F A wants to move me to St. James's Place fund management

Rotor

Our Financial Adviser has linked themselves to St. James's Place and is recommending we move our managed funds from Brewin Dolphin, where it is now, to St. J P.


I believe the management fee (currently 1% ) will stay the same but the transfer charge is 4.5%


By his calculation he states that over a 10 year period ( the likely minimum investment time) St. JP will need to out perform Brewin Dolphin by 0.6%/year to make it cost neutral. This he believes will be more than met.


His rational (sales pitch?) is that St. JP don't employ their own investment managers but uses " independent experts, Stamford Associates. in the selection monitoring and changing of these managers"


So - is 0.6% + a reasonable assumption or is the move just a churn?


Thanks

Your_Hero

Sadly, I'm inclined to think that your instinct was right. He is most probably looking to churn; 4.5% is extortionately high for initial fees (he has no say on this, it is fixed by SJP). SJP are a big name but they are also known for high fees and ongoing management costs.

Also another thing to note is that he is now a restricted FA since he is with SJP so he is there to sell you SJP products regardless of whether they are good or not. It may be advisable to continue using Brewin Dolphin who are DFMs or you may wish to find an IFA instead (unbiased.co.uk is a good place to look).

Linton

I am somewhat bemused by the numbers of people apparently involved
It seems to me that....

1) There are raw investments eg shares
2) There are funds where fund managers decide which raw investments to buy usually focusing on a particular sector/investment type.
3) there are FAs who advise on what mixed of sectors is appropriate for a customer's particular circumstances, and what funds should be used to access those sectors
4) In promoting Stamford Associates via StJP your FA seems to be advising on which FAs should be used to used to advise on what funds should be purchased.

(2) and (3) seem to be reasonable activities leading to the most appropriate investment choice for an individual. (4) seems one level of advisor too many unless you have a very large investment pot (£Ms).

Mistermeaner

Linton wrote: »

I am somewhat bemused by the numbers of people apparently involved
It seems to me that....

1) There are raw investments eg shares
2) There are funds where fund managers decide which raw investments to buy usually focusing on a particular sector/investment type.
3) there are FAs who advise on what mixed of sectors is appropriate for a customer's particular circumstances, and what funds should be used to access those sectors
4) In promoting Stamford Associates via StJP your FA seems to be advising on which FAs should be used to used to advise on what funds should be purchased.

(2) and (3) seem to be reasonable activities leading to the most appropriate investment choice for an individual. (4) seems one level of advisor too many unless you have a very large investment pot (£Ms).

Agree completely, I find it all bamboozling and think there are a lot of sharks just skimming off all this. I rejected nationwide in favour of virgin for a basic ftse tracker isa on basis of upfront charges and I thought nationwide could be 'trusted'

Could be wrong but if any of these guys had the answers why are they selling advice instead of just growing their own money? It's a bit like people selling a gambling system instead of just using it

With no financial l knowledge I actively manage a small investment portfolio with zurich, basing decisions on fund stats, diversification both geographic and sector and by investment company. Could be lucky and wheels might fall off but managed 15pc return in 2013 and ytd 20pc 2014

Perhaps give me your money?

dunstonh

SJP seem to retail as if the RDR never happened.

Expensive, limited. Very glossy and flash.

rejected nationwide in favour of virgin for a basic ftse tracker isa on basis of upfront charges and I thought nationwide could be 'trusted'

Virgin are expensive and Nationwide were tied to L&G.

Could be wrong but if any of these guys had the answers why are they selling advice instead of just growing their own money?

You need money to make money. You work to earn money.

Rotor

Thanks for replying all of you!
Writing this has prompted me to read through the notes from the FA again.
It's not 4.5% initial charge ; it is in fact 5%
I 'think' the annual charge is 1.5% as well - does this sound right?

Mistermeaner

dunstonh wrote: »

SJP seem to retail as if the RDR never happened.

Expensive, limited. Very glossy and flash.



Virgin are expensive and Nationwide were tied to L&G.



You need money to make money. You work to earn money.

Hi

What makes you say virgin are expensive?

I fully admit to be very green a bout all this but from the brief research I did for a basic ftse tracker share isa they seemed most competitive and simple (from memory 1pc charge)

Who would you recommend instead?


Thanks

Thrugelmir

ggb1979 wrote: »

Could be lucky and wheels might fall off but managed 15pc return in 2013 and ytd 20pc 2014

Perhaps give me your money?

Over the past 65 months it's been nigh impossible to lose money. Though the wind does seem to changed direction. With a raft of poor corporate results more recently. Suggesting that forward valuations have become stretched.

Thrugelmir

Rotor wrote: »

It's not 4.5% initial charge ; it is in fact 5%
I 'think' the annual charge is 1.5% as well - does this sound right?

Ouch.......:eek:

jimjames

ggb1979 wrote: »

Hi

What makes you say virgin are expensive?

The fact that they charge around 3x to 4x what other companies do for the same product.

That sounds expensive to me.

You can get trackers for 0.07% pa plus platform fee. Virgin charge 1% for the same thing. I think you need to do your research again. Even HL that are considered expensive will be around half the cost of Virgin.

Rollinghome

ggb1979 wrote: »

Hi

What makes you say virgin are expensive?

I fully admit to be very green a bout all this but from the brief research I did for a basic ftse tracker share isa they seemed most competitive and simple (from memory 1pc charge)

Who would you recommend instead?


Thanks

Almost anyone but Virgin really. Mr Branson's charges are a complete rip-off.

Use a platform such as Cavendish/Fidelity, Charles Stanley Direct or even the rather expensive Hargreaves Lansdown and you'll find a wide choice of FTSE trackers from HSBC, Vanguard, L&G, Blackrock etc. with an annual charge (TER/OCF) of 0.1.% - 0.20%. On top of that you'll pay a platform fee of 0.25%-0.40%.

Or if you really wanted to buy direct, L&G for example would charge an OCF of 0.56% for their all share tracker.

More info for you at http://monevator.com and performance figures at www.trustnet.co.uk. Paying double the going rate to Mr Branson will seriously damage your wealth.