(Bloomberg) -- St. James’s Place Plc clashed with Goldman Sachs Group Inc. after one of the investment bank’s salespeople in London sent out a note questioning the British wealth manager’s business model.
The company, a prominent U.K. investment adviser that has been criticized recently for its fees and staff bonuses, complained to Goldman Sachs in the past few weeks after it became aware of the comments made by the Wall Street bank. Goldman Sachs probed the company’s growth and also raised issues about its debt levels, people with knowledge of the events said.
The comments were in a note distributed by Goldman Sachs’s specialist sales team, rather than its in-house equity research department, which has St. James’s Place shares on a ‘neutral’ rating, while the majority of analysts rate the stock a ‘buy.’
An external spokeswoman for St. James’s Place and a spokesman for Goldman Sachs in London declined to comment.
The bank does not have a corporate broking relationship with St. James’s Place. Found only in the U.K., corporate brokers are appointed by companies to liaise with institutional shareholders and offer strategic advice, often leading to underwriting and corporate-finance work. Still, Goldman Sachs is one of the biggest advisers to blue-chip British firms, making its employees’ views on companies particularly influential in the City of London’s financial district.
In recent months, St. James’s Place has faced a series of negative headlines in the U.K. media over its business practices, including reports of the lavish rewards the company gave its staff for luring in new money. The firm has also faced questions over its fee structures, with the U.K.’s Sunday Times reporting in July that clients who invest 1 million pounds ($1.2 million) could have almost half their profits eroded by its charges over a 20-year period.
A review is underway at St. James’s Place of its incentives and recognition structure, according to the company. It has also canceled some overseas staff trips.
St. James’s Place has also faced questions over its longstanding relationship to embattled fund manager Neil Woodford. It was one of Woodford’s earliest backers when he struck out on his own in 2014, and stuck with him even as performance struggled and redemptions rose. It only ended its relationship with the money manager two days after Woodford froze the flagship fund in June.
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