St. James's Place - can I do better?

OldMusicGuy

There is a big issue with the concept of "DIY investing". There are really two different ways of DIY investing. One is building a portfolio of single sector funds, maybe throwing in a few shares and other investment vehicles. That really does require a lot of knowledge, and that's where most mortals would struggle. However, the other type of DIY investing is using low cost multi-asset funds and the principles of someone like Lars Kroijer. It's straightforward and definitely not beyond the capabilities of many people.

I used to be in the target market for SJP. A well-paid professional who was "too busy" to pay attention to things like pensions and investing, and who also had the inflated sense of self-worth that would have made me easy prey to "wealth management" marketing. By spending time on here and reading several books, I am now comfortable in managing a large DC pot using three multi-asset funds. It's not complicated, nor is it difficult.

I agree that finding a good IFA can be difficult and it can be hard to know if you can trust them. They ain't cheap either (IMO). But I wish people would always make a decision to go with an IFA or even SJP from a position of knowledge rather than just saying "oh it's all too difficult".

Thrugelmir

OldMusicGuy wrote: »

There is a big issue with the concept of "DIY investing". There are really two different ways of DIY investing. One is building a portfolio of single sector funds, maybe throwing in a few shares and other investment vehicles. That really does require a lot of knowledge, and that's where most mortals would struggle. However, the other type of DIY investing is using low cost multi-asset funds and the principles of someone like Lars Kroijer. It's straightforward and definitely not beyond the capabilities of many people.

How much of your personal portfolio is held in funds invested in UK Gilt funds?

OldMusicGuy

Thrugelmir wrote: »

How much of your personal portfolio is held in funds invested in UK Gilt funds?

Don't know. I'd need to go through the funds and work out the overall percentage.

Thrugelmir

OldMusicGuy wrote: »

Don't know. I'd need to go through the funds and work out the overall percentage.

I wondered if you did follow Lars Kroijer's recommendations. Or had adapted them to a DIY strategy.

OldMusicGuy

Thrugelmir wrote: »

I wondered if you did follow Lars Kroijer's recommendations. Or had adapted them to a DIY strategy.

I'm not following Kroijer specifically. My strategy is more influenced by McClung's "Living off your money" book.

AnotherJoe

OldMusicGuy wrote: »

There is a big issue with the concept of "DIY investing". There are really two different ways of DIY investing. One is building a portfolio of single sector funds, maybe throwing in a few shares and other investment vehicles. That really does require a lot of knowledge, and that's where most mortals would struggle. However, the other type of DIY investing is using low cost multi-asset funds and the principles of someone like Lars Kroijer. It's straightforward and definitely not beyond the capabilities of many people.

I used to be in the target market for SJP. A well-paid professional who was "too busy" to pay attention to things like pensions and investing, and who also had the inflated sense of self-worth that would have made me easy prey to "wealth management" marketing. By spending time on here and reading several books, I am now comfortable in managing a large DC pot using three multi-asset funds. It's not complicated, nor is it difficult.

I agree that finding a good IFA can be difficult and it can be hard to know if you can trust them. They ain't cheap either (IMO). But I wish people would always make a decision to go with an IFA or even SJP from a position of knowledge rather than just saying "oh it's all too difficult".

OMG there's a great article by The Escape Artist on exactly that demographic.
https://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/

OldMusicGuy

AnotherJoe wrote: »

OMG there's a great article by The Escape Artist on exactly that demographic.
https://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/

I know it well. That article, and the Escape Artist's site in general, were key aspects of my education and helped me to be more confident in taking control.

seacaitch

OldMusicGuy wrote: »

A well-paid professional who was "too busy" to pay attention to things like pensions and investing, and who also had the inflated sense of self-worth that would have made me easy prey to "wealth management" marketing.

Self awareness + ego control (humility) are highly beneficial characteristics for an investor to possess.

Should serve you well, and likely already has:

OldMusicGuy wrote: »

By spending time on here and reading several books, I am now comfortable in managing a large DC pot using three multi-asset funds. It's not complicated, nor is it difficult.

To "self awareness" and "humility", I'd add "planning" and "discipline" as core characteristics for successful investing.

Additionally, you need a certain amount of "domain knowledge", ie. facts and details pertaining to the investment realm, in order to know what to apply those core characteristics/skills to.

I do think there's a substantial chunk of people who'd be unable to effectively combine those characteristics and acquire the domain knowledge in sufficient quantities to allow them to invest effectively and achieve a reasonable result*, but I agree that multi-asset funds are the best shot for them - and for most other people - to do so. This type of fund are really good thing IMO, outsourcing much of the complexity of portfolio construction and management, and reducing (but not removing!) the scope for making big, expensive mistakes.

--
* With better financial education, ideally from a young age, (far) more people would be able to plan and manage their own investments, but that's not where we are today.

MancJonny

lpgm wrote: »

@MancJonny - Do you invest? How do you do it?

My situation is a little unusual, I think, for reasons I can't really go into without disclosing / compromising other family members' personal data, so I'll keep it very simple.

I have just one Stocks and Shares ISA with SJP. I understand and agree with everything everyone says about SJP's priceyness - see Holly Mackay's excellent balanced and nuanced summary here:
https://www.boringmoney.co.uk/ask/should-i-use-ifa-for-my-managed-fund/

But because of the general advice I have been given by SJP - on every aspect of my finances - I can say that, in the round, the SJP fees and charges have been well worth it so far. This is particularly so when I calculate that in a few year's time the net yield of the ISA will also probably be more than if I had (say) just put the cash into a bank deposit account. (DIY would have been out of the question; an IFA almost as much so, given the problem of (as I said earlier) even knowing if what they were saying was sound). So what I have lost on the "swings" of the SJP charges I will have more than gained on a bunch of other "roundabouts". (All my "eggs"are most definitely not, nor will they ever be, in the one "basket". The one bit of John Kay's thinking I can follow).

As I say, this is perhaps not typical, and I have been fortunate, but the SJP ISA has been my entry ticket to very, very sound and invaluable financial advice on a whole bunch of other stuff .

To quote from the Mackay article cited above:
"Good financial advice can save people a lot of money in the long-run, and protect you from costly errors.
Yes, and sometimes, in addition to "protecting you from costly errors" it may also open-up other financial possibilities that you didn't even know were there.

On the whole, it's maybe best summed-up by the final post here:
https://www.pistonheads.com/gassing/topic.asp?h=0&f=92&t=1748556

Finally, to end on a lighter note: dunstonh's jibe about SJP being cult-like strikes me as weird. I mean, would you buy an ISA from this famous (and sincere) cultist?:
https://www.youtube.com/watch?v=UFBZ_uAbxS0

Here come the jokey reples . . . .

Mark_Willis

First of all, SJP in comparison are not that expensive, they are however very transparent and honest about their costs which sometimes goes against them because the lack of understanding and complexity either appears to be expensive or just confuses people.


I have worked for a number of firms including an IFA, a large wealth manager and SJP. Every firm charges differently and the way they disclose their costs is always different. For example lets take a pension transfer, most IFA's will offer a free consultation, then an upfront % on transfer maybe in the region of 1 - 3%, then there will be an ongoing advice cost (annually maybe 0.5 - 1%) that pays for annual reviews, then there will be the actual fund charge of the investment fund you are in that pays for the investment management that can vary greatly, then there will be a product fee that pays for the 'pension wrapper' you are in lets say XXX Life who hold your pension, that's another annual %. There may also be transaction costs and other miscellaneous fees.


Now from my experience, some of the smaller firms I worked for in the past lets just say aren't as forthcoming with their charges in the beginning. They might tell you their upfront cost only and skirt over the other stuff, until you realise a year later at your next review and start querying what they are. By all means not all IFAs do this and i'm not for one minute saying they do, but I have experienced it more in that world more than I have with the big wealth managers.


SJP do have an early exit charge with their pension, however the upfront % that an IFA would normally take as a chunk of your pension on transfer, isn't taken by SJP. This means 100% of your pension fund is invested, and you are not losing out on investment growth on that amount of money you have lost. The upfront cost that SJP would have incurred is instead staggered over a number of years, rolled into the annual costs, that are usually not much different to what anyone else is charging anyway. To me this is a much more efficient way of charging than the usual way, you aren't losing a chunk on transfer, aren't losing investment growth on that, and you are gaining access to a multi billion £ FTSE listed company rather than Mr X one man band down the road.


Lets take the expertise you are getting for your money, at SJP and other big corporate wealth firms, you have full teams dedicated to what they do best, whether that be an investment committee monitoring the investment managers managing investments, financial planners seeing clients, compliance teams reporting to the various bodies. This bears the question, that can a smaller firm or one man band really cope with doing all that on their own or are they cutting corners somewhere? Is there really enough time in a day to keep up with all of that to the standard that SJP can? Do they offer an advice guarantee like SJP do?