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

bowlhead99

jimjames wrote: »

Will SJP back that up with a guarantee that they will refund their charges if they don't outperform or do worse than Brewin?

I know this is a rhetorical question because of course the answer's No, but an obvious point to make is that if you go, you would never know whether you would have been better staying, and if you stay, you would never know if you would have been better going, because you don't know what decisions would have been taken with your money at what points.

So all you can go on is guesswork, but the balance of probabilities suggests that for a given risk profile and set of goals, one group is not going to be more than half a percent better per year, unless they have made some lucky guesses on timing, or because they have taken a conservative stance that would have fallen short of the other if the markets had been more positive, or an aggressive stance that would have given you much bigger losses if the market had ended up negative.

Why take the risk of being worse off when you can just stay where you are?

To be honest in most investing situations that is not great advice because it just leads people to follow the path of least resistance. For example I have X fund that may be completely wrong for me but it might be fine and that other one over there might make me worse off so I'll just sit here and do nothing about it.

In this situation though, they are both offering a similar cost, "reasonably popular with people who like expensive products" management service - except one of them wants to charge you a very large fee to get set up with them while in the current place the set up costs are already behind you. The new one might not get better results (that's an unknown) while it will definitely take a great big fee up front that BD don't need to take (that's a known). So, stick to what you know...

Chickereeeee

If average market return is 6% pa, and your advisor is saying SJP can achieve 6.6% pa, then that would be a 10% pa outperformance by my reckoning.....

jimjames

Chickereeeee wrote: »

If average market return is 6% pa, and your advisor is saying SJP can achieve 6.6% pa, then that would be a 10% pa outperformance by my reckoning.....

Very good point.

Puts their claim in context doesn't it! If it was true then everyone would be using them.

OP, is this in writing that they will outperform by that amount? Can they demonstrate it over the last 10 years?

Rotor

Thanks for all the replies - very informative. It seems you unanimously think this is unlikely to benefit me although the FA will do quite well.
I shall talk it over with my wife this evening and decide what to do (or come back here with more questions)


Once again thanks everyone




P.S - Jimjames -no, it is in writing that SJP need to outperform, not that they will

ManofLeisure_2

I've nothing positive to say about this company. Their advertising seems to be quite slick and a few people I know have succumbed to it and had lighter pockets as a result. Had to laugh when an elderly neighbour informed me that he had been invited to St James's Palace. Obviously misreading the word Place for Palace lol.

gadgetmind

I used SJP in the past. I have no regrets as I was in my 20s and sources of information weren't what they are now. However, my spider senses should have been triggered by the fact that the FA I dealt with had an Audi S8 as his daily driver, a Lamborghini for fun, and six other cars including Ferrari F40 in his garage.

IFAs love finding SJP clients as they can easily provide much cheaper options that will perform equally as well. That someone prepared to put in some work themselves can find options for 1/2 or even 1/4 of the ongoing fees that will perform equally as well isn't particularly relevant if you're not prepared to read a few books.

So, I'd recommend you understand your goals, find a good IFA (speak to at least three), and don't be afraid to tell them to sharpen their pencils regards ongoing fees. Up front fees too, but if they find you the right platform/funds, then this should be a one off.

gadgetmind

Rotor wrote: »

P.S - Jimjames -no, it is in writing that SJP need to outperform, not that they will

So, you give me your money to invest, I'll pocket nearly 5% up front and a fair whack pa, invest the rest using my ninja skills, and if it doesn't outperform, then I'll ... keep the 5% etc.

You can get multi-asset, multi-territory, auto-rebalanced portfolios (some reading can tell you why this is good) for a teeny fraction of what you'd be paying SJP. An IFA will want fees but 0% up front and < 0.5% pa is easy to achieve. If you encounter an IFA who can't do this, terminate the discussion and move on to the next.

dunstonh

IFAs love finding SJP clients as they can easily provide much cheaper options that will perform equally as well.

yes we do. Indeed, SJP hold the record for me for cost differences. Over £340,000 difference in the effect of charges over the term. When someone says SJP, you know you have an easy job.

An IFA will want fees but 0% up front and < 0.5% pa is easy to achieve.

It is for £100k plus but harder for sub £100k.

gadgetmind

dunstonh wrote: »

It is for £100k plus but harder for sub £100k.

My wife's £40k SIPP is on 0.3% pa with myself as an amateur at the helm. This is for a portfolio of international equities with a mild small cap and em bias, plus corporate bonds and gilts, property and infrastructure, and a few ITs in other areas for spice.

Even easier would be a private pension via Cavendish.

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/friends-provident1/

0.5% for £50k+ with one web link.

Not hard. Not even slightly hard.

Imagine how much cheaper/better you could get by paying a professional to organise this for you. Given their resources, why would they struggle to achieve 0.5% pa when others find it so easy?

dunstonh

My wife's £40k SIPP is on 0.3% pa with myself as an amateur at the helm.

I thought you said you didnt use an adviser. However, an adviser charging 0.3% p.a. on just £40k is pointless.