All financial miseries start with misaligned incentives

From Neil Woodford to St James's Place, skewed financial incentives mean investors' well-being may not necessarily be a wealth manager's top priority.

Neil Woodford © Jenny Goodall/ANL/Shutterstock

Neil Woodford: sitting on your cash
(Image credit: Neil Woodford © Jenny Goodall/ANL/Shutterstock)

Last weekend The Sunday Times ran an article written by an ex-St James's Place (SJP) adviser. It made for disturbing reading. That's not because of the way in which SJP charges its clients. We don't like the ad-valorem model in which advisers and managers take a percentage of your assets each year. We'd prefer a flat fee model. However that is, for now at least, the standard system so we can't single out SJP for criticism. We can, however, single it out for the scale of its fees (most comparisons have it coming out at the extremely expensive end) and for what The Sunday Times' James Coney refers to as its apparently "culturally bankrupt" environment.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.