St James Place Charges

RVS6

Hi
I am contemplating a pension change and have looked quite a few options. I have seen a representative from SJP and he has been very helpful and has answered all of my questions. I have drilled down into the charges as I have read some threads previously that say they are not clear and that SJP are expensive. They aren't clear straightway, but become clear if you ask the right questions. I am advised that the overall charges for the two portfolios I would consider are:
Managed - 1.7% (1.25% AMC + 0.45% funds)
Balanced - 1.88% (1.25% AMC + 0.63% funds)

They have advised that these are the TOTAL charges per annum i.e. there is nothing else. Initially I believed there was a high transfer fee that was applied as a 4.5% fee on contributions for the first 5 years, but I am advised that this is not the case i.e. they do not actually take this charge. Instead they apply an exit penalty for the first 5 years on a sliding scale.

If the above is correct then their offer seems pretty competitive, and the agent seems very good in terms of general financial advice (he has alerted me to salary sacrifice) and does the whole cash flow modelling. The only drawback is being tied in for 5 years, but I am not looking to move again. Not sure how their portfolios have performed against others (seems difficult to compare)?

I think SJP have been slightly tainted in my mind from several threads I have read, but they seem to stack up to me. I would appreciate any comments forum users may have on the above and SJP generally.

Cheers:cool:

dunstonh

I have seen a representative from SJP and he has been very helpful and has answered all of my questions.

As you would expect from any regulated adviser.

I have drilled down into the charges as I have read some threads previously that say they are not clear and that SJP are expensive.

SJP are very clear and very expensive.

I am advised that the overall charges for the two portfolios I would consider are:
Managed - 1.7% (1.25% AMC + 0.45% funds)
Balanced - 1.88% (1.25% AMC + 0.63% funds)

An IFA could do either of those at 0.40% (depending on fund size and possibly a bit lower). If you have a desire for external funds then they can be done cheaper as well.

If the above is correct then their offer seems pretty competitive,

4-5 times more expensive than the cheapest options and nearly double comparable ones.

and does the whole cash flow modelling.

Gimmick. However, if you like that sort of thing then fair enough. Look back it in future years and you will see how unreliable cashflow modelling is.

I think SJP have been slightly tainted in my mind from several threads I have read, but they seem to stack up to me.

They are typically good at what they do. Their sales reps have slick material and tools. However, you are paying for that with increased charges. If you want to use a sales rep with a limited selection of funds at a higher cost to get slick material then that is your choice.

RVS6

Thanks for your comments

The SJP costs seem comparable with various charging structuresI have been presented with by others – ranging from Hargreaves Lansdown’sadvisory service to several local IFAs. Theyall seem to charge around 1% for their advice/ongoing servicing with the fundand platform fees on top. So total charges of anything from 1.75% to2.3%. So not sure why you seem to think SJPare so expensive? What do you consider comparable rates and what for? I
have not yetexplored the passive route where I believe charges for the products themselvesare much lower, but there is then the passive vs active argument….! I am not wanting to pick investments myselfas I don’t have the knowledge or time, so like millions of others I want some ongoingservicing and advice and am prepared to pay for it.

Cheers

dunstonh

Theyall seem to charge around 1% for their advice/ongoing servicing with the fundand platform fees on top.

Do you need ongoing services?

So not sure why you seem to think SJPare so expensive?

Answered already. Just done a pension this morning for someone with a 0.40% annual charge.

The SJP costs seem comparable with various charging structuresI have been presented with by others – ranging from Hargreaves Lansdown’sadvisory service to several local IFAs.

HL is not known for being low cost.

so like millions of others I want some ongoingservicing

If your fund is large enough then it makes sense but until it is, do you actually need it? Are you paying for a Ferrari to do the school run?

RVS6

My pot is currently £80k. if I don't have any kind of ongoing advice how am I going to know that it is growing as I would like it to in line with my retirement goals (I have 25 years to go), and how would I know when to revise the portfolio in response to market changes etc? My current arrangement has simply sat on the Skandia platform with the money invested in five funds for the last five years and has not done very well - I am sure if my IFA had actually been pro-active those funds would have been adjusted at some point and the growth would have improved.

What was the arrangement that only incurs a 0.4% charge? Is this the TER?

HL was 2.21% all in.

As per a previous post I made it is all a bit of a nightmare!!

Where are you based?

dunstonh

My current arrangement has simply sat on the Skandia platform with the money invested in five funds for the last five years and has not done very well

Skandia platform is one of the better platforms and has over 1500 investment options with funds costing as low as 0.1% right up to 2%.

I am sure if my IFA had actually been pro-active those funds would have been adjusted at some point and the growth would have improved.

or got worse. Tinkering due to opinion on how the markets may move in future frequently results in lower returns.

What was the arrangement that only incurs a 0.4% charge? Is this the TER?

There are a few that can go that low. Indeed, your Skandia pension can go lower.

HL was 2.21% all in.

Expensive aren't they.

RVS6

I figure I need advice ongoing otherwise I am a rudderless ship.

What sort of fund has charges of 0.4% or even 0.1%? Are these trackers?

My current IFA offered no advice or regular review and I worked out that one of the funds had performed badly - there was scope there for at the very least consideration for changing it. That is why I am trying to select an established IFA who speaks plain english and seemingly offers decent advice. Whilst some may consider it costly, I would surely be worse off if I tried to deal with it myself. I could have an IFA set up a portfolio for me but I wouldn't have a clue when I would need to review/change funds, and I wouldn't necessarily know why a fund had performed badly. Comes back to the time and knowledge needed, and with a busy job and family life I haven't got time to poor over charts an statistics. I must be one of millions!

jem16

RVS6 wrote: »

My current IFA offered no advice or regular review and I worked out that one of the funds had performed badly - there was scope there for at the very least consideration for changing it.

What fund are you referring to?

bigadaj

Dunstonh are you saying you could represent the OP on the basis of a total 0.4% charge, so on a pot of £80k total costs would be £320 per year. If so what would this cover, is this the ter or I guess amc for a reasonable range of pension funds, and would this conclude your set up but not servicing, if so what would servicing be?

gadgetmind

RVS6 wrote: »

I figure I need advice ongoing otherwise I am a rudderless ship.

Investing is one of those areas where putting more thought/work in doesn't necessarily lead to better results. In fact, it's a bit like horse races where the horse that's lost its rider beats the others as it doesn't have as much weight on its back.

The weight on your back are fees, so keep those low. After that, it's all down to asset allocation (easy to get wrong, but once along the right lines, there isn't really a magic bullet to better returns) and rebalancing.

Any good IFA can handle this for you and will cost you far less overall than SJP, who charge like a wounded rhino. I was seduced when much younger by one of their slick salesmen (that's what they are) but fortunately moved on after a few years.

Linton

RVS6 wrote: »

I figure I need advice ongoing otherwise I am a rudderless ship.

What sort of fund has charges of 0.4% or even 0.1%? Are these trackers?

My current IFA offered no advice or regular review and I worked out that one of the funds had performed badly - there was scope there for at the very least consideration for changing it. That is why I am trying to select an established IFA who speaks plain english and seemingly offers decent advice. Whilst some may consider it costly, I would surely be worse off if I tried to deal with it myself. I could have an IFA set up a portfolio for me but I wouldn't have a clue when I would need to review/change funds, and I wouldn't necessarily know why a fund had performed badly. Comes back to the time and knowledge needed, and with a busy job and family life I haven't got time to poor over charts an statistics. I must be one of millions!

There is not necessarily anything wrong if a fund does badly. One constructs a portfolio to cover a range of investment areas and at some times particular areas will do relatively badly whilst others are doing well. This is as expected and doesnt matter - what matters is the performance of the overall portfolio.

If you sell something that is doing badly you are selling low, and if you then buy something that is doing well you are buying high. A strategy that is guaranteed to make you a loss. But it is what many new investors do.

So my suggestion is that you talk to your IFA and get him to explain why the funds you have concerns about have performed as they have. It could be that the manager has lost the plot or it could be that for global economic reasons the particular area has problems. These effects are far more significant than whether the charges are 0.1% or 1.0%.

If he cant explain to your satisfaction and you dont have the time to learn about investing look for a new IFA.

If you let us know the funds and the time period perhaps we can comment.