St James Place Charges

gadgetmind

Interestedinall wrote: »

Cheaper is not always better

I hold multi-asset portfolios of Vanguard trackers, bond/property/infrastructure ETFs, with some "spice" added via ITs bought in unloved sectors on deep discounts.

My fees are sub 0.4%.

My returns will run rings around any portfolio with fees of 2% that chew close on 50% of the long-term return that can realistically be expected.

When it comes to investing, cheaper is always better as long as you understand asset allocation and rebalancing. Given the time investment to understand this (just a few hours?) no-one needs to pay up-front nor servicing fees.

I say this as an ex SJP investor who is now a little older and much wiser.

jem16

Interestedinall wrote: »

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.

The traditional type of pension available from a platform is usually a SIPP with thousands of options in choice and usually for the more experienced investor.

However for many this is an overkill and most people are never going to utilise all the bells and whistles that a SIPP can offer. Therefore you're often paying for features that you would just never use.

With SJP you're paying for all those features but you're limited to a small number of funds.

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.

The problem I see with SJP is that the world of RDR seems to have largely passed them by. Somehow they are able to quote a fee of 1.25% that doesn't seem to break down exactly what goes where. You assume a servicing fee but I would like to know and have it explicitly stated.

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.

1.7% or 1.8% in itself is not expensive if you are including the cost of platform, adviser ongoing servicing and a good, well-established fund with a good track record.

However if you compare that to a bog standard balanced or managed pension fund ( which is what the OP seems to be talking about ) offered by an Insurance company Personal Pension, then it is expensive.

The OP had £80k to transfer, not a small amount but not a significantly large amount either. Would he need yearly servicing, especially if all that was being offered was a balanced or managed fund where the fund provider is doing the rebalancing?

If you look at the likes of Cavendish Online you will see their Personal Pension offerings for 0.4% for amounts of £80k. That is the total yearly cost of the provider and a simple balanced or managed fund which will do just the same job as the SJP offering.

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

Once you start getting into higher amounts or the pension is also part of a greater investment portfolio then using a platform SIPP and having an adviser build a bespoke portfolio which requires yearly servicing would be preferable for someone that wants/needs an adviser led product. At that point I would be looking for an adviser that will be able to offer investments from the whole of the market and not a limited range of products that SJP offer.

So yes they are slick and good at promoting their own products, much as you would expect. However they are also expensive and you can do much better elsewhere.

dunstonh

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.

Although the share class available direct is not often the clean class and can work out more expensive.

Compared to this SJP does not look expensive.

You are not comparing contracts correctly though.

but if the total cost of ownership truly is 1.7 or 1.88, then that is not expensive.

Compared to personal pensions at 0.4% then that does look expensive. However, cheapest is not always best as you say but for an inexperienced investor with little interest in investments, SJP is very expensive.

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.

It is well known that SJP are expensive. I do not promote myself as anything. If you had been here longer than 4 minutes you would know that. As I have access to the whole of market I can see cheap options and expensive options. SJP only have expensive.If you knew the market as well as an IFA did then you would know that 0.4% is available as bottom line cost for product/fund. SJP pricing is not explicit. it gives no choice for pricing for ongoing servicing or not.

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.

True that cheapest is not always best. However, you could have 5 of those cheap mixers and the combined life could be much longer than the £30 one. Plus, they are both mixers. They both do the same job and probably do it just as well. Having the choice to look at cheap or expensive but potentially more expensive options is a good thing. However, SJP does not give you that choice.