Wealth management performance and charges

JonathanGavin

I have had a large sum invested in SJP for over 5 years and it has returned around 9% after charges.They have their own FA'S who advise clients whenever requested, and move client's funds wherever they recommend to, usually annually. They do very poorly on trust pilot. I don't want to play the market myself. Any advice on where I might get better returns, or is this reasonable.

Albermarle

You will find SJP are not very popular on this forum , due to their high charges and habit of locking in customers for long periods into their own funds.

Regarding the 9% pa , it depends on how your portfolio is targeted /what your objectives are . Many investors are more interested in capital preservation than out and out growth .
An aggressive portfolio ( high in US equity for example ) would have seen a lot more growth than 9%pa in the last 5 years . However when markets go negative like now it goes down pretty quick.
Potential high growth brings potential high volatility and many investors do not like that and prefer a more middle approach.

eskbanker

It's impossible to know whether 9% net return (hopefully annual!) is good or bad in a vacuum, without knowing anything about what you're trying to achieve, over what time period, how much risk you're taking, and what you're invested in, but SJP aren't renowned for value for money, so it's highly likely you'd be able to do better elsewhere, even if you have to engage an IFA to look after it for you.

JonathanGavin

Thanks v much for your comment.
I kinda thought as much.
My portfolio is very diverse and mid/low risk.
Why might a saver/investor, not be interested in growth and more in preservation?

JonathanGavin

Thanks esk.
Yes indeed, I appreciate these factors.
I have been thinking about moving half of my wealth to another company, but I need one that offers the same 'free' advice and service as SJP, but with significantly lower charges. Research has not revealed one as yet. 

eskbanker

JonathanGavin said:

Thanks esk.
Yes indeed, I appreciate these factors.
I have been thinking about moving half of my wealth to another company, but I need one that offers the same 'free' advice and service as SJP, but with significantly lower charges. Research has not revealed one as yet. 

My understanding is that SJP bundle their charges together, so it isn't practical to know exactly what you're paying for advice, platform fees, fund charges, etc, individually, as you would elsewhere, so you effectively need to look at the total cost % for SJP versus the equivalent total cost elsewhere, rather than subdividing it like that and looking for free advice, which you won't find....

bostonerimus

SJP is not popular with many on this site because of their fees. But if it is working for you then ok - it is your money after all, but if you have doubts you have a couple of options. Move to another "full service" company, work with an IFA or DIY. 

9% is a very respectable average annual return over 5 years, but without knowing how it was invested there's no way to see if that's any good because risk needs to be included. FYI I DIY using a few index funds and my 5 years average annual return is 13%, but I have a high percentage of US stocks...for which I'm paying the price right now.

Marcon

JonathanGavin said:

Thanks v much for your comment.
I kinda thought as much.
My portfolio is very diverse and mid/low risk.
Why might a saver/investor, not be interested in growth and more in preservation?

If you're in a mid/low risk portfolio, then you are likely to be more interested in preservation than growth, so perhaps asking yourself the question would actually give you the answer! What is your risk appetite?

Audaxer

JonathanGavin said:

Thanks v much for your comment.
I kinda thought as much.
My portfolio is very diverse and mid/low risk.
Why might a saver/investor, not be interested in growth and more in preservation?

Is your return 9% over 5 years or 9% per annum over 5 years? I'm not sure that the latter could be obtained with a low/med risk portfolio, especially after SJP charges have been deducted. What percentage of equities are in your portfolio?

A retired investor may be more interested in wealth preservation rather than out an out growth, as they wouldn't want the volatility and potential 50% plus falls in value that can happen from time to time with high growth portfolios.



 

dunstonh

I have been thinking about moving half of my wealth to another company, but I need one that offers the same 'free' advice and service as SJP, but with significantly lower charges. Research has not revealed one as yet. 

SJP is not free.  Their adviser charges are bundled in their total charges.   Whereas an IFA and virtually every other firm out there show their charges unbundled and then the total.

Wealth management firms, in general, tend to be the most expensive distribution channel.

OldMusicGuy

JonathanGavin said:

Any advice on where I might get better returns, or is this reasonable.

Like others said, why do you want better returns? Unless you have clear objectives for your investments, you can't say if 9% is good or bad. I am an example of an investor that doesn't want high growth but wants to preserve what I have and avoid volatility. But that's because I am recently retired, have a large SIPP that will see me through the rest of my life provided it just beats inflation. So I have a low/moderate risk portfolio designed to reduce volatility but that will not grow as fast as a higher risk portfolio. 

You also have to think about your risk tolerance as well. I am very risk averse, so my strategy lets me sleep at night. But others who are less risk averse (and retired) are happy with a more aggressive and higher growth strategy. However, I did make the mistake of having too low risk a portfolio when I was younger, and that's when I should have been going for growth.

Hopefully your SJP adviser will have explained all of this to you, talked you through all the options and helped you choose the right option for your strategy and risk tolerance. If they haven't, you should question what you are paying for.

SJP do have a reputation of being very expensive for the advice they provide. I would certainly never pay their charges, I prefer to use a simple multi-asset fund approach to achieve my goals and not pay an IFA or FA. That certainly reduces my costs.