Saint James's Place

jaybeetoo

You can do the maths on the impact of charges https://www.thisismoney.co.uk/money/diyinvesting/article-1633426/Isa-fund-charges-calculator-How-fees-affect-returns.html

SonOf

ColdIron wrote: »

IFAs do not charge a 5% initial fee or up to 6% exit fees

Indeed, IFAs are not allowed to charge exit fees and the regulator calculated average (based on actual business placed during the period of review) found 1.8% was the average initial.

Sue58

MPN wrote: »

I moved my pension from SJP to my own SIPP some time ago, however my wife's pension remains with SJP in just 4 funds.

She last received a statement from SJP on the 18 September 2018 and the value was £155,250 and as of close of business yesterday the value of the funds is now £166,460 so in the past 10 months it has gained £11,210 after all charges. Bearing in mind the market corrections from last October to the New Year she is very happy with the current value. I suppose it not all doom and gloom with SJP as I'm sure there are many other clients that are happy with them rather than DIY and get it totally wrong.

SJP do have a very bad reputation for high fees/exit fees etc but I must agree that their funds can’t be as bad as some people suggest because I have two friends that use their services and as per your wife they are extremely happy with the performance of their funds. They also say the customer service and advice side is very good.

Purely out of interest would you mind me asking which 4 SJP funds your wife is invested in?

jaybeetoo

For many people SJP is a “safe”, easy option. They remind me of Allied Dunbar.

Having tried to find an IFA myself, I gave up and now do the investing myself. If you don’t want to do the investing yourself then SJP can seem a good option. They won’t be exciting, they’ll be expensive but they’ll do a job.

MPN

Sue58 wrote: »

Purely out of interest would you mind me asking which 4 SJP funds your wife is invested in?

No problem at all the funds are - International Equity, North American, Global Managed and Greater European.

SonOf

MPN wrote: »

No problem at all the funds are - International Equity, North American, Global Managed and Greater European.

And what investment structure does it have as that is a strange mix of funds to hold.

gm0

As I have posted previously - I have tried SJP also and did a >5 year back test on a like for like asset class compare UK equities on my existing occupational scheme performance (at the time this was an L&G UK FTSE All Share passive tracker @ 0.04% charge, no platform fee (employer) vs the SJP fee structure and an Active UK equity fund (which was in their pension plan mix at the time).

In parallel I ran an SJP small pension for a few years for a family member and "tasted" the service before considering transfer of my own DC pot. The UK compare was done using the contracted charges and Morningstar data based on what I had in terms of unit price data and performance reports.

Following the experiment - I am not going to transfer my DC pot to them as the portfolio management/active manager excess returns ("achieved alpha net of fees") don't justify it.

Their "Adventurous" active pension fund" variant also had a lot of emerging markets in it at the last rebalancing discussion due to management and portfolio drift - quite a lot more than I had expected and it turns out I don't like active management of that magnitude happening invisibly i.e. I need more transparency about what I an holding and the size of any active bets more under my control. Useful experiment in that regard.

My own 5 year UK performance analysis was a wash. Net of fees it wasn't better and any gains due to any extra risk and volatility taken on had been eaten by SJP and the active fund manager and not by me. They clearly had generated some return as the fee compare was a tough one for them (FTSE All share TR - 0.04% annual) but they had eaten the lot. This is partly down to the UK active equities fund used which was good originally and a bit of a dog later.

Although challenged the SJP back office have not been able to provide an alternative net of fees analysis which shows anything better i.e. for other fund selections or asset classes (US, Europe, global etc.). This is not surprising given layered charges and SPIVA results on active vs passive.

If you or I were engineering an SJP business you would not want to miss the index after fees by too much (as people would gripe and vote with their feet due to sustained -ve alpha. So about the market return or lagging just a little with a volatility element (after their hefty fees) is a sensible place for them to stand and take their cut. Dial up the risk to suit. Maximum milk. Minimum moo.

But the returns comparison was OK. It's just I was carrying different risk profile to achieve the same net result and their rake was indeed a lot larger. So does that make sense for me ? Likely not. The compare was 2012-2016 so broadly during a sustained bull market

The other key issue that is rarely highlighted in FA / IFA / DIY critique hereabouts is the individual advisor trust issue. If you have an SJP sales partner (often ex IFAs due to market changes) and value their skills (financial and customer management) or their past advice, and have built up a trust relationship with them - then this has a value (not enough for many to justfy 40 years of SJP fees but a value nonetheless). Actual IFA would charge less - for a new relationship go and find one and establish the same level of trust - effort in selection and time in operation to achieve. This is no different in this aspect to dealing with small firm independents. Finding a good one, dealing with employment changes/retirements if the relationship shifts and the "value" of the service is in doubt. Do you stay or follow the individual.

As I have said before on other threads. SJP feels to me to be like buying an Audi. Some people like them and value the experience. Well upholstered. A Skoda or a Seat is largely the same product and is cheaper and will get you there just the same.

MPN

SonOf wrote: »

And what investment structure does it have as that is a strange mix of funds to hold.

My wife is still working so is happy to hold 100 per cent equities in her SIPP at the moment. We also have a good cash buffer in case of any problems or market downturns. She selected these funds in consultation with her partner/advisor at SJP.

reeac

[QUOTE=bowlhead99;76001520

If you go to Waitrose or M&S Simply Food for your groceries, you still get nutrition and probably won't get food poisoning, but the people buying their chicken fillets from Aldi or Asda can say the same and have more money in their pocket at the end of the month, even though the carrier bags don't have the same 'status' when they run into their friends & colleagues.

This is a money saving site after all, and SJP don't really save you money over independent advised options. No doubt they can save you money compared to DIYing badly, so if DIYing badly is a potential option, you're not stupid to stay with them. Just perhaps a little naive to not shop around for someone cheaper who would also remove the risk of you DIYing badly.[/QUOTE]

Not sure that you're comparing like with like with your supermarket analogy. We are confirmed Waitrose people although, as a result of shopping whilst away from home we have a couple of Tesco bags and even had to shop in a Lidl (or was it an Aldi?) once but 1. Couldn't care less what the bags say on them. 2. It's highly unlikely that the unbranded food is of comparable quality. We actually buy meat from a proper butcher, bread from a proper baker and fish from a proper fishmonger anyway.
As for finance we are HL people as at least they answer promptly and I can understand them if I phone them, unlike the staff from the two building societies which we have just abandoned in favour of a local non-demutualised one. Good service, like good food, is worth paying for in the long run.

SonOf

MPN wrote: »

My wife is still working so is happy to hold 100 per cent equities in her SIPP at the moment. We also have a good cash buffer in case of any problems or market downturns. She selected these funds in consultation with her partner/advisor at SJP.

a) she shouldnt be selecting funds. That is what she is paying SJP for.
b) the fund selection appears to lack structure or recognisable method. I suspect its a bit of "lets put x% in there, and maybe y% in that one and how about z% in that one....". That is very 1990s

Structure and method is quite important when it comes to building a portfolio. Random percentages into funds is unlikely to work out best.