SJP advise

silver7

Hi wonder if anyone could offer me any advise re St Jame's Palace? I will try to make this as short as possible, I went to have my will re wrote and was advised to speak with their FA. My situation is i'm 51, divorced and have my 21 year old son living with me. He advised that due to being over the IHT threashold to change the deeds of the house to 51% me and 49% my son? The FA has also put together a portfolio to invest over 100K into managed funds containing 7 funds. He said there would be a 1.5% yearly charge and has left it for me to mull over. On reading the backpage of the paperwork I can see there is a one off charge of £4,500? When we first met he said the advise was free but this reads as our advise is not free? I'm a little confused. I currently have some stocks and shares, LLoyds 5 accounts, maxed out ISA's, premium bonds etc. I have been worrying about the amount of IHT my son will have to pay when somethng was to happen to me but the FA has stated that this fund would not be included in IHT! Any advise would be greatly appreciated. Thanks in advance:o

jimjames

You will have to pay for the advice one way or another, it isn't free although the initial meeting may have been. Rather misleading if you have been told that it was all free though.

£4500 does sound very high but from what I've read here St James Place are known as a high cost provider. Are they actually independent advisers or just selling the products of their bank?

dunstonh

When we first met he said the advise was free

Advice is never free. SJP funds have initial charges to cover the cost of advice.

SJP are tied sales agents. Small fund range, small product range and one of the most expensive going. Typically very slick in marketing. People that tend to use SJP are those that dont care about value for money.

Are they actually independent advisers or just selling the products of their bank?

SJP are not independent. They have a product range that is similar to single company tied agent, such as a bank. Quality is a bit better than a bank product range but cost is in a bit more.

jem16

silver7 wrote: »

He advised that due to being over the IHT threashold to change the deeds of the house to 51% me and 49% my son?

I think you really need to take specialised legal advice on this and that would be from a solicitor rather than a financial adviser. There can be many implications with this regarding IHT and possible care in the future.

The FA has also put together a portfolio to invest over 100K into managed funds containing 7 funds. He said there would be a 1.5% yearly charge and has left it for me to mull over.

Is that a total yearly charge or just what the SJP FA is taking? Since RDR in January 2013, it has been a requirement for advisers to lay out clearly the charge for fund management, platform fee and advice fee. Have they done that?

On reading the backpage of the paperwork I can see there is a one off charge of £4,500? When we first met he said the advise was free but this reads as our advise is not free?

Initial advice on £100k is very steep at £4,500. The adviser should never have said that advice is free as they are not allowed to say that especially since January 2013.

SJP are known for being very expensive so perhaps not surprising. You may be better off looking for an IFA through https://www.unbaised.co.uk.

I'm a little confused. I currently have some stocks and shares, LLoyds 5 accounts, maxed out ISA's, premium bonds etc. I have been worrying about the amount of IHT my son will have to pay when somethng was to happen to me but the FA has stated that this fund would not be included in IHT! Any advise would be greatly appreciated. Thanks in advance:o

What investment are SJP proposing? The only way it can be taken out of IHT is for the investment to be written into trust, possibly through an Investment Bond.

ColdIron

I have a friend that swears by SJP and to be fair they do a pretty good job for him. I met with one of their 'partners' several times and decided not to go with them in the end

Bottom line is they are expensive though their products aren't bad albeit they are rather limited. Beware of one thing, they charge an exit fee if you leave them before 5 or 6 years which is uncalled for in this day and age

silver7

Thanks to you all for the replies. The proposal is an investment bond with AXA,Global Managed and Equity, Invesco, Worldwide, Schroder and International Equity. The FA did say it would be a 1.5% yearly charge and that his share would come out of that. He never mentioned any exit penalties I saw these when reading through the paperwork and he certainly didn't mention the initial advise and service fee of £4,500, also ongoing advise at 0.5% yearly. I will have a look at unbiased and get a couple more views and ideas on my situation.

Aegis

There's a lot wrong here, which is quite worrying given how SJP promote themselves as essentially better than independent...

silver7 wrote: »

Hi wonder if anyone could offer me any advise re St Jame's Palace? I will try to make this as short as possible, I went to have my will re wrote and was advised to speak with their FA. My situation is i'm 51, divorced and have my 21 year old son living with me. He advised that due to being over the IHT threashold to change the deeds of the house to 51% me and 49% my son?

This is very specialist advice and has all kinds of trouble associated with it. For one thing, you're 51 and should hopefully therefore expect to live for at least another 30 years, hopefully more. Giving away half of your main residence at this time therefore seems overly aggressive. In addition, what happens if one of you wants to move? Unless the property remains both of your principal primary residence, capital gains tax could become due at the point of sale. To keep the gift effective for inheritance tax purposes, a market rent might be required, which then has income tax complications.

There are a number of issues here which should be discussed with a solicitor.

The FA has also put together a portfolio to invest over 100K into managed funds containing 7 funds. He said there would be a 1.5% yearly charge and has left it for me to mull over.

Following the Retail Distribution Review these fees should be split into the fund charges and the adviser charges so that you can see how much you are paying. I gather SJP partners are widely ignoring this, however, which makes working out the actual cost of the advice quite difficult on their paperwork. Furthermore, reports I have seen from them recently have no included any mention of their actual costs at all in the main body of the advice. These figures can sometimes be found in the illustrations, but often in very indirect manners.

On reading the backpage of the paperwork I can see there is a one off charge of £4,500? When we first met he said the advise was free but this reads as our advise is not free?

If he said this, he was flat-out lying. He's clearly taking the maximum possible fee from this.

I'm a little confused. I currently have some stocks and shares, LLoyds 5 accounts, maxed out ISA's, premium bonds etc. I have been worrying about the amount of IHT my son will have to pay when somethng was to happen to me but the FA has stated that this fund would not be included in IHT!

I'd be very wary of such a claim. There have been some advisers over the years who believe that investment bonds fall outside a person's estate, but these individuals are mistaken. Unless such a bond is written into trust the assets remain in your estate. If you do choose to create a trust, you lose personal access to the investments for the rest of your life, which at 51 is rarely right for clients.

It might be worth asking which exemption from IHT he is relying on with this advice, as he may also be recommending a trust without making it clear.

Any advise would be greatly appreciated. Thanks in advance:o

It would probably be worthwhile getting a second opinion from an actual independent adviser, especially as there seems to be a lot wrong with how you are being treated by SJP.

xylophone

Take expert advice on your will from a solicitor experienced in wills and trusts? http://www.step.org/online-directory

Have you considered making regular gifts from income/using the gift allowance/ making PETS? http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

Have you considered holding investments/accounts in joint names (both to sign) such that in the event of your death, they would pass by survivorship and your son would have the wherewithal to meet any IHT due? (Bearing in mind that half the money you put into such accounts would count as gifts - it would simply be the case that your son would have access to the assets because they would pass before probate.)

The above said, HMRC do have a "direct payment scheme" - see http://www.hmrc.gov.uk/payinghmrc/inheritance.htm