IFA Advice

MPN

SJP are very expensive, I used to be with them for quite a few years before I went DIY.

In all honesty, there is nothing wrong with some of their funds, I was perfectly happy with the returns I received and they more than matched other popular funds regularly mentioned on this forum. The ukmoneysite reviews are critical of most companies but they themselves are trying to sell you advice so I would be careful.

SJP charges are high and exit fees do exist for 6 years on pensions so after a lot of research I decided to DIY. Initially, I made some mistakes, however I now feel happy with my choice.

Chudders

MPN wrote: »

SJP are very expensive, I used to be with them for quite a few years before I went DIY.

In all honesty, there is nothing wrong with some of their funds, I was perfectly happy with the returns I received and they more than matched other popular funds regularly mentioned on this forum. The ukmoneysite reviews are critical of most companies but they themselves are trying to sell you advice so I would be careful.

SJP charges are high and exit fees do exist for 6 years on pensions so after a lot of research I decided to DIY. Initially, I made some mistakes, however I now feel happy with my choice.

Thanks, I was weary of the report as wasn't sure how 'independent' it was, or wasn't, but ultimately I'm assuming they cant just make things up, and I've compared the actual 7 funds advised for us, and on this report and 5 of them significantly underperformed against the 5yr average sector growth. Assuming I can rely that these figures aren't just made up, that is worrying to me.

Biased/harsh/unfair external reports aside though, presumably the funds offered by sjp have no likelihood of growth over and above anything I could be offered by an IFA to warrant the extra fees? And it sounds as though they done actually offer anything extra in terms of service/advice/management/hand holding that I could get by paying an ongoing (much lower) fee to an IFA?

bowlhead99

As per MPN's comments, you should be aware that UKmoneysite basically exists to sell you a data service which helps you to become convinced that whatever popular funds you are in, you could have done better if only you have access to the data that they sell. It would perhaps be enlightening to take the several thousand funds that appear on free data sites such as Trustnet.com or Morningstar and see how many of them "significantly underperformed against the average'. Likely a large proportion, or the ukmoneysite would not be seen to be making a compelling case for its expensive service offering. The truth about whether those funds are fit for purpose no doubt needs better scrutiny. The figures on the SJP funds might not be 'just made up' but perhaps metrics about industry averages are - or myths about how you would have chosen those better performing funds if only you had an exclusive subscription service showing you the way

It's like if you get cold called by someone offering you a free pension review - no matter what you are invested in or it's suitability for your needs, surprise surprise you'll be told that you are underperforming and should see their adviser for a free initial consultation and then a hard sell about signing up with them to make all the necessary changes... I digress.

If most of them really underperformed against the five year 'sector average' then either they are a poor set of funds or the five year period is not representative of an entire economic cycle, or alternatively the sector that the website puts them in is perhaps not an appropriate sector or too broadly drawn. Certainly the goal of the funds will not be to deliver the 'sector average' performance anyway.

Based on previous IFA feedback here, it's quite possible to invest in similar assets without incurring the SJP layer of fees at fund, platform and adviser level. It might be that IFA/ platform / fund combination beats SJP aggregate costs, or maybe ultimately you get similar costs with the extra comfort that you are actually getting a solution from the entire market and not just the limited list of tied products that SJP are allowed to put you in. But typically I hear it's the former (lower overall fees ; same quality of assets).

One of the partners in my firm uses SJP and says that they do a good job (like your relatives he has made money with them). But he has as much money as he needs to be comfortable and is perhaps not as cost conscious as those of us people at the more normally-paid levels of the organisation

And it sounds as though they done actually offer anything extra in terms of service/advice/management/hand holding that I could get by paying an ongoing (much lower) fee to an IFA?

At the end of the day they are out to give you advice to make money for their company. So are independent IFA firms. Despite certain IFA "success stories" the average person is probably not going to shave 90% off the annual advice costs and fund costs per year. Both SJP and IFA are are working within regulatory constraints and will buy in research or develop in house resource to ensure you're not invested in something completely inappropriate. And the specific individual you would work with at the IFA might be more difficult to get along with than the chap from SJP.

However, the IFA will not have to pick only from their internal tied offering, instead has free reign to choose cheaper funds or charge you less for the advice. Even if costs were the same that would be a huge positive

Chudders

Thanks, that is basically what I wondered about the reports.

Like you say, regardless of fund performance though, it would seem the overwhelming concensus is that we could get the same level of service/advice elsewhere at a cheaper price with wider/better choice of products being offered.

Seems like a no brainer, and if we were just investing from scratch, but we have the additional complexities of the pension fund which they manage, and when the time comes for further inheritance, that is also in all sorts of trust wrappers managed by sjp (there is likely to be zero chance of mother in law moving away from them even if we decide to), so we need to decide how much we're prepared to stand, knowing we're overpaying for a potentially inferior product for the sake of not upsetting the apple cart by ditching them.

As an aside, does anyone know anything about when a cooling off period starts? We received the initial advice at a meeting on 8th Feb, this was basically him briefly going through our financial position and recommending the isa. The follow up meeting yesterday he gave us the letters confirming the advice, and briefly (but not clearly) told us what it would cost, and we foolishly (I know, I know) signed. They've emailed today to say the isas are set up and given us the bank details and reference numbers to deposit the funds. Does our 2 weeks we have to change our mind start on the 8th when we first met, or yesterday when we signed?

chrisgg

Chudders wrote: »

We have done some research, and aside from the negative press, and general consensus that their fees are high, the other thing that concerns us greatly is that I found an 'independent' report on the performance of SJP funds (not sure exactly how independent it is!) by ukmoneysite and 5 of the 7 (all SJP own managed) funds they have selected for the Isa performed badly vs benchmark/sector average in the 5yrs to 2017. This obviously worries us.

I've come across this https://www.ukmoneysite.com/blog/st-james-place-investment-funds in the past as a family member is invested with SJP, and I can only describe it as utter crap.

It is ridiculous to use the top performing fund in each sector as a benchmark. This would make 100% of portfolio's in the UK look bad. A truly transparent approach would be using the IA sector averages instead. For example, you can't call the SJP Gilt fund crap because it's underperformed a long dated gilt fund, which is no doubt of far higher risk.

It implies that SJP only invest in internally managed funds, which highlights a total misunderstanding of their investment offering. SJP set up their own funds then outsource the management to external fund managers. Neil Woodford runs the SJP Equity Income fund, alongside his Woodford funds. However, if they decide they no longer want Woodford running it, they can replace him with another manager. The fund will still be called SJP Equity Income.

There are many valid reasons for avoiding SJP, but in my experience, cost is the main one, followed by their Partner Practice's tied status, as their performance is generally decent.

Fatbritabroad

dunstonh wrote: »

Percentage fees need to be viewed in context. i.e. the monetary amount.

2% of £50,000 is £1000. That's fair enough. 2% of £500,000 is £10,000. That is disgracefully high.

The best pricing models see the percentages getting tapered down or the increasingly popular cap and collar model (i.e. percentage but subject to minimum and maximum).

As a comparison a family member has just passed away and his widow has 470k to sort out of which all but 100k will be invested. Initial charge a fixed 1500 for the advice . Ongoing management 0.5% and that includes sorting out a pension that a previous Ifa has put in to over 100 different funds! To be fair this is a slight favour from the Ifa who I know but her normal charges wouldn't have been drastically more. There will obviously be funds charges but a core element will be trackers so these won't be too high

Chudders

chrisgg wrote: »

I've come across this https://www.ukmoneysite.com/blog/st-james-place-investment-funds in the past as a family member is invested with SJP, and I can only describe it as utter crap.

It is ridiculous to use the top performing fund in each sector as a benchmark. This would make 100% of portfolio's in the UK look bad. A truly transparent approach would be using the IA sector averages instead. For example, you can't call the SJP Gilt fund crap because it's underperformed a long dated gilt fund, which is no doubt of far higher risk.

It implies that SJP only invest in internally managed funds, which highlights a total misunderstanding of their investment offering. SJP set up their own funds then outsource the management to external fund managers. Neil Woodford runs the SJP Equity Income fund, alongside his Woodford funds. However, if they decide they no longer want Woodford running it, they can replace him with another manager. The fund will still be called SJP Equity Income.

There are many valid reasons for avoiding SJP, but in my experience, cost is the main one, followed by their Partner Practice's tied status, as their performance is generally decent.

Thanks for your reply. I was reading the report with the mindset that it may very well be from a biased source, which has been confirmed to me now by others, so I will take that on board and take the results with a pinch of salt.

I wasn't however, basing the performance of the SJP funds against the top performing sector funds performance, and neither does the report, it does show that, yes, but it also bases it against "5 year average sector growth" and "5 year growth ranking" within the sector which is the part I was looking at, although I will readily admit, I'm out of my depth and not entirely sure what I'm looking at!

That said, yes you are right, cost, and the restricted offering is the main issue.