St James's Place - HELP!!

EdInvestor

dunstonh wrote: »

Say you are in a fund with a yield of 5% and the 5% is reinvested (as it usually would be in most investment bonds) and then you draw 5% out then you are back where you are. Compare that to the unit trust version of the same fund with a yield of 5% which is paid direct to you. Whats the difference?

In teheory nothing, but you will usually find that a fund invested in shares paying an overall 5% yield will not normally translate into a 5% income for you - as much as 3 or 4 percentage points of that yield will disappear in charges and tax.


As far as tax is concerened the OP will have a CGT allowance of 9k a year, so he's easily covered there and if he's on basic rate tax he will pay nothing on any income. So no tax on the unit trust, compared with 20% unavoidable non reclaimable tax on gains in the bond.

jem16

EdInvestor wrote: »

.....and if he's on basic rate tax he will pay nothing on any income. So no tax on the unit trust, compared with 20% unavoidable non reclaimable tax on gains in the bond.

Unless the income from dividends pushes him into higher rate tax and then he pays another 22.5% tax.

As far as tax is concerened the OP will have a CGT allowance of 9k a year

Only if he can be bothered using the CGT allowance each year. If he leaves the investment to grow for a few years it will soon go over the allowance.

caveat_emptor

hedger wrote: »

at the time I was assured that St Jamess Place would monitor the markets and switch my money around in times likes this - I dont see much evidence of this. ..

This was my experience when an IFA (company not an individual) set up my pension. When I challenged the IFA about their lack of activity I was told that they were not an active pensions manager. In other words they were quite happy to see my portfolio losing money and to take my commission but offer very little in return. I ended our contract and have since managed my own portfolio. The experience made me very wary of IFAs.

TBeckett100

LEAVE sjp, its a huge profit making old boys club. those funds havent changed for donkeys years, so much for an investment panel. check your advice letter - you chose those funds!

TBeckett100

EdInvestor wrote: »

( that's why it's tax free, it's not income at all.)
.

umm, tax deferred for up to 20 years or earlier on surrender.

dunstonh

Well, i agree it would be a struggle for an IFA to become an accountant.
7 year cima, getting chartered and all that. But many accountants and indeed lawyers are qualified to give financial advice and do.

Given the number of times I have had to correct errors by accountants when they have crossed over its probably a good idea for accountants to stick to what they know. That said, I have a good relationship with two accountants and we are often helping each other out in our respective areas. The largest accountant locally employs IFAs and none of its accountants are authorised for investment advice.

There are of course IFAs who have further qualifications and indeed are chartered. Expect that to increase in the coming years. Indeed, it may be a requirement to continue to use the IFA tag.

And with all due respect to your chosen profession, taking commissions, on products sold (and i know you make full disclousure) somewhat stretches the definition of the word 'independant'.

You make assumptions that all of us rely on commission. A large number are fee based or work to agreed remuneration. The fact you paid doesn't change if you are independent or not. After all accountants and solicitors get paid too.

This was my experience when an IFA (company not an individual) set up my pension. When I challenged the IFA about their lack of activity I was told that they were not an active pensions manager. In other words they were quite happy to see my portfolio losing money and to take my commission but offer very little in return. I ended our contract and have since managed my own portfolio. The experience made me very wary of IFAs.

You saw a transactional IFA. Old school basically. TCF should get rid of a lot of that and the retail distribution review should get rid of the rest. NMA IFAs [or servicing IFAs] are the biggest growth area within the profession. Still a minority though estimated at around 25% currently.

Only if he can be bothered using the CGT allowance each year. If he leaves the investment to grow for a few years it will soon go over the allowance.

This is important because it doesn't happen enough. The fund supermarkets have provided data to confirm that people are not utilising their annual CGT allowances anywhere near enough.

jem16

ianmr65 wrote: »

All financial advisers sound plausible, and even convincing or they wouldn't last long.

That's why you need to be speaking to someone who's independant. IE does not work on commission, or even part commision. That's why he will expect to be paid for his time. The reason for choosing someone who's an accountant, is that he may need to look at your entire financial situation, he will be quailified, and he will be best placed to judge what to recommend for your own specific needs.

Have to agree with Dunstonh regarding finding a specialist investment IFA rather than an IFA/accountant.

My brother is a Chartered Accountant and when I asked him for some financial advice years ago after receiving a lump sum, he said he was not qualified to do that. He was happy to give me some ideas but nothing more and insisted I see someone more specialised. Instead he recommended a tax specialist accountant who in turn said that he would recommend an IFA when I was ready. The accountant could help with the tax side of things but not investments.

Always better to see an investment specialist IFA who will look at the whole financial picture and decide the best investment based on that.

Blowsy

hedger wrote: »

I am very very worried (like millions Im sure) about the recent collapse of the markets. I made a few pound (£220K) from property a couple of years ago and invested in May 2006 through St Jamess Place into

hedger wrote: »

ISAs - £14,000
Investment Bond (made up of SJP/GAM Managed, SJP THSP Managed and SJP Invesco Perpetual managed) - £160,000
Unit Trust Feeder (UK & General Progressive / UK High Income / Recovery) - £46,000

I have taken a monthly income from the Bond. The investments were going well until recently and have now lost any profit made (ive £210,000 left) so any income I now take is coming straight out of my own money.
Im 2 years into this investment and the doom merchants say its only going one way - further down. Should I take the 3% penalty and pull the lot out and put it a guaranteed interest rate account or should I stick in there?
this is every penny I have!!!

St. James’s Place are a quality instituation and I’ve nothing but the utmost respect for them. This board places far too much emphasis on the importance of advisors being “Independent” which, quite frankly is not possible.

You can’t blame St. James’s Place or your advisor in my opinion, here’s why…

Investment Bond Funds
SJP/GAM Managed - AGR Since Launch 6.9% vs 1.90% sector - 1st Quartile (Top 3%)
SJP/THSP Managed - AGR Since Launch 9.8% vs 6.70% sector - 1st Quartile (Top 1%)
SJP Invesco Perpetual managed - AGR Since Launch 6.4% vs 6.6% sector - 3rd Quartile (Top 64%)

Unit Trust Funds
SJP/UK & General Progressive - AGR Since Launch 11.7% vs 9.3% sector - 1sr Quartile (Top 17%)
SJP/UK High Income - AGR Since Launch 11.3% vs 10.1% sector - 1st Quartile (Top 25%)
SJP/Recovery - AGR Since Launch 12.5% vs 5.2% sector - 1st Quartile (Top 1%)

Clearly you don't pick a fund purely on past performance but these are all top quality funds with highly rated managers (Neil Woodford, Andrew Green etc) are top quality. Can’t argue with the facts.

You’re in a medium-long-term investment not a short term investment and you’re only two years in. The market is throwing its toys out of the pram at the moment and there are very few funds out there with equity exposure that are performing well at the moment.

Ask your Advisor for a review meeting – explain your concerns and ask him to provide some documentation that shows the overall weighting of your portfolio and discuss options with him.

hedger wrote: »

The financial advisor ive been using (who seems to know what hes talking about) is a St Jamess Place partner so obviously only pushes their products - thats what Im worried about

As I understand it, St. James’s Place don’t have their own products as such. Instead, they pay who they deem to be the best fund managers at the best fund management houses to manage their client monies - which is why you’ll see Invesco Perpetual, GAP, THSP, Jupiter, Schroders, Newton etc on their books.

This system of fund selection is proven to have produced success (see above).

TBeckett100 wrote: »

LEAVE sjp, its a huge profit making old boys club. those funds havent changed for donkeys years, so much for an investment panel. check your advice letter - you chose those funds!

This is simply rubbish, their approach to investment management is a sound process and yields decent results. The management of the funds do change when required though the investment house occasionally remain the same. So you may not even realise there’s been a change.

hedger wrote: »

at the time I was assured that St Jamess Place would monitor the markets and switch my money around in times likes this - I dont see much evidence of this. Still Im only 2 years in and they do say its a mid-long term investment. Its just a very worrying time for me.....

It’s a worrying time for everyone at the moment and there aren’t that many fund managers making money (unless they have high exposure to commodities)
Mid-long term = 7-10+ yrs and you’re only 2 years in – don’t panic!!

hedger

Thanks guys for all the advice and opinions. It really can get confusing!! I must say that prior to the "credit crunch" things were moving along quite well with SJP - the £220K was worth about £240K after 18 months (I'd taken about £10K of it in income). Factoring everything in (fees, income etc) it is worth £210K now.
Im arranging a meeting with the SJP guy to review my "portfolio" and get his opinion. I'll let you all know what his advice is.

ianmr65

dunstonh wrote: »

You make assumptions that all of us rely on commission. A large number are fee based or work to agreed remuneration. The fact you paid doesn't change if you are independent or not. After all accountants and solicitors get paid too.

I never make assumptions. i know some IFA's do not rely on commissons. I also know that many IFA's do work to agreed (with client) commission from provider. And some do not declare commission/overriders they are paid at all.
This in my view is an area for a potential conflict of intrest.

I also agree that every one needs to be paid. The question is who is doing the paying. If I pay an agent through commission, on a sale. I expect him to be working for me, not the other party. Otherwise why would i be paying?

As long as IFA's continue to work even partially through commissions, this
a) Skews fee schedules.
b) opens up the potential for non client specific overriders
c) encourages providers to believe the commission rates influence advice
d) calls into question independance.