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

msallen

Regretting becoming a salesman for them already Mark?

Aegis

Mark_Willis wrote: »

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.

Doing this would be a breach of MIFID II, which requires all advice costs to be clearly stated at the point of advice in both percentages and pounds, including both initial and ongoing costs. On the other hand, SJP are well known for using AMC instead of OCF, for not mentioning charges at all in suitability letters but instead relegating such charges to the product illustration, failing to make clients aware of things like the early exit charges, etc.


I've reviewed advice given by SJP with prospects that became clients because they had never had the charges for proceeding with an investment recommendation explained to them at all. The illustration appeared to contain no information about initial costs, relying on the use of the Reduction in Yield table to guess how much was actually being levied. Needless to say, that client did not implement SJP's recommendations.

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.

This is called "factoring" and for everyone else it was banned by the Retail Distribution Review because of the potential for poor client outcomes. How SJP gets away with this sort of internal commission system, I don't know.

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?

Yes, smaller firms than SJP can handle that quite easily. Yes, there's more than enough time in the day to reach a standard equal to or greater than SJP. Yes, everyone offers advice guarantees - it's called a complaints process.

SonOf

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.

Very funny. You forgot your smiley to indicate your sarcasm though.

It has been said a number of times before that if you work for SJP you will either leave before the brainwashing takes effect or you will stay and become a drone.

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?

What complete and utter BS. Indeed, your whole post was. It is full of brainwashed marketing.

All advice firms have an advice guarantee. Most firms dont mention it because it is a regulatory position that regulated advice gives you consumer protection. Only SJP promote it as a feature. Perhaps as they have so little going for them that the barest minimum is all they offer.

SJP are the least transparent charing company going. We frequently see SJP reps trying to make out they are undercutting the charges disclosed by the IFAs by using AMC instead of OCF and not showing transaction charges or incidental charges. All requirements under MIFID II. We had a case not too long back where SJP wanted an initial charge of £25,000 for investment advice versus our fee of £2,500. When the person told SJP of our charge, the sales rep dropped the initial charge to match us. They couldn't match the OCF but tried to by using AMC only to give a false impression their ongoing charges were lower. All sales techniques and uncompliant.

OldMusicGuy

Mark_Willis wrote: »

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.

Ah yes, those same self-proclaimed experts that thought Neil Woodford would be great as a fund manager......

Just Google SJP and "dog funds" to get another view of what this expensive "expertise" actually gets you.....

DrSyn

Does anyone get the impression that this forum may be getting under the skin of SJP.

pafpcg

There's an issue here that puzzles me.

I've never had any dealings with SJP (other than their mailings which have gone straight into the recycling bin) but during the last few years I've been made aware via this forum that SJP have a reputation for slick marketing, a restricted product range and high charges.

There are well-argued posts above, clearly from qualified financial advisors, giving evidence that SJP are allegedly operating outside the requirements for financial advice (for example "using AMC instead of OCF" and "a breach of MIFID II"). Why has the regulator policing these requirements not acted to bring SJP into compliance? Or are these requirements just optional? Or even non-existent? Or is this a case of one sector of the industry trying to blacken the reputation of an overly-successful competitor? Clearly something's wrong at the top of this profession's regulation.

SonOf

Why has the regulator policing these requirements not acted to bring SJP into compliance?

Regulator is sluggish and there will almost certainly be no evidence to back it up. The documentation audit trail will show everything that is needed. Its the conversation and non-official documentation that misses it out.

We have also seen a trend of SJP reps using investment bonds with little justification (really minor reasons of the sort you have to be desperate to use). Some of us believe that this is to prevent IFAs from being able to unwind bonds due to the tax issues they create. Effectively, leaving the person stuck at SJP.

Or is this a case of one sector of the industry trying to blacken the reputation of an overly-successful competitor?

In 2013, the RDR came out and banned commission and adviser charges had to be front loaded. i.e. paid at the outset and not factored into the life of the plan or over a period. Charges had to be unbundled to show the adviser charge, platform/product charge and investment charge. The FMAR and MIFID II expanded upon these giving extra layers of disclosure.

In 2019, SJP has bundled pricing and charges that are factored in over a period (e.g. exit charge). They are not breaking the rules as they are the sales force, the product provider and the investment company. They are known as a vertically integrated provider. However, it is not in the spirit of the rules and does allow for unscrupulous individuals to manipulate information. And, as recent media articles have mentioned, SJP sales reps get a lot of sales technique training. They are a throwback to the old days of Allied Dunbar. Or Allied Crowbar as it was known. i.e. a single company salesforce using strong sales techniques to get as many sales as possible. The industry has moved away from sales, especially on the IFA side. So, you effectively have the non-sales side wondering how the SJP still get away acting like a 1990s salesforce.

We had a new potential client who was focusing on costs and was discussing using SJP as well. We gave the adviser charge, platform charge, OCF, TC and other charges columns and the total. We knew we were cheaper than SJP. The client then told us SJP were cheaper. When I asked for the SJP breakdown I was given just the AMC. The client said that the SJP rep had seen our charges and told her that IFAs cost more as they have all those charges and you have to pay them as well but we only have one charge. The reality is that we used the MIFIDII layout and the SJP rep used a method that hasn't been used in 5 years along with a sales technique to make it look like ours was more.

We used that method on the pension, ISA and unwrapped. The rules do not require you to use that method on pensions but it looks a bit daft if you are not consistent. The charges are all the same on ISA, GIA and SIPP but its just the disclosure that is different. However, the SJP rep got away with it as he gave the example using only the pension. So, it wasnt a breach. It was a technique to get away showing less within the rules. If the client had proceeded with SJP, the full disclosure would be on the documents. But as there would be dozens or even hundreds of pages of small print and text, the average consumer isnt got to spot it.

Clearly something's wrong at the top of this profession's regulation.

It micromanages the insignificant whilst missing the significant.

SeniorSam

An interesting Review of St James Place has recently been posted on You Tube. It can be reached with this link for anyone interested
https://www.youtube.com/watch?v=F-UP-XDUPWM

DrSyn

SeniorSam wrote: »

An interesting Review of St James Place has recently been posted on You Tube. It can be reached with this link for anyone interested
https://www.youtube.com/watch?v=F-UP-XDUPWM

Anyone who thinks of using SJP should watch this.


Even more expense than HL :eek:

Zomoniac

Our SJP adviser quoted us 5% up front and skimmed from all future deposits, and a 1.8% annual fee.

I don't think we'll be going with that somehow.