Leaving SJP

morty85

u03ada8 said:

morty85 said:

I am a Financial Planner for a large firm and there are a few main things you will want to consider.

As reiterated, first you need to understand what if any tranches of investments you've made have exit fees associated to them.

These exit fees have now been scrapped for new investments and new clients, but legacy contributions are likely to still be at the mercy of 6 year exit charges from date of deployment of funds. This can obviously affect what you're able to transfer out initially without losing value due to fees to move your money. You can obtain a statement from SJP on any exit fees liable on your plans.

There are a host of options available to you and a few things to consider.

- Do you have the confidence, time and level of understanding to self manage your own investments?

If so a DIY platform may be useful. Most also offer lower cost 'coaching' which doesn't constitute formal advice but is intended to help guide you on your decision making if you don't wish to pay for ongoing planning advice, this can include on how to construct a suitable portfolio of investments. Some will provide you the option to convert to full advice with other advisers being able to fully service this need within their firm (think Hargreaves Lansdown/ Bestinvest+Evelyn Partners, etc) if you feel you dont or no longer wish to self manage. This can reduce the need to move assets if a provider also offers this service 
If you feel it isn't right for yyou to DIY given the additional involvement required on your behalf, having your plans managed by a professional takes all the hassle off your hands and a co-working relationship should form, the adviser should be able to offer you the ability to make advised decisions(they can advise you on what they feel are the right investments for you and you have the final say) or discretionary decisions on your investments (they provide advice and manage them for you but keep you informed of what's being recommended and why).

- Do you feel like you need to pay for annual reviews?

Or, would you have enough trust in a new adviser (given your recent experience) to have your plans set up and adjusted so they are suitable for you now and a suitable risk managed plan established so you can let the professionals manage things for you without the need for regular reviews?

This means you only pay for an advice event as it arises rather than fees being drip fed out each year.

If you have complex planning needs and variable personal circumstances then regular reviews can help keep things on track for you and they can be adjusted and adapted as required to meet your needs.

- What is your tolerance on cost?

You will likely have to pay for new advice fees on how your post-SJP monies are managed.
A lot of time, research and expertise goes into formulating advice and this is a something that will result in new added costs. Some firms work on a fixed fee basis dependant on the amount of work involved (which I think is fairest on the client), others will charge a percentage fee based on the value of the funds to be managed (e.g. 2% advice fee)

- You should also consider the merits of using an IFA vs a restricted adviser.

Just because an IFA is technically whole of market doesn't necessarily mean you will get a better solution than a restricted adviser.
Each firm has different due diligence and research methods and different ways in viewing risk management and controls on how funds are invested.

Often an IFA (which I have also been) will build a portfolio of preferred product and investment providers that they typically use with clients (but they can also select whatever they believe is best based on individual client circumstances), this effectively creates a mini 'panel', essentially similar to how a restricted adviser would operate.
However a restricted adviser (which I am now) may only use a select group of products and providers due to their good financial credentials, cost effectiveness, quality of product and service, range of services and because its been determined they are the best available options for their clients and the firms have high conviction confidence using them.

- Transferring out and receiving advice will take time.

 The whole process can take a number of weeks or months as your new adviser/firm will need to gather information on your current plans on you as an individual, this will include issuing signed (by you) letters of authority giving your new firm the ability to obtain information on your existing plans, so your current SJP adviser is likely to be made aware of your intention to explore your options available to you by issuing these letters to SJP.

I hope this helps provide some useful information.

Essentially, do your research, meet with a few different advisers and use the above as a reference on finding the best solution for you.

Much of the DIY online providers will be very similar on cost and functionality so it's more to do with any buying and selling charges that may be incurred when managing your portfolio that will make the greatest difference.

Thank you for your very detailed explanation. I do not have enough knowledge at present to manage this myself and would absolutely want to hire an advisor but on an hourly rate basis rather than % ongoing fee.

Some firms will work on an hourly basis, but this is not commonplace. The other thing to consider is that they would possibly include the hours taken to compile any advice and reports as part of the fee arrangement adding to cost.

Some would bulk charge per advice report based on cost to the business to complete the work and the time involved in doing so rather than prescribing an hourly rate.

Dependent on what work is involved this may increase the cost to similar to that of an ongoing advice fee deducted annually from your investments without having to pay out of cash. The ongoing fee normally would include access to your adviser year round too. Whereas hourly rates would mean charges at multiple times potentially if multiple contact is required.

Working out the difference would be important to check value for service.

dunstonh

u03ada8 said:

morty85 said:

I am a Financial Planner for a large firm and there are a few main things you will want to consider.

As reiterated, first you need to understand what if any tranches of investments you've made have exit fees associated to them.

These exit fees have now been scrapped for new investments and new clients, but legacy contributions are likely to still be at the mercy of 6 year exit charges from date of deployment of funds. This can obviously affect what you're able to transfer out initially without losing value due to fees to move your money. You can obtain a statement from SJP on any exit fees liable on your plans.

There are a host of options available to you and a few things to consider.

- Do you have the confidence, time and level of understanding to self manage your own investments?

If so a DIY platform may be useful. Most also offer lower cost 'coaching' which doesn't constitute formal advice but is intended to help guide you on your decision making if you don't wish to pay for ongoing planning advice, this can include on how to construct a suitable portfolio of investments. Some will provide you the option to convert to full advice with other advisers being able to fully service this need within their firm (think Hargreaves Lansdown/ Bestinvest+Evelyn Partners, etc) if you feel you dont or no longer wish to self manage. This can reduce the need to move assets if a provider also offers this service 
If you feel it isn't right for yyou to DIY given the additional involvement required on your behalf, having your plans managed by a professional takes all the hassle off your hands and a co-working relationship should form, the adviser should be able to offer you the ability to make advised decisions(they can advise you on what they feel are the right investments for you and you have the final say) or discretionary decisions on your investments (they provide advice and manage them for you but keep you informed of what's being recommended and why).

- Do you feel like you need to pay for annual reviews?

Or, would you have enough trust in a new adviser (given your recent experience) to have your plans set up and adjusted so they are suitable for you now and a suitable risk managed plan established so you can let the professionals manage things for you without the need for regular reviews?

This means you only pay for an advice event as it arises rather than fees being drip fed out each year.

If you have complex planning needs and variable personal circumstances then regular reviews can help keep things on track for you and they can be adjusted and adapted as required to meet your needs.

- What is your tolerance on cost?

You will likely have to pay for new advice fees on how your post-SJP monies are managed.
A lot of time, research and expertise goes into formulating advice and this is a something that will result in new added costs. Some firms work on a fixed fee basis dependant on the amount of work involved (which I think is fairest on the client), others will charge a percentage fee based on the value of the funds to be managed (e.g. 2% advice fee)

- You should also consider the merits of using an IFA vs a restricted adviser.

Just because an IFA is technically whole of market doesn't necessarily mean you will get a better solution than a restricted adviser.
Each firm has different due diligence and research methods and different ways in viewing risk management and controls on how funds are invested.

Often an IFA (which I have also been) will build a portfolio of preferred product and investment providers that they typically use with clients (but they can also select whatever they believe is best based on individual client circumstances), this effectively creates a mini 'panel', essentially similar to how a restricted adviser would operate.
However a restricted adviser (which I am now) may only use a select group of products and providers due to their good financial credentials, cost effectiveness, quality of product and service, range of services and because its been determined they are the best available options for their clients and the firms have high conviction confidence using them.

- Transferring out and receiving advice will take time.

 The whole process can take a number of weeks or months as your new adviser/firm will need to gather information on your current plans on you as an individual, this will include issuing signed (by you) letters of authority giving your new firm the ability to obtain information on your existing plans, so your current SJP adviser is likely to be made aware of your intention to explore your options available to you by issuing these letters to SJP.

I hope this helps provide some useful information.

Essentially, do your research, meet with a few different advisers and use the above as a reference on finding the best solution for you.

Much of the DIY online providers will be very similar on cost and functionality so it's more to do with any buying and selling charges that may be incurred when managing your portfolio that will make the greatest difference.

Thank you for your very detailed explanation. I do not have enough knowledge at present to manage this myself and would absolutely want to hire an advisor but on an hourly rate basis rather than % ongoing fee.

Hourly is often not the best option.

For example, yesterday, I had a transaction where the provider has an issue and so far, it has generated an extra 5 hours work because of that issue.  And its yet to be resolved.     

There is also the potential for VAT to be added 

And with transactional clients being charged by the hour, its unlikely that the adviser would include the ongoing servicing benefits compared to those that are paying for them.