St James place advisor

jjimjam

My dad has a fancy investment held by St James Place (trusts, investment bonds, IHT, etc).  It's causing some problem because the advisor is saying it's basically locked in.  Or rather it would be crazy to withdraw it for tax reasons.  That might be right but something about it doesn't ring true.   I ask questions but never really get a very satisfactory answer. It sounds like he either doesn't know,  or he thinks I won't understand, or he's bluffing to avoid losing the account.    Has anyone experience of SJP for when you think your advisor isn't working out very well.    Do you get a new advisor?  Is there a higher level of advisor, or team at head office to call?       None of this was set up be me, by the way - I'd like to get well away from them.  

HappyHarry

There may well be a tax penalty, or it may well be that the funds in trust are not able to be withdrawn by your father.

Do you have a Power of Attorney registered? If not, the adviser probably cannot give you annswers to anything but generic questions.

Could you detail exactly what then investments are and provide more detail on the trusts / IHT relevance of the above?

retiredbanker1

Do you know more about finance than your dad or any adviser?
It is his money - I have to ask why are you interfering?

From what you have written we have no idea whether the investments are solid or poor.

Has your father asked you for advice?
Is he of sound mind - do you have Power of Attorney?

eskbanker

Sounds like a delicate situation, especially if the account holder is still of sound mind - is he happy with SJP or not, regardless of your concerns?  Their setup has traditionally entailed 'locking in' by virtue of high exit fees, that taper off with age, so that might be at least part of the story - how long has he been with them?

dunstonh

 It's causing some problem because the advisor is saying it's basically locked in.  Or rather it would be crazy to withdraw it for tax reasons.  That might be right but something about it doesn't ring true. 

Why do you think it isn't true?
Trying to bust a trust can be very expensive from a tax point of view.

As an IFA, and other IFAs on here have said similar, we tend to see trusts and bonds set up by SJP for the weakest of reasons.  Usually, they are justifiable on paper but unnecessary. It's a good way to prevent an IFA from unwinding the SJP product once the person realises that they should have used an IFA and not a sales rep because the cost to exit in terms of tax (and SJPs 5 year tie in) makes it difficult to undo.

Has anyone experience of SJP for when you think your advisor isn't working out very well.    Do you get a new advisor?  Is there a higher level of advisor, or team at head office to call?

SJP advisers only represent SJP.   So, changing the rep won't help.      Also, tax rules are not set by SJP.  They are set in law.    So, changing the rep won't change the outcome.

Why do you want to bust the trust and why do you think it won't have consequences?

jjimjam

It was set up as a gift and loan trust more than 20 years ago by my parents - one has died.  Certainly it was to do what gift and loan trusts do, i.e. provide income for 20 years and avoid IHT on the growth.   The income ended some time ago, so it's sort of just there, slowly growing.    Dad wants to pass it on now to be useful.    It's too complicated and big for me to ignore the advice.   My own understanding is that an investment bond can be transferred, to beneficiaries, they can surrender the bond and pay the tax.  If they are basic rate tax payers then there won't be any tax to pay.   Or is the problem that a settlor is still alive?

jjimjam

Just applying for power of attorney at the moment.   I don't think it's that though.

jjimjam

retiredbanker1 said:

Do you know more about finance than your dad or any adviser?
It is his money - I have to ask why are you interfering?

From what you have written we have no idea whether the investments are solid or poor.

Has your father asked you for advice?
Is he of sound mind - do you have Power of Attorney?

I know more about finance than my dad.    I know less about finance than advisers.  I'm interfering because he asked me to. The investments appear OK.  My father has asked me for advice because he wants to pass on some money.  He is of sound mind.  I am currently applying for poa. 

jjimjam

eskbanker said:

Sounds like a delicate situation, especially if the account holder is still of sound mind - is he happy with SJP or not, regardless of your concerns?  Their setup has traditionally entailed 'locking in' by virtue of high exit fees, that taper off with age, so that might be at least part of the story - how long has he been with them?

It is not a delicate situation.   He is not happy with SJP, but tolerant.   He has been with them for over 23 years.

jjimjam

dunstonh said:

 It's causing some problem because the advisor is saying it's basically locked in.  Or rather it would be crazy to withdraw it for tax reasons.  That might be right but something about it doesn't ring true. 

Why do you think it isn't true?
Trying to bust a trust can be very expensive from a tax point of view.

As an IFA, and other IFAs on here have said similar, we tend to see trusts and bonds set up by SJP for the weakest of reasons.  Usually, they are justifiable on paper but unnecessary. It's a good way to prevent an IFA from unwinding the SJP product once the person realises that they should have used an IFA and not a sales rep because the cost to exit in terms of tax (and SJPs 5 year tie in) makes it difficult to undo.

Has anyone experience of SJP for when you think your advisor isn't working out very well.    Do you get a new advisor?  Is there a higher level of advisor, or team at head office to call?

SJP advisers only represent SJP.   So, changing the rep won't help.      Also, tax rules are not set by SJP.  They are set in law.    So, changing the rep won't change the outcome.

Why do you want to bust the trust and why do you think it won't have consequences?

It may well be true.   I think I may have upset some here already but do you know what:  He is like a sales rep.  He doesn't really appear to be looking for solutions and certainly not one that involves withdrawing funds.  And that's why the main thrust of my first post was to ask about the adviser and not the investment.    

I would like to understand when a trust is difficult or expensive to 'bust' and when it isn't.  Is it because the settlor is still alive, because he says that it should be done after death?  It's been going for over 20 years and all original investment has been withdrawn and only growth left.

eskbanker

jjimjam said:

eskbanker said:

Sounds like a delicate situation, especially if the account holder is still of sound mind - is he happy with SJP or not, regardless of your concerns?

It is not a delicate situation.

Fair enough, you're the one who knows the full story, I was just picking up on the apparently wary conversations between you:

jjimjam said:

I ask questions but never really get a very satisfactory answer. It sounds like he either doesn't know,  or he thinks I won't understand, or he's bluffing to avoid losing the account.

However, if he's actively seeking your assistance then that's different!