Vanguard/HSBC tracker versus St James Place

fizio

A 'friend' (yes really) has been persuaded to invest circa 200k with st james place for a low risk portfolio to supplement pension and they have built a protfolio using these UT funds -all accumlation :

ww opps
Intl equity
global equity
multi-asset
inv grade corp bonds
intl corp bonds
uk & gen prog
property
altern assets
asia pacific
emerg mkts
index linked gilts
uk absolute
corp bond gross
div assets

most are between 11 and 4% (highest 3 at the top at 11%) but last 2 are 0.7% and 2 above that are 1.4%


Personally I would think that the likes of VLS 60/80 would be a better bet - both in terms of simplicity and returns - as well as the costs.


SJP seem to get mentioned a lot for 'high fees' etc but they are obvioulsy good at persuading (non investing savvy) people to trust them.


Would appreciate any opinions/comments on switching out

El_Torro

If your friend has already invested with SJP then it's likely that there's a high cost to exit. Other people I know who have invested with them have been on a 5% penalty fee in Year 1, 4% in Year 2, etc...


So they'll need to weigh up whether the penalty to exit is worth it, since if they invest in a multi asset fund the fees will be lower.


Is your friend confident to invest £200k by themselves? Will they choose the right funds and risk profile? Will they sell at the first sign of trouble, thereby losing money?

SonOf

SJP have a high exit charge in the first 4 years. So changing now could be quite expensive. Although staying with them is quite expensive as well.

Vanguard/HSBC tracker versus St James Place

Its not really like for like. Indeed, our model portfolio, as IFAs, includes both vanguard and HSBC trackers as well as ishares as no one fund house has the best trackers. Plus, there are some managed in there as well.

Your friend should have either researched more and either used an IFA or gone DIY. A tied sales rep like SJP is never the best idea. Its a bit late when you have already gone with them though.

fizio

The way it transpired was that the friends local bank advisor changed jobs to SJP and contacted her to ask if she needed advise on investments - as she was mainly in various savings accounts earning little interest.

As some of you have said the damage has already been done and she has paid various fees to have this portfolio and has zero clue to how the charges work. Having read through teh SJP document it seems to be as follows
initial charge 5%, ongoing charge 2.14%, initial advice 4.5% and ongoing advice 0.5%
So i would think that by getting out to a VLS she will at least save the 2.14+0.5% ongoing advice.. I wasn't aware that they may be penalties with getting out so will ask her to investigate.

Given the profile of knowing zero about investing and wanting a low risk investment thats a bit better than cash, i would the likes of VLS would be a beter approach than SJP.


I know that a 'bespoke' portfolio via an IFA has its merits - especially for the more knowledgeable and serious investor but SJP seem to be taking the biscuit.

AnotherJoe

Your friend should either get out now, swallowing the fee, or wait until the redemption fee has expired and in the meantime pay a hefty lot of extra fees each year and get poor performance.

So, better to bail out now.
And then either a small independent IFA or DIY though given they were happy to be sold this crock, a small IFA is probably the best bet because maybe they will do the wrong thing when they DIY

fizio

AnotherJoe wrote: »

Your friend should either get out now, swallowing the fee, or wait until the redemption fee has expired and in the meantime pay a hefty lot of extra fees each year and get poor performance.

So, better to bail out now.
And then either a small independent IFA or DIY though given they were happy to be sold this crock, a small IFA is probably the best bet because maybe they will do the wrong thing when they DIY

That makes sense. I think she has been with them only a couple of years so will see what they say about exit fees and probably take the hit. A small local IFA may well be a good option

jaybeetoo

Your friend can opt out of the 0.5% ongoing advice fee.

cfw1994

From what I have read on their fees, I doubt now would be a great time to step back out, unless there is a "cooling off" period to avoid them?
I suspect she might as well remain for the duration those exit fees are above perhaps 0-1%.

At the same time, try pretending there is the same amount in a VLS80 for the same period. Is there a tool to manage that kind of comparison.

Be interesting to see how they actually perform.

Then in 4-5 years time, if Vanguard did better....& my suspicion is that it will.....move out!