St James Place Charges

Sobryma

If you want an active approach Berry Asset Management look interesting - 0.3% management charge on a platform, but then fund fees, platform fees and IFA fees on top.

gadgetmind

Sobryma wrote: »

0.4% is good including IT charges.

That's because the majority of my holdings are in Vanguard trackers.

There is also still in the UK limited options on passives (I can't access ETF's in Aegon without engaging an IFA which sort of defeats the low cost objective).

Vanguard provide most of what I need and I then use other trackers for FTSE 250 plus some ITs, ETFs and direct holdings to add exposure to a few other areas.

Sobryma

gadgetmind wrote: »

Vanguard provide most of what I need and I then use other trackers for FTSE 250 plus some ITs, ETFs and direct holdings to add exposure to a few other areas.

I did toy with a similar approach by adding passives around a Vanguard LS fund. Eventually I decided to go active hence expensive route, especially when you add another layer of fees to manage it for you. I might eventually ask an IFA to benchmark me a platform maanged portfolio service but everyone I have seen comes in around Bestinvest cost.

mystic_trev

I reckon the OP's been 'stiffed' but won't admit it! Personally, I wouldn't touch SJP with a bargepole!

Sobryma

mystic_trev wrote: »

I reckon the OP's been 'stiffed' but won't admit it! Personally, I wouldn't touch SJP with a bargepole!

SJP are expensive if what has been posted a few times on here is typical of the market; IFA 3% initial charge and then 0.5% per annum. After 4 years an IFA would be chaeaper.

Sobryma

RVS6 wrote: »

Hi
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)?


Cheers:cool:

One obvious question - are the underlying funds exclusively SJP? If so that would be expensive.....

Whiteflag

dunstonh wrote: »

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.

It's interesting you see it as a gimmick, as more and more advisers are using cash flow modelling as the cornerstone of their advice process. It also forms a large part of the AF5 advanced financial planning qualification syllabus.


Can i ask what you use as the basis for the "advice" you give?

gadgetmind

(Text removed by MSE Forum Team)

I'll be interested to see his answer as I do have a cash flow type analysis of my own pre/post retirement situation, but I do recognise that I'm applying a lot of analysis on top of deeply unreliable numbers.

Qwerty09

For what it's worth, I spoke to 3 IFAs and an adviser who explained to me that he doesn't work for SJP, he chose to use them as the product provider. As I understand it, he is self employed and did not charge me for any of our meetings, plus he came to me in work and at home. He explained at the time that when he set up any plans etc. then St James Place pays him (which is fair enough).

My conclusion on the whole charges thing was that, no they weren't the cheapest, but then I'm getting value for money and peace of mind with St james place. This seems to be a company that is going to be around in years to come. I had an adviser in a large bank, they're not there anymore, I notice a firm of IFAs in the village aren't there anymore and oddly enough they joined St james Place, so if it's good enough for the IFA it's good enough for me.

Interestedinall

I came across this thread and found the content to be interesting to myself but think it was quite unhelpful to the original poster looking for help.

It is probably far to late to help your decision but I would like to shed light on the cost of charges.

To clarify from the start, I am not an adviser although I am qualified. I do not work for SJP, in fact I work for a platform ( which in layman's terms for the unfamiliar is like a fund supermarket), I do not work in sales, I work in servicing.

I spend my day talking to financial advisers both restricted and independent. I see a variety of charges being levied depending on the financial adviser.

RVS6 - since the FCA endeavoured to make charges more clear to consumers the best way to compare charging is to look at the total cost of ownership. The most common components of this are -

Provider charge - the charge levied to user a provider e.g standard life, aegon, fidelity funds network etc
Product charge - the charge levied for a product with a provider e.g. ISA, pension, bond
Transaction charge - the charge levied per transaction e.g to switch funds, to invest, to encash
Fund charge - the charge levied by the fund manager for their fund e.g. AMC- annual management charge or TER - total expense ratio which includes the AMC + other expenses
Adviser charge - the charge the adviser levies to service your policy on an ongoing basis e.g. for this he may switch your funds quarterly and review your needs yearly

These are not always applicable, for example you may go direct to a fund manager and bypass the provider and product charge and therefore have a lower overall total cost of ownership.

I am not including in this example any initial charge that is levied by advisers this is just the ongoing total cost of ownership.

Looking at what you have been told - 1.7% Managed, 1.8% Balanced, that actually does not look that expensive to me. I believe that is their total cost of ownership. I believe the 1.25% is the provider charge and it is likely that from that percentage they pay the adviser the equivalent of a servicing fee.

An example of what I see on a daily basis where i work is

Provider charge - for a portfolio of 75k 0.43%
Product charge - none
Transaction charge - none
Fund charge - there are so many funds that range from 0.17% to 2%, I do see some fund that are very popular and they tend to be 0.85 to 1.25%. For this example I will say an average weighted charge of 1%
Adviser charge - again I see a big variance here normally between 0.25% to 1.5%. I almost never see NIL charge even where the adviser just does the initial business and then never touches the policy again. I would say the average is 0.75%

Using my example this would mean 0.43% + 1% +0.75% putting the total cost of ownership at 2.18%.

In my time at my company I have seen thousands of clients policies and this is quite normal. The last time I looked approx 12,000 advisers used the platform I worked for.

Other platforms also have similar charges and I'm sure are also used by thousands of advisers.

Compared to this SJP does not look expensive. I do not know if they have other hidden charges such as transaction or product charges so can't comment on that but if the total cost of ownership truly is 1.7 or 1.88, then that is not expensive.

If you are looking for a more comprehensive analysis of cost ( though maybe a little harder to understand) I would recommend googling Mark Polson - The Lang Cat, as he writes many articles on this.

Dunstonh - You were very quick to criticise SJP labelling them as expensive whilst promoting yourself as cheap but were at all time vague. You were also in my opinion a little condescending to someone who was just asking for help. I would be quite interested in what a customer would get for the 0.4% that you claim it would cost to use you. Is that including the cost of the fund and provider? Would this be a one hit wonder - you invest the lump sum taking your initial charge and then never service the policy so there for the 0.4% does not include ongoing fees? You never actually made clear what that cost covered.

Cheaper is not always better, we all know we can get a cheap hand mixer are argos for £6 but is it going to last as long as the branded £30 mixer? Likely not.

RVS6 - I hope this has been of some help to you.