St James Place concern

dunstonh

For IFA:
FCA show adviser initial at 2.5% and ongoing at 0.8%. Total ongoing 1.9% pa.

https://www.fca.org.uk/publication/corporate/evaluation-of-the-impact-of-the-rdr-and-famr.pdf

Where does it say that about IFAs?   
The charges are all types of advisers, which includes SJP.

SJP initial of 5% (headline rate, I've heard of people haggling)

Indeed, yes.  It is disgraceful that haggling still exists. The FCA frown on that.   If you can offer lower charges like that for one person then why can you not do it for another.   You are basically mugging the inexperienced individual who is less savvy.

As you point out (for your £500k example), as the pot sizes increases, independent fees will tend to come down (in % terms), but I don't think that's the case for the "average".

Average is always a risk to use as the lower cost firms are unfairly tainted by the expensive firms.
SJP is one of the most expensive distribution channels in the country.

And as for ongoing,  I am working on some client work for someone at the moment with just £130k where their total ongoing charges are 0.93%.  There are several top ups across multiple wrappers with no initial charges.  And IFAs and providers/platforms IFAs use cannot charge exit charges.

katejo

PannyH said:

I've entrusted my pension investment to St James Place, a company I consider reputable. However, I've come across several negative posts about them lately. My financial advisor, who is affiliated with St James Place, reassures me that these are merely expressions of professional jealousy and shouldn't be a cause for concern. Despite this assurance, I adhere to the belief that where there's smoke, there might be fire. Should I be genuinely concerned?

 

You might find the following link helpful. I have some unit trusts/ISA with them but not my pension. I read negative reviews here on MSE and then came across  St James’s Place review: is it any good? (2023) - Nuts About Money
I did contact Nuts about Money myself and and got a helpful response

Pat38493

Nuts about money - LOL - can be taken more than one way.

"As a general rule, anywhere around 2% per year as a total fee (so all the fees for advice and investments) is a reasonable fee for a financial advisor that offers a fully advised service."  

???

dunstonh

Pat38493 said:

Nuts about money - LOL - can be taken more than one way.

"As a general rule, anywhere around 2% per year as a total fee (so all the fees for advice and investments) is a reasonable fee for a financial advisor that offers a fully advised service."  

???

My compliance company told me about 20 years ago that anything over 2% was generally considered unacceptably expensive.    So, that site saying 2% is reasonable is completely wrong.  It also positions SJP charges as being in the middle.   Yet it is recognised that they are amongst the most expensive.  It almost reads as if someone from SJP wrote it themselves.

Albermarle

Indeed, yes.  It is disgraceful that haggling still exists. The FCA frown on that.   If you can offer lower charges like that for one person then why can you not do it for another.   You are basically mugging the inexperienced individual who is less savvy.

I understand the sentiment, but in the real world haggling about price will always happen, and the sharper customers will get the better deals, in many different walks of life and business areas.

Although maybe I am cynical after a lifetime of negotiating/ haggling/ horse trading with customers, big and small.

MarkCarnage

Pat38493 said:

artyboy said:

Next time the OP visits their SJP office, maybe they should take some time to look at the very nice cars parked outside. The ones that the OP is paying for...

I heard a story the other day about an investor who was being shown round the offices of some big investment company and they were very keen to point out in the employee car park, "that's so and so's ferarri, that's whatisnames Porsche" and so on.

The investor then asked "so where are the Ferrari's belonging to your clients parked?

Indeed...think this one started as 'where are the customers' yachts?' but both are very true! 

michaels

Do people not stop and think what 2% per year means over a 40-50 year retirement?!

gm0

I used them - experimentally before considering them myself as a consolidation target.  So for a child - a try before you buy if you will

And I now DIY. 

I have had limited exposure to independent help. (Fixed fee, bulk consolidator cut down advice).  Not the like SJP but independent full service kind.

Jealousy.  What is there to be jealous of.  That it's a damn good business model from their end. They have grown amazingly.  And run with high margins. And as a result are more in the media and public firing line than Quilter and Investec and such like and 50 other wealth managers one could find in niches of one sort or another.

Here is my view on running costs for pension portfolios

ALL IN COST - i.e. including the bit you don't see in the unit prices (fund management). And the platform and the advice (or absence of advice).

Annual drag stated as %

Approx 0.2- 0.3% for DIY global passive philosophy (or a bit more if you particularly want a lot of specific and expensive fund choices) all the way up to maybe 1% all in if you load up on higher cost actives.

Indie IFA Advice - 0.8% to 1.5% (with product and platform). 0.5% as par for the advice bit.  The rest much as before.

A bit more again with a DFM

And then SJP (and other wealth managers) - very much what you see

Initial charges are zero for DIY. 
And entirely negotiable (or cappable) for the other two.
Depending on the number of schemes to tidy up and the level of work this is how people get paid to do the regulated deliverables the admin and indeed to make their living. 

On performance and the complex layered portfolios

My learnings were that the SJP product was taking a bit more risk to deliver a broadly similar return to a simpler approach net fees. Volatility generated by additional speculative risk being taken (their decisions but my risk) was higher to keep the wheels on the fees train (hopefully) and always to pay them first. 
I also encountered a period of surprising portfolio drift where my EM exposure shot up significantly.

Exit - EWC still being in place for existing customers but now stopped for new is still scandalous

EWC being the "we will have our management fees for several years on all money that is added - even if you leave charges"  Slides down over 6? years to zero - but reset for each new addition (for that sum)

What is good

Easy to find. Easy to buy.  Typically packaged with small/medium firms of sales FAs.  Who do regulated advice. 
And often as ex IFAs are often just as skilled, as good as bad or as drunk - as anyone else you may run into in the market. 

But 10x the achievable cost is too rich for my blood

Audi
VW
Seat
Skoda

Pay what you want.  As with the cars and the parts bin and "platform".
The shares and global bonds at the bottom of the stack are the same

But there is glossy packaging

So you are either getting useful family financial advice in a relationship where you are building up trust.  And find the attentiveness and fees charged acceptable.  I have friends who view it that way. Or you do not find the balance acceptable.  In which case the action to be taken should be clear.  But be careful of both initial charges and the EWC in planning what you do.

artyboy

Albermarle said:

Indeed, yes.  It is disgraceful that haggling still exists. The FCA frown on that.   If you can offer lower charges like that for one person then why can you not do it for another.   You are basically mugging the inexperienced individual who is less savvy.

I understand the sentiment, but in the real world haggling about price will always happen, and the sharper customers will get the better deals, in many different walks of life and business areas.

Although maybe I am cynical after a lifetime of negotiating/ haggling/ horse trading with customers, big and small.

I don't think you're cynical at all, but there does seem to be a moral line that gets drawn over what you can/should haggle over. Martin and the MSE site openly advocate haggling for many retail products and services - there are even success rate tables published. There are sub-forums on here that look at utilities like Sky and Virgin and discuss latest haggling successes and price points. 

I've taken full advantage of that market intel on occasions. Hell, I even got £5 off my dry cleaning today (although in my defence I didn't instigate it, I simply balked at the price because I knew I could get it cheaper elsewhere).

But... a few years back when one of my predecessors dared to ask the question on the Energy board about whether you could haggle on gas or electricity contracts, they were roundly flamed with moral indignation. You'd think that haggling there amounted to stealing light and heat from widows and orphans! To be fair, I now understand there are clear rules against this, but it was more than that - it was the shame of even daring to ask.

So where do financial services sit within all this? Well as a regulated industry, you'd almost expect there to be firm rules there too, but as always it's principles and fudge. Certainly there's no issue with corporate and business clients of banks negotiating terms. And previous posts on here have suggested that if you have a decent sized pot of money to manage, you might be able to get a lower IFA fee. Do IFAs publish, transparently, what those % fee to AUM thresholds are? I'm guessing not, and so it's at least implicitly a negotiated fee in those cases.

All of which brings me back to say that while I am no fan at all of SJP, fee negotiation might not be the strongest moral ground to attack them on...

FIREDreamer

Very jealous of SJP 😂😂😂