SJP Pension

noviceadviser

I have a friend who was recently advised (badly in my view) to move a pension from a fund in Aviva to a fund in SJP.  She is 2-3 years from retirement.  Her pension pot has now suffered the hit of the initial "advice" fee of 4.5%, plus the product fee of 1.5%, and ongoing annual fees of 1.96%.  Now she is in the fund she will also suffer early withdrawal penalties of 6% if she wanted to move the funds out. It is too early to say if the fund is performing well or not, but in my view the damage has already been done.

My question is - she was "Advised" by a company who are an Approved Representative of SJP, and not by an IFA.  So I wonder how it is possible for the SJP Advisor (Salesman) to get his hands on her pension pot without an IFA?  Is this correct?

dunstonh

 It is too early to say if the fund is performing well or not, but in my view the damage has already been done.

SJP funds are generally average to dogs.

My question is - she was "Advised" by a company who are an Approved Representative of SJP, and not by an IFA.  So I wonder how it is possible for the SJP Advisor (Salesman) to get his hands on her pension pot without an IFA?  Is this correct?

SJP are FAs and can only retail products of SJP  (often known as sales agents or tied reps or similar).    FAs can give advice but are restricted to the products of their linked company.      

So, an SJP FA can still do the pension switch from Aviva but they will only place it with SJP.   They are still required to justify the reason for transfer.       Charges are required to be disclosed on comparisons and genuine reasons for transfer must exist.   

It does not require an IFA (who wouldn't use SJP if it was a requirement).

IamWood

noviceadviser said:

I have a friend who was recently advised (badly in my view) to move a pension from a fund in Aviva to a fund in SJP.  She is 2-3 years from retirement.  Her pension pot has now suffered the hit of the initial "advice" fee of 4.5%, plus the product fee of 1.5%, and ongoing annual fees of 1.96%.  Now she is in the fund she will also suffer early withdrawal penalties of 6% if she wanted to move the funds out. It is too early to say if the fund is performing well or not, but in my view the damage has already been done.

My question is - she was "Advised" by a company who are an Approved Representative of SJP, and not by an IFA.  So I wonder how it is possible for the SJP Advisor (Salesman) to get his hands on her pension pot without an IFA?  Is this correct?

How big is his/her pot? I'm surprised people were willing to pay such fees unless there was guaranteed growth by contract.

noviceadviser

Thank you for responses.  Her pot in total was £550k and she was persuaded to transfer £290k of it.  She was not provided with a statement of fees, nor written rationale for transfer.  Does she have a case for mis-selling?  Is it worth perusing this with the ombudsman?

Dazed_and_C0nfused

noviceadviser said:

Thank you for responses.  Her pot in total was £550k and she was persuaded to transfer £290k of it.  She was not provided with a statement of fees, nor written rationale for transfer.  Does she have a case for mis-selling?  Is it worth perusing this with the ombudsman?

Why did she continue with the transfer then?

dunstonh

She was not provided with a statement of fees, nor written rationale for transfer.  Does she have a case for mis-selling?

Yes, based on what you told us.
However, the last person that told me that they didn't get any report, went and found it in the draw with all their other papers.  They got it but didn't read it.

Is it worth perusing this with the ombudsman?

No. That isn't there for this stage of things.   They cannot look at cases until a complaint has been made the firm given a chance to respond.   The FOS is and independent arbiter of complaints where you disagree with the firm outcome.  Its not the first place you go to.

gm0

It is uncommon for SJP agents to fail on the basics of sending the contract and compliance deliverables over by email.  Not opening or reading all attachments to the end is distressingly common.  But it can happen that a sales agent is sloppy.  Worth a look.

The agent is an FA (no I) but still an adviser.  And may have their own little company - federated into SJP. 
Pension advice is regulated for FA as well as IFA.  So there are things they have to do on the road to putting you in their pension product.  Compliance stuff to underpin suitability.  Suitability is a very broad church as it allows pricing like this.  Suitable is not the same as a benchmark price or cheaper than current.

Given the level of buyers remorse in their world.  Required deliverables at sign up is something of a priority for them.

Better news (perhaps)

Pension deferred management charges on exit stopped for new customers (only new not existing) a short while ago. 

So the minor good news may be that those don't apply.  Check date and version of contract.  If an old contract was used wrongly after they had officially stopped - that may be a fault you can go after.  Depends on the timing of joining up if in the past couple of years.  And the cutoff date.

Contribution charges on entry may have been correspondingly higher than they used to be if it is a post exit charges ending for new customers contract.  As that pricing pea will be moved to the other cup if it is not already there.
This based on FCA moving towards ending the exit fee practice entirely.

Mistakes happen people muck things up. Maybe you will find a process fault and a missing FCA mandaed suitability of advice deliverable.  On which to hang a workable complaint. 

Complaining to SJP.  Waiting for 8 weeks for them to reject it (If they think they can prove they did the minimums).  And then to FOS if you actually have anything other than remorse about it being a (very) expensive way to do it.

It is always bit tragic when this sort of breakdown happens early in a new advice relationship (FA or IFA). Initial charges have been paid.  In this case high SJP ones.  If trust is then shattered and the ongoing advice part cannot realistically work with that individual.  Bad salesperson - as they have failed to manage expectations successfully into the next stage.  And if the breach of trust cannot be remedied by swapping Jack for Jill  from the same firm.  Then it's an unhappy outcome.  If a form of advice is still needed then the client needs to find and pay someone else to do it again.  More cost = more unhappy.  But now on a cheaper product. Paysback fairly quickly.  Do the math.

A regular IFA can obviously provide something cheaper as a product. With stuff in it which is likely to be of comparable if also unknown investment performance. 

This SJP one is probably a Polaris tiered fund (if recent) - rather than the older more complex "investment committee / logical portfolios mix/match - pension - and there isn't much in the way of unique magic beans about Polaris tiered funds. 

Being honest.  Unless circumstances here are unusual and exceptional - a complaint of the strength to reverse the whole thing out.  Is going to be a big ask and a hard journey.  Punishing the adviser a little for a service and process error may be easier but this effort and time may be better spent on the new better solution.

squirrelpie

Is there a (14 day?) cooling off period and is she within it if so? If there is she may be able to undo the transaction if she moves quickly.

Groover24

That was probably me :-) although I must admit I did not know that these reports existed; it was placed in a fancy folder and my attention was not drawn to it. I have learnt a lot recently particularly in the content required in these reports and mine seems to be lacking. I have made a complaint to SJP but this has gone well past the 8 weeks allowed to respond to it and is now with the FOS. Not holding my breath for a speedy outcome either way. SJP claim to be training people to handle the complaints but it is anyone's guess when they might get to mine.

dunstonh said:

However, the last person that told me that they didn't get any report, went and found it in the draw with all their other papers.  They got it but didn't read it.

artyboy

Groover24 said:

That was probably me :-) although I must admit I did not know that these reports existed; it was placed in a fancy folder and my attention was not drawn to it. I have learnt a lot recently particularly in the content required in these reports and mine seems to be lacking. I have made a complaint to SJP but this has gone well past the 8 weeks allowed to respond to it and is now with the FOS. Not holding my breath for a speedy outcome either way. SJP claim to be training people to handle the complaints but it is anyone's guess when they might get to mine.

dunstonh said:

However, the last person that told me that they didn't get any report, went and found it in the draw with all their other papers.  They got it but didn't read it.

Well SJP are certainly hiring... this one popped up on my LinkedIn jobs feed recently - lot of guff about reengineering the complaints process.

Funnily enough it's well within my skill set but I'm not commuting to Cirencester... one of several reasons I wouldn't apply actually. Usually this sort of job gets 100+ applications within a couple of days. This one... 12 

 

Albermarle

IamWood said:

noviceadviser said:

I have a friend who was recently advised (badly in my view) to move a pension from a fund in Aviva to a fund in SJP.  She is 2-3 years from retirement.  Her pension pot has now suffered the hit of the initial "advice" fee of 4.5%, plus the product fee of 1.5%, and ongoing annual fees of 1.96%.  Now she is in the fund she will also suffer early withdrawal penalties of 6% if she wanted to move the funds out. It is too early to say if the fund is performing well or not, but in my view the damage has already been done.

My question is - she was "Advised" by a company who are an Approved Representative of SJP, and not by an IFA.  So I wonder how it is possible for the SJP Advisor (Salesman) to get his hands on her pension pot without an IFA?  Is this correct?

How big is his/her pot? I'm surprised people were willing to pay such fees unless there was guaranteed growth by contract.

The SJP salespeople are very well trained, and are good at persuading people to sign up with them.
Many of the prospective clients will not ask the right questions, and will not read the info properly about fees ( or anything else).