St James's place wealth management

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  • gadgetmind
    gadgetmind Posts: 11,130
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    bowlhead99 wrote: »
    1) she is someone who didn't notice it was expensive and didn't think to shop around for places to get advice ; and so unlike you, would not be competent to shop around for investment opportunities, or
    .

    Probably this. Slick salesman, gold watch, sharp suit, right accent, drives a flash car, here is someone who knows what he's doing!

    I've been there, done that, said "yes, let's have some of that success" without asking quite where all that money came from. They don't get rich from investing wisely, they get rich from people who invest poorly.

    I learned to avoid the pinstripe suite and gold watch brigade early enough to take charge of my investments in time. Other keep getting churned and end up with little.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • mitredog
    mitredog Posts: 4 Newbie
    edited 9 March 2016 at 2:36PM
    bowlhead99 wrote: »
    But to go back to my point up thread, it sounds like the mother with her life savings didn't think £5k up front was an unreasonable charge, or she wouldn't have signed up.
    .

    Many thanks for your words of wisdom.

    The actual upfront figure is £ 6700 depending on whether the annual charge is take at the beginning or end of the year .

    Mother is 87 years old and being treated for early signs of dementia, not someone as savvy as yourself and acquainted with the markets.

    I was not party to the meetings but as with all slick sales patter, I can only imagine how the sharp suits focused mothers mind on how SAINTjp were a huge company with thousands of investors and that her money would be in safe hands.

    After all they have been granted sainthood ?

    The fees would only have been mentioned as percentages and not totaled or expressed as an actual fiscal cost. 1.7% sounds minimal where £ 1700 is truthfull.

    Any way back to you to explain why it is acceptable for people take huge fees for crap advice
    from gullible, frail minded people.
  • bowlhead99
    bowlhead99 Posts: 12,295
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    mitredog wrote: »
    The actual upfront figure is £ 7700 depending on whether the annual charge is take at the beginning or end of the year .
    At the first count you had said it was £6700. Now £7700?

    Usually, given funds generally grow over time, a customer would prefer an annual fee to be taken at the start rather than at the end if they intend to stay with the firm, but most firms would want to charge daily, monthly or quarterly as you go. Either way, if only £95k is being managed because £5k was immediately paid in setup costs as you say, then the 1.7% could only be charged on the £95k to £92k being managed in year one.

    Have you actually seen the statement showing the value of the portfolio being £90.2k from £100k a year prior, as you implied in your first post? I do think you might perhaps misunderstand the structure.
    Mother is 87 years old and being treated for early signs of dementia, not someone as savvy as yourself and acquainted with the markets.

    I was not party to the meetings but as with all slick sales patter, I can only imagine how the sharp suits focused mothers mind on how SAINTjp were a huge company with thousands of investors and that her money would be in safe hands.

    After all they have been granted sainthood ?
    I think if you're expecting a religious experience just because they took their name from a London street beginning with "saint" it you may be in for disappointment :)

    While it is of course distressing when a family member has mental health issues, did someone accompany her when she said she was going shopping with her hundred thousand pounds? Did she tell them she was poor at comprehending things or easily confused? You ask if it is acceptable for someone to be sold advice when they are gullible or frail minded. We can only go on the facts.

    As a regulated financial services business they do have to assess her needs but do not have to be medically qualified. Should a salesman of any kind of product to an old person have to do more than get them to certify that they intended to go ahead with buying the product and had been given time to think it through? If so, what is it that they should do? Consult the heirs of the OAP, just like a parent or guardian has to be consulted about a product for a child? This might be insulting and obstructive to many people in their 80s.

    Have you now complained to them that she didn't understand the fees and she would have wanted her family to assess the success or failure based on total one year returns including the non-recurring setup costs, without regard to actual long term performance?

    And complained to them that she would not have wanted to be invested in something that can drop by a token three percent in a year if she 'only' wanted to take low to medium risks? How much loss in an arbitrary one year period would really be acceptable to her? In the context of pursuit of long term goals like beating inflation or providing a decent income or whyever she actually went to see them in the first place?
    The fees would only have been mentioned as percentages and not totaled or expressed as an actual fiscal cost. 1.7% sounds minimal where £ 1700 is truthfull.
    £1700 is truthful if the amount at work over the course of the year is £100k, though you say it was only £95k because of the setup fees.

    Either way, if you are investing for the long term and are doing it with six figure sums, it is quite useful to know the cost in percentages. Because, investment and savings account returns, dividend or interest income, inflation, global growth, stock market returns etc are also expressed as percentages. Children learn percentages at primary school. I'm more likely to be able to tell you what my management fee ratio is for a particular investment I hold or what my overall investment return is for the year as a percentage, than how many actual pounds and pence has been taken from my pension pot.
    Any way back to you to explain why it is acceptable for people take huge fees for crap advice from gullible, frail minded people.
    Morally, I don't like the idea of people taking huge fees off people who can't afford it - it can be exploitative. But I also don't like the idea that people should be protected from options which might be expensive - it is good to have a choice.

    It does seem in this case, without further facts, she *was* able to afford the £5k initial setup fee even though nobody here would have recommended she go for it, had we been consulted. It would certainly seem to now be a waste to go and pay £6k for a setup somewhere else instead, without sticking around for the benefit of the first £5k one-off. But the general consensus is probably that if she is going to invest for the long term she could shave half a percent or more off her ongoing costs by using a different adviser.

    Your contention at the end there is that the huge fees were paid for bad advice. Huge fee is true. But, bad advice? 3% loss in a poor year for world markets does not seem like a terrible return, and presumably they have used ISA wrappers as appropriate and considered her financial goals and objectives in designing the portfolio. You didn't mention what those were.
  • dunstonh
    dunstonh Posts: 115,905
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    ny way back to you to explain why it is acceptable for people take huge fees for crap advice

    How is the advice crap? Nothing you have said indicates anything of the sort.

    In every retail market there are competitive prices and there are expensive prices. They offered their terms and the terms were accepted. SJP are well known for being expensive. Most, if not all, tied sales forces have been expensive.

    There is a lot wrong in the eyes of many about the way SJP present their charges (an IFA or whole of market FA or even limited panel FA could not do it the SJP way for example). However, they do it within the rules, even if they are not in the spirit of the rules.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • gadgetmind
    gadgetmind Posts: 11,130
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    mitredog wrote: »
    Any way back to you to explain why it is acceptable for people take huge fees for crap advice
    from gullible, frail minded people.

    Do we know what asset allocation they chose for an 87 yo? Anything other than ultra safe would seem to risk accusations of miss selling.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • bowlhead99 wrote: »
    At the first count you had said it was £6700. Now £7700?

    Thank you for pointing out my error I have amended my post. Though of course the figures are actually £xxxx.xx if you wish to be pedantic and work to the exact penny.

    The point is that the charges for one year are £6700 far from the £5000 figure you like to play with. Or 6.7 and 5 in percentage terms as you prefer these lower looking numbers.

    My main bone of contention with the Palace is that their charges are not fully disclosed or transparent.

    The annual statement shows some lovely colour pie charts showing how many shares you have invested in Chinese Pot Noodles and how that number has changed over the year.

    There is no balance sheet showing the withdrawl of their £1700 fees, there is no mention of the 3.1 % loss on the capital.

    The Sunday Times article where the Palace was asked what their fees are is most enlightening " you are asking the wrong question" was their reply.

    Transparency, full disclosure ?
  • jimjames wrote: »
    If you couldn't handle a 3% fall then you should have remained in cash.

    Indeed St James Palace Bank gives a wholesum (sic) 0.65 % return on their Cash ISA, whereas the lowly Post office would give you 1.45%.

    So another thumbs up for the Palace.
  • dunstonh
    dunstonh Posts: 115,905
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    My main bone of contention with the Palace is that their charges are not fully disclosed or transparent.

    Whilst I do not particularly like being fair to SJP, their charges are fully disclosed. Transparency is an issue but that is because they sell their own product. Providers that retail their own product do not need to break down the charges in the way others do.
    The annual statement shows some lovely colour pie charts showing how many shares you have invested in Chinese Pot Noodles and how that number has changed over the year.

    Many investors like to know how they are invested and changes that have occurred. So, whilst you may mock it, it is part of the transparency you appear to want.
    There is no balance sheet showing the withdrawl of their £1700 fees, there is no mention of the 3.1 % loss on the capital.

    Their charges are not explicitly charged. They are handled within the fund. So, there is no need for them to do that.

    I have one of their statements in front of me and they do show the valuation at present and what it was 12 months earlier. The statement also shows additions and withdrawals.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    mitredog wrote: »
    So St James Place or St James Palace as I call them.

    Last year my mother invested her entire savings of £ 100 K. with them.

    Their fees were 5% to say hello, then an ongoing 1.7 % annually so that was £ 6700 in fees gone from the pot to start with.

    What saintly advice would you expect for such a fee ?

    she asked for a low to medium risk investment which has just lost LOST 3.1%

    So an annual loss of £ 9800 near 10%

    Well the advisor from the Palace has now abandoned ship and become an IFA and he has advised her to move her money and give 'him' 6.05 % in fees to move it to a company that MAY perform better.........:T

    So my advice to anyone thinking of 'investing' with SJP , think again.

    Did I mention that they also have a 6% exit penalty clause on pensions .

    Did i mention that apparently due to their new computer system it is taking up to 7 weeks to take your money out.

    Did I mention that 50 of their funds performance is classed as poor.

    In Romania President Ceausescu built himself a Palace whilst the populus was left impoverished.

    IMAGE OF PALACE HERE.

    Eventually they got fed up, took him out and shot him.

    If overcharging was illegal those working in the legal business would be guilty. So don't expect any help from them. Shop around and DIY is the way to reduce fees. Then again, like mending your car, if you don't know what you are doing you might still be better off being overcharged by someone else to do it for you.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • bowlhead99
    bowlhead99 Posts: 12,295
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    Glen_Clark wrote: »
    Shop around and DIY is the way to reduce fees. Then again, like mending your car, if you don't know what you are doing you might still be better off being overcharged by someone else to do it for you.

    Yes, that's a good analogy; I know my car warranty is still going to be honored if the main dealer does the servicing rather than having a crack at it myself - I'm buying peace of mind. I'm also saving hassle over using a cheaper independent mechanic and trying to prove later that everything was fixed with genuine parts. So there can be reasons to throw money at a problem.

    I still shop around between the dealers though, to make sure I only pay £300 rather than £500 for the same warranted solution to my requirement - I'm purely looking for TLC for the car itself and less worried about the quality of the chocolates or reading material in the waiting room. Others might not be so picky.

    As an aside, the cost of the service will invariably be higher on a percentage basis against the residual value of my car next year. A fixed annual 1.7% of that value would be preferred and would start to look pretty good as it gets older...
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