice said there’s a possibility of “receiving full compensation up to £85,000”, while another suggested you could claim over £400,000 for “bad advice, excessive fees and poor fund performance”.
But as St James’s Place has said it will contact those affected, the FCA said "there is no need for people to use claims management companies.
“We would also encourage people to be alert to the possibility of scams. If you are contacted out of the blue, you can end the call and contact St James’s Place using the information on our register.”