SJP WILL NOT CLOSE INVESTMENT ACCOUNT PROPERTY FUND AMOUNTS WITHHELD

Deeza

We moved all of our investments [ISA's, Tessa's etc] to SJF approx 5 years ago. Husband diagnosed with Blood Cancer so refused face to face review after Covid. Phoned SJP & said how could we have been reviewed when husband is 83 & I am 77 & no one considers this questionable to have large [for us] investment still & no suggestion to change anything. We asked to close Ac 13th March, eventually week later recd funds minus apprx £10,000 of valuation & no explanation or closing statement. Told we were warned last Oct that Property Fund suspended, no warning about no withdrawal before or after. Told could be 6 months before Ac closed. We need funds urgently as forced to downsize property. Do we involve Financial Ombudsman?  We were told when opened account that we didnt have to give any notice to close account or make withdrawals.

wmb194

Deeza said:

We moved all of our investments [ISA's, Tessa's etc] to SJF approx 5 years ago. Husband diagnosed with Blood Cancer so refused face to face review after Covid. Phoned SJP & said how could we have been reviewed when husband is 83 & I am 77 & no one considers this questionable to have large [for us] investment still & no suggestion to change anything. We asked to close Ac 13th March, eventually week later recd funds minus apprx £10,000 of valuation & no explanation or closing statement. Told we were warned last Oct that Property Fund suspended, no warning about no withdrawal before or after. Told could be 6 months before Ac closed. We need funds urgently as forced to downsize property. Do we involve Financial Ombudsman?  We were told when opened account that we didnt have to give any notice to close account or make withdrawals.

Which fund is it? Some open ended property funds have been suspended and are being wound down. If you're invested in one of them then there's nothing SJP or the financial ombudsman can do about it, you'll just have to wait.

ColdIron

Ordinarily no notice would be required to withdraw from the fund. However the SJP Property fund was suspended October 2023. While suspended nobody can make withdrawals. This is to protect the value of the fund against fire sales where everybody loses out, not to mention the time it would take even in in favourable market conditions

There is not much you can do but wait until SJP winds up the fund or resumes trading

It's a consequence of using open ended funds for illiquid assets but that's another matter

You could check the documentation to make sure there were warnings of this possibility but I strongly suspect they will have covered that base

tacpot12

Regardless of what happens with the property fund, you seem to be complaining that your investments weren't managed correctly, i.e. you were invested in something that wasn't appropriate for your situation. If you think this is the case, you can complain to SJP (you need to follow their formal complaint process), and then you can go to the Financial Obmbudsman.

eskbanker

Deeza said:

We moved all of our investments [ISA's, Tessa's etc] to SJF approx 5 years ago.

[...]

We asked to close Ac 13th March, eventually week later recd funds minus apprx £10,000 of valuation & no explanation or closing statement. Told we were warned last Oct that Property Fund suspended, no warning about no withdrawal before or after.

What proportion of your investments does that £10K property component represent?  If it was, say, half, then that would seem an unusual strategy, but if it was, say, 5-10%, then that would be more realistic.

Deeza said:

We need funds urgently as forced to downsize property.

Surely downsizing normally generates capital, rather than requiring it - is this a timing issue perhaps, where you effectively need bridging finance?  Anyway, the suitability of your investments may be questionable if liquidity was important, which ought not to be a surprise at 83, so this may be a matter for the advisers....

dunstonh

SJP WILL NOT CLOSE INVESTMENT ACCOUNT PROPERTY FUND AMOUNTS WITHHELD

This is normal with all accounts with suspended funds.

Told we were warned last Oct that Property Fund suspended, no warning about no withdrawal before or after. 

That is correct.   Suspensions happen quickly and without warning.

 Told could be 6 months before Ac closed.

Possibly longer. Some property funds were suspended with Covid and never reopened and are still phasing down.

We need funds urgently as forced to downsize property. Do we involve Financial Ombudsman? 

The FOS is there where you identify a wrongdoing and the firm is not dealing with it to your satisfaction.  There is no wrongdoing here and the FOS cannot unsuspend a fund.

 We were told when opened account that we didnt have to give any notice to close account or make withdrawals.

You don't unless a fund becomes suspended.  Its a rare event.

Property funds typically made up no more than 5-15% of a portfolio.   The rest of the portfolio should be paid to you with just the amount allocated to property retained.

Diana_Mackintosh

In my SJP investment Bond the Terms and Conditions state funds can be suspended up to 6 months. However, be warned that if you take a partial encashment in one tax year and the property fund in another, you may incur a much larger tax bill. SJP never tell you this nor in my experience do they ever reply respond fully to inquiries . 

dunstonh

Diana_Mackintosh said:

In my SJP investment Bond the Terms and Conditions state funds can be suspended up to 6 months. However, be warned that if you take a partial encashment in one tax year and the property fund in another, you may incur a much larger tax bill. SJP never tell you this nor in my experience do they ever reply respond fully to inquiries . 

6 month suspensions can be extended with permission from the FCA.

Also, taking the proceeds in multiple policy years can also reduce the taxation depending on the scenario. Indeed, in most cases it would be lower rather than higher.

Aretnap

It's a problem that sometimes affects property funds and an inherent risk that you take by investing in them. 

A fund doesn't keep your money in cash - it uses your money to buy assets. And when you withdraw money from a fund you are essentially asking the fund manager to sell some of the fund's assets to convert your money back into cash and return it to you. 

When the funds assets are shares in large companies this is easy - the manager can sell  them more or less instantly. But when the assets are office blocks and retail parks, those sorts of things simply cannot be sold overnight, so the fund may not always be able to sell your assets and return your money immediately. 

A further complication is that the scale of the assets they invest in - if you have £10000 invested in an equity fund then the manager can sell "your" shares, more or less, but the property fund manager can't sell "your" two square meters of office space. And selling an entire office block at a knockdown price at the bottom of the market because Mr Smith wants his £10000 back isn't exactly fair on the other investors in the fund.

To get round the problem most property funds keep some money as cash rather than using it all to buy property. But their job is to invest their customers money in property, and if they keep too much as cash there not doing that. And if they get a lot of withdrawal requests in a short space of time they will exhaust the cash buffer, leaving no option but to suspend withdrawals until they can sell some retail parks at a reasonable price to restore the balance. 

It's a risk that should certainly have been pointed out when you invested in the fund and if it wasn't then you would have grounds for complaint. However I have a fairly strong suspicion that if you read the documentation for the fund it will include a warning that withdrawals can be suspended without notice.

Diana_Mackintosh

SJP property fund suspension is now INDEFINITE. Cannot get any timescale from them when I can get my money except 2 years- disgraceful way to treat their clients.

wmb194

Diana_Mackintosh said:

SJP property fund suspension is now INDEFINITE. Cannot get any timescale from them when I can get my money except 2 years- disgraceful way to treat their clients.

Thems the breaks when you invest in illiquid assets via an open ended fund. If you'd invested in the same via a closed ended fund e.g., an investment trust listed on the stockmarket you could have sold the shares and the underlying property wouldn't have needed to be sold. The same thing happened with a few open ended property funds during the financial crisis so the risks were known.