Choice of Investment company

NG65

Having recently retired I am looking to invest a large sum of money into an investment company.  I am looking at either St James Place or Police Clubs Finance.  It a big step and I want to get it right but having done my due diligence I’m still split between the two.  Is there anyone with any personal knowledge of either company.  Both companies give a good spin on their products but I have noticed a lot of negative reviews of SJP where as PCF has very little mention anywhere.  Ultimately it may just come down to fees as the only difference between them but is there any advice on investment questions I should be asking, I have little to know knowledge of investment hence relying on one of these companies 

AlanP_2

SJP have a very poor reputation in general I would say (high charges, poor performing "own brand" funds.

The Police one I've never heard of and am not sure why you would choose them as opposed to any other IFA. Is there anyone, that you trust, who uses an IFA and could give you a recommendation?


Else, local search using Google and then have a look at their websites, weeding out any that don't say Independent FA, then arrange an introductory call with your shortlist of 2-4 to see who you establish a rapport with.

NG65

Thanks Alan.  I chose the PCF as they did a presentation to a group of soon to retire police officers as did SJP.  PCF seem to specialise in Police Officer Pensions but then SJP stated they did to but they seem a much larger company.  PCF are IFA running out of N. Ireland just wondered if anyone had had any dealing with them.  Thanks again

bowlhead99

If you have a large sum of money and not much knowledge, it makes sense to consult an independent financial adviser. SJP are not independent and will only put your money in their own fund products; they are huge so lots of people have heard of them, but seen as expensive and have high exit fees if you change your mind and want to leave for a better option.  You don't actually get any more nutrition in a sandwich from Harrods than from any other reputable supplier, but you pay more for it due to nice surroundings and high cost staff.

PCF will get a lot of money from police and ex police from putting the word police in their name and perhaps don't need to advertise so far and wide that they would get much mention or reviews online, because they can just get in and pitch their services to retiring police people who don't know much about finance and use them as an easy option.  They say they offer independent financial advice, but caveat it by saying they pick investments from "a fully researched panel that is representative of the whole of the market available" and mention particular specific investments and platforms on their homepage that they 'may' recommend to you.  They also say they have a fixed ongoing advice fee after the initial upfront work of 1% annually - while anecdotally from various threads on here, the going rate for IFAs would be more like 0.5% for large sums.

But the fee levels with any adviser, as a percentage, will probably depend on the actual amount you have available to invest as this may drive the complexity of the solution but also generally more pounds invested results in lower % cost per pound invested, due to efficiencies.  Rather than hooking up with SJP or PCF you would likely be better off seeking a few IFAs local to you and having initial free meetings with them to see what each of them offer for your circumstances and whether you are right for each other.

NG65

Thanks that makes a lot of sense.  SJP have offered 5% initial set up then 2%PA as fees.  PCF have 2% initial and 1.95% annually, but from what you say other IFA could offer a lot lower annual fee.  Thanks again

bowlhead99

NG65 said:

Thanks that makes a lot of sense.  SJP have offered 5% initial set up then 2%PA as fees.  PCF have 2% initial and 1.95% annually, but from what you say other IFA could offer a lot lower annual fee.  Thanks again

Just to clarify my earlier comment, the 0.5% ongoing annual rate from and advisor that I mentioned would be for advice and servicing (rebalancing, using tax allowances etc) rather than an all-in cost - there would still be an investment platform fee and the running costs of the actual investment funds selected. But still even with those added on, you would expect to comfortably beat the 1.95% all in. If your investment returns are only a few percent a year, you really don't want to be giving away 2% to the advisor and fund manager. 

Albermarle

Typically an IFA could charge a 1 % one off initial fee but it could vary depending on the size of the pot.
Then they would have an ongoing charge of 1% to 0.5% pa again depending on the size of the pot. For example a £250K pot could be charged at 0.7% but it will vary .
Then there will be a fee for the investment platform they use and for the investments funds.
Also remember that an IFA can also help you with tax and other personal finance issues. You should not be tied in as you would with SJP and you can terminate the contract at short notice .
As in all walks of life there are good ones and not so good ones,so best to have a chat with them to see how you get on.
Some knowledge of investing /money matters will help in your discussions with them. Like talking to a mechanic at the garage , it is better when you know a bit about cars. 

dunstonh

SJP is an salesforce selling their own products.  This allows them to get away with bundling their charges under one total charge.  Only restricted reps can do that (where the rep/agent/adviser, product provider and fund house are all the same company).  So, they will give you a bottom line figure and may breakdown bits of it.   An IFA has to break down all the charges into segments and then give you the bottom line. 

In theory, an IFA can walk all over SJP in terms of pricing, investment selection and future flexibility (e.g. provider/platform A goes off the boil or sells up to a lesser quality one, then you can move without cost to provider/platform b - with a tied option you get no such flexibility).  One area SJP can walk over IFAs is presentation material.  The glossy brochures.  IFAs print on their office printers.   SJP print using commercial printers and their glossy stuff will look better than IFA stuff.   However, when you are paying SJP fees, you would expect them to be gold plated.

One thing we have noticed (and I know several IFAs that have said the same) is that SJP seem to be doing more investment bonds nowadays.  It's purely anecdotal and based on our experience.  However, unlike ISAs and pensions, investment bonds cannot be undone easily and you can find yourself stuck with them for a very long time (tax being the reason).   Often they use a trust with the weakest of reasons to justify it (not wrong reasons but something that is really not worth worrying about for most people).  Busting a trust can be a right pain.   It can stop an IFA coming in and taking over an existing SJP customer.

where as PCF has very little mention anywhere.

Never heard of them but most IFAs (if they are one) are small localised firms and have a similar internet presence to your local butcher.  So, you are unlikely to find much about them. There are some national firms or regional firms but generally, they are best avoided as they tend to have a higher staff turnover.   Ideally, you want to get in with the director/owner or long term adviser with a company.   Not a company where the adviser changes every few years and you have to start over.

IFAs, being independent, will vary in cost. Some will be as high as SJP. Some will be a lot less.    For context, we were up against SJP with someone and SJP were going to charge £25,000 compared to our £2,500.   The bottom line for ongoing has half SJP>   That is the sort of difference you should be aiming for and you should be able to find a local firm with that sort of fee/charges level.   
The choice should be between using an IFA or going DIY.   Using an FA/sales rep/agent of a provider should not be in your consideration.  And avoid firms that use wealth management in their tagline or name.  That is a generalisation that is not 100% but it usually means they use expensive investment options.

NG65

Thank you Albermale really useful.  The sort of figures and the options in regards to tax, personal finance issues and the termination of contract are what is being reflected in PCF.  The min thread that runs through all replies is to research more IFA so I’ll take that and research some local IFAs and use all your advice during conversations.

ChilliBob

I spoke to SJP yesterday, from a sceptical starting point but based on a recommendation from somebody. I was told products typically have 2.75% fees and their fee was 1.75. I was also told of a track record of 7.5% net of fees. Not guaranteed, obviously, but very confident.

As you will have seen, when I ummed and ahhed over 0.13 and 0.22 index funds I don't think I'm their target customer, despite them reassuring me I very much am! 

To be fair and balanced, the recommendation came from someone who had been with them for over ten years and was happy as his focus is elsewhere time wise. 

valiant24

ChilliBob said:

As you will have seen, when I ummed and ahhed over 0.13 and 0.22 index funds I don't think I'm their target customer, despite them reassuring me I very much am! 

A year or two back I got a recommendation from someone whose opinion on such matters I respect to speak to an IFA in Manchester.   Had what I thought was a decent chat, but the IFA called back a day or two later to say that, on reflection, he thought that he, and customers as focussed as I seemed to be on advisor fees, had proved in the past to be a poor match, and he'd rather not proceed further.
I quite admired him for his honesty.