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

Wildsound

Abspmcn wrote: »

I do not know if I am getting fair value or being ripped off, hence why I have been reading this thread.

You're being ripped off.

Abspmcn wrote: »

My personal financial situation is consequently quite complicated and there is a lot of money at stake so I do value the well rounded suggestions made by SJP.

An Independent Financial Adviser has to be qualified to a standard which means they can solve complicated financial situations. If they have Chartered status and/or years of experience, then what you think is complicated is most likely easy work to them.

Abspmcn wrote: »

Is it worth 1.2% over and above what it would cost me to self invest? I do not know is the honest answer but I do get advise unrelated to my SJP investments.

With the level of wealth you are wanting to be managed, an Independent Financial Adviser would be able to offer you hollistic financial planning to cover every possible need and objective, that's their job!

Abspmcn wrote: »

I need to get a better understanding of these comparables because on this forum most people seem to be suggesting SJP funds underperform.

They will spin the benchmarks in whatever way makes them look good. That's how a business based on vertical integration works. A 20 minute self-learned session on Trustnet will help you to realise that you're being misled.

Abspmcn wrote: »

Like everyone else, I hate the idea of being ripped off.

You're being ripped off.

Abspmcn wrote: »

I do not want to DIY because I am too busy so what more cost effective solutions are there for a fully managed service?

An Independent Financial Adviser.

Unfortunately though, for you and others, IFAs will have to consider all of these hidden exit charges and costs for moving you away from SJP. Those in the early years get stung with such crippling exit charges on the funds (which do scale down over time), that to recommend a transfer could be considered bad advice and so won't do it.

From the information I was given for a client not that long ago, I worked out that if I were to invest £100k with them (even with these so called "favourable reduced initial charges"), if I were to withdraw the money from them instantly, I would be left with just over £81k....

It's a case of once you're hooked, it takes a long long time to get free from the fishing line.

Did I mention you're being ripped off?

dunstonh

Another trend we have seen is an increase in the use of investment bonds with bogus trusts. By that I mean that the trust is valid but the justification for using it is pointless or even bogus. By using an investment bond, it creates exit issues due to tax and its often much harder for an IFA to get you out of these. One may think that is the real reason SJP are using them more.

fred246

A financial advisor putting their own interests before that of their clients. I find that hard to believe.

Flim

My problem is in understanding how impartial FA’s can really be, (regardless of IFA or FA). I was with SJP for a few years and was happy enough with the overall return, but then got cold feet firstly by all the negative press on this forum, and also by the only advice they gave was to just “give me more money”. This may have been th right approach but they never seemed to consider alternative / none SJP alternatives, eg property / premium bonds / NSI index linked etc. We have now changed to another advisor, but at the end of the day what is their incentive to give you advice regarding other options for some of your money that does not actually generate any commission/charges for them?

dunstonh

My problem is in understanding how impartial FA’s can really be, (regardless of IFA or FA)

SJP cannot be impartial. Just not possible. Most FAs cannot be impartial. However, if the restriction is very limited then it is possible. IFAs by definition should be impartial and there is no reason why they wouldnt be.

. This may have been th right approach but they never seemed to consider alternative / none SJP alternatives, eg property / premium bonds / NSI index linked etc

That is because SJP are FAs of their own product range. Not IFAs.

but at the end of the day what is their incentive to give you advice regarding other options for some of your money that does not actually generate any commission/charges for them?

Since January 2013, there is no commission on new business. The client pays the charges and it doesnt matter who the provider is, the invstments used etc.

AnotherJoe

If SJP are charging just 1/2 % more than a comparable IFA and their funds are just 1/2% more than comparable (and both of these are underplaying it) then on 3 million over, say a 30 year investing lifetime, you'll have paid the best of a million pounds more than you need to have done.


Heck even if SJP fund are better performing than their benchmark (which will of course be careful chosen ) they will need to perform a million pounds better than say a tracker, which given all the stats out there, is more than statistically unlikely.

Abspmcn

So what is the solution?

AnotherJoe

Self manage or use an IFA.

OldMusicGuy

Abspmcn wrote: »

So what is the solution?

If I were you, I would not pay excessive ongoing fees based on my pension investments in areas where transactional advice is appropriate and probably better. I would use an accountant for advice on business and some aspects of property, a tax specialist for advice on tax matters and a solicitor for anything to do with trusts. Pay these experts for advice when it is needed rather than pay a large fee to a generalist "wealth manager" (who could never be as good as any of these specialists) on an ongoing basis.

I would then look at managing pension and other investments through an IFA or doing it myself. As you seem to have a pretty good pension provision, I would say moving to a portfolio of low cost funds and managing it yourself would be a cost effective and practical way to do things. But as others have pointed out, using an IFA will give you access to a wider range of investments at a more cost effective rate without you having to manage the investments.

FWIW I used to be in the target market for companies like SJP (earning well, not enough time to do all of this myself, too busy). Once I took the time to understand pensions and investments I realised it need not be that difficult and I did not have to pay a fortune to somebody else to do this for me.

Malthusian

OldMusicGuy wrote: »

If I were you, I would not pay excessive ongoing fees based on my pension investments in areas where transactional advice is appropriate and probably better. I would use an accountant for advice on business and some aspects of property, a tax specialist for advice on tax matters and a solicitor for anything to do with trusts. Pay these experts for advice when it is needed rather than pay a large fee to a generalist "wealth manager" (who could never be as good as any of these specialists) on an ongoing basis.

I would then look at managing pension and other investments through an IFA or doing it myself.

Unless you are a jet-setting multinational with a unique tax position that is beyond the ken of an IFA, paying a "tax specialist" and an IFA is doubling up.

Staying up to date with ever-changing tax rules and ensuring that you are maximising tax-efficiency is one of the basic raison d'etres of an IFA.

Abspmcn wrote:

Sure, I could save tens of thousands of pounds a year in costs if I used a cheaper fund manager but, so far as I can tell, the return on most SJP funds (after costs) outperforms the averages for each sector in which they operate.

You mean so far as SJP has told you. SJP funds are dogs.