IFA moving to St James Place

littlemoney

Had a letter from my IFA to say they are becoming a partner practice with St James Place.


They say that all exisiting business will remain in place and they will monitor my investments and facilitate any changes when appropriate. Previously they monitored my investments within its current platform and when parts were under performing switches were made in the platform.


Am I being cynical to think that if there is a performance issue in the future they will say to move to a St James Place product and thereby get their bonus or will they still be able to make changes within the existing platfrom as it is not new money?


Have read some of the comments about St James Place I am concerned enough to think about a new IFA but I am nervous about doing so as how do I find a good one?



I don't feel confident enough to try DIY investment but am very worried about St James Place Wealth Management.

Aegis

littlemoney wrote: »

Had a letter from my IFA to say they are becoming a partner practice with St James Place.


They say that all exisiting business will remain in place and they will monitor my investments and facilitate any changes when appropriate. Previously they monitored my investments within its current platform and when parts were under performing switches were made in the platform.


Am I being cynical to think that if there is a performance issue in the future they will say to move to a St James Place product and thereby get their bonus or will they still be able to make changes within the existing platfrom as it is not new money?

Worse yet, the only products your adviser will be incentivised to advise on and move you into will be SJP products, and by all accounts they will be very significantly pressured to move you - often at full cost - into their restricted investment range.


I see stories about these moves regularly and always question why the former IFA has made the decision. It surely isn't for their clients' interests, as they're moving from whole of market to highly restrictive, so my conclusion is that they think that they will be better off themselves. I doubt this is in the least bit in your interest.


Obvious caveat about listening to someone with skin in the game!

SonOf

SJP has a pretty good remuneration structure for an IFA looking to retire in the near future. So, maybe that is the reason. Indeed, the only reasons why an IFA would go to SJP is if they are considering an exit in the forseeable future. It certainly isn't in your interests.

They say that all exisiting business will remain in place and they will monitor my investments and facilitate any changes when appropriate. Previously they monitored my investments within its current platform and when parts were under performing switches were made in the platform.

Existing business is able to continue and they can collect fees on it. However, they cannot place any new business that way and cannot make changes on it unless it moves to SJP.

Most IFAs on a servicing arrangement will move money between providers/platforms and funds when its in your interests and at no cost to you as that falls under the servicing fee you pay. With SJP, you can bet your life they will try and get an initial charge on it.

Am I being cynical to think that if there is a performance issue in the future they will say to move to a St James Place product and thereby get their bonus or will they still be able to make changes within the existing platfrom as it is not new money?

It is inevitable that this will happen at some point unless you are in a tax wrapper that cant do it (such as an onshore or offshore bond).

Have read some of the comments about St James Place I am concerned enough to think about a new IFA but I am nervous about doing so as how do I find a good one?

You should be considered a new IFA. That or DIY. Those are the only options that should be considered. SJP shouldn't feature at all.

With IFAs, that issue isnt whether they are good or not. Most do the job perfectly fine and without issue. The main issue with IFAs is cost. It varies significantly. A secondary issue is that some IFAs are transitioning to "wealth management" and use external investment processes but charge you (often more) in the process despite them actually farming out the investment process. Many of these should be FAs rather than IFAs but they hold on to the IFA tag as long as they can. These firms tend to the larger regional/national firms rather than a local general practitioner IFA firm. So, a general rule of thumb, that is not always accurate but a guide, is that if the firm was "wealth management" in its name, you should avoid it.

newatc

I understand the logic of using an independent FA rather than a restricted one. But isn't it a pretty much a given that any Financial Advisor (restricted or not) is going to give his business and revenue high priority which, while hoping that his clients will benefit, will trump that of the client's.

Linton

newatc wrote: »

I understand the logic of using an independent FA rather than a restricted one. But isn't it a pretty much a given that any Financial Advisor (restricted or not) is going to give his business and revenue high priority which, while hoping that his clients will benefit, will trump that of the client's.

Couldnt that be said about anyone in business, even your good self assuming you are employed?



A good businessperson will know that focussing on their client's benefits will in the long run lead to business and revenue benefits.

atush

newatc wrote: »

I understand the logic of using an independent FA rather than a restricted one. But isn't it a pretty much a given that any Financial Advisor (restricted or not) is going to give his business and revenue high priority which, while hoping that his clients will benefit, will trump that of the client's.

Not really, no. They want clients happy as happy clients invest more, and recommend them to others.

Audaxer

littlemoney wrote: »

Had a letter from my IFA to say they are becoming a partner practice with St James Place.


They say that all exisiting business will remain in place and they will monitor my investments and facilitate any changes when appropriate. Previously they monitored my investments within its current platform and when parts were under performing switches were made in the platform.

Does that mean that the IFA can no longer call themselves an Independent FA? Surely they should have advised clients of this in the letter they sent to their existing clients, and advised that they are now restricted as regards products, and that there will be a different cost structure being put in place regarding clients' investments?

SonOf

newatc wrote: »

I understand the logic of using an independent FA rather than a restricted one. But isn't it a pretty much a given that any Financial Advisor (restricted or not) is going to give his business and revenue high priority which, while hoping that his clients will benefit, will trump that of the client's.

As clients pay the IFA fee. Not the providers, then the fee is the same irrespective of which provider an IFA may use. So, there is no potential conflict in that respect.

The issue comes when an IFA gives up and there is no continuation in place. They look to sell their business. SJP wont buy it but they can provide a continuation of income for many years. Which is effectively buying the book but paying over time instead of up front.

So, an IFA advice whilst IFA is not compromised but if they go restricted it will be going forward.

It is a fact of life that we get older and there comes a time when you no longer want to work. Some IFAs will only sell to other IFAs. Some will put in place continuation (younger IFAs to carry the business on) and some will sell up for the best price.

iglad

Get Out Now!!

DrSyn

This is what you will be getting at SJP watch it all:-
https://www.youtube.com/watch?v=F-UP-XDUPWM

Now watch these:-
http://www.kroijer.com/
https://www.ifa.com/indexfundsthemovie/

Now consider a low cost global multi asset fund such as these:-
https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link
https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

But if you do still want an IFA look through these:-
https://www.citizensadvice.org.uk/debt-and-money/getting-financial-advice/
https://www.which.co.uk/money/investing/financial-advice
https://www.which.co.uk/money/investing/financial-advice


Investing can be as simple or as complicated as you wish to make it.

newatc

Linton wrote: »

Couldnt that be said about anyone in business, even your good self assuming you are employed?

Exactly. I wasn't suggesting that IFA (independent or otherwise) were more self-centered than any other business person.

I'm retired but along my career path, I ran a small business and had a loyal satisfied customer base but my interests came first.