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  • FIRST POST
    • WTY433
    • By WTY433 5th Aug 18, 6:41 PM
    • 22Posts
    • 1Thanks
    WTY433
    Trf from FS pension via St James Place
    • #1
    • 5th Aug 18, 6:41 PM
    Trf from FS pension via St James Place 5th Aug 18 at 6:41 PM
    I have read some great reviews and thoughts on here and wondered if any one out there had any thoughts on my situation. This is my 1st post so go easy on me.

    I am 55 and am in the fortunate position of not having to work anymore and I have enough income to live on through rental income.

    I also have a frozen final salary pension that has a normal payout age of 60. The income this will give me will naturally be taxed and theoretically I could manage without it.

    I recently spoke to an adviser from St James Place and although the advice and ideas he gave me make a lot of sense I am wary. Especially after reading all the comments on other posts about their charges.

    My dilemma is that the fund in question is worth a lot of money. (about 625,000) this increased by approx 50,000 last year and 100,000 the year before. These big rises are as a result of the transfer value being linked to guilt rates which are low if i understand it right.

    My thoughts are that the cost of gilts like everything else only have one way to go so it makes a lot of sense to transfer my fund out whilst it is still high. This also makes sense as the fund i am told is IHT friendly as there is a chance i wont need most of the money in there. I realise i will lose the guarantee of a pension for the rest of my life but im happy to take that chance due to my situation (Not relying on this money)

    The Adviser said that the only charges I will pay are the AMC and TER (about 1.71% in a balanced fund). They said they would take about 2% commission not the 4.5% stated on thier terms of business letter but i'm not sure how that would affect me if i'm only paying the AMC. They then said 0.5% per year. From what Ive read on other threads this apparently is quite high (the annual charge) but

    When i questioned them on their performance as Id read somewhere it was dire in between our meetings, they said the poor performance was on other funds and that the main portfolios they would be recommending put together by members of thier investment committee were strong (better than average) and they had portfolio comparisons to back this up which they left with me. They focused a lot on ARC as an independent benchmark and how they have outperformed thier rivals consistently many cases.

    It all looked impressive and i do have some FS experience but am very wary. Its a lot of money and sadly these days you can't trust anyone.

    I accept that good advice costs but the "Approx 2%" verbally stated is 12,500
    even 0.5% is 3000 per year for a fund that I intend to leave (especially with exit fees) seems a lot.

    Any thoughts / comments are greatly appreciated as this will be the biggest financial decision I have ever made in my 55 years.
Page 2
    • WTY433
    • By WTY433 6th Aug 18, 7:28 PM
    • 22 Posts
    • 1 Thanks
    WTY433
    Three charges
    In the case of SJP they have said that the only charges are the AMC and TER .
    Still too much but all other charges are incorporated into these.

    That's what prompted my question as an IFA may say charge 2500 then 0.4% (Lower charges) so that's sounds much better but if I'm not mistaken there would be these other charges on top including AMCs within the funds that the IFA selects plus other you mentioned i hadn't even heard of. Oh my ....My head hurts.

    The SJP proposition looks attractive to the untrained eye as these "Only charges and no other seem to cut out trying to add up the three mentioned above.

    They also have some literature that seems to prove they out perform the market.
    Again accepting everything that been said. (Bias, exit fees, limited fund choice etc)
    I'm not siding with them, just devils advocate to try and understand
    • dunstonh
    • By dunstonh 6th Aug 18, 8:01 PM
    • 96,122 Posts
    • 63,925 Thanks
    dunstonh
    In the case of SJP they have said that the only charges are the AMC and TER .
    Still too much but all other charges are incorporated into these.
    They should be quoting OCF, as mentioned previously. However, the point on charges is that SJP use a technical loophole to still display charges in a way that was banned in 2013. Where the salesforces is integrated with the product provider (ie. all part of the same company), they do not need to breakdown the charges in the same way an IFA would.

    You add the unbundled charges of the IFA, fund and platform to give you a total. The SJP is just a total.

    The SJP proposition looks attractive to the untrained eye as these "Only charges and no other seem to cut out trying to add up the three mentioned above.
    Yet the "three" is exactly as the regulator want it. Indeed, a recent EU directive made it five as there are also transaction costs and other costs that need displaying too. Although both of those can largely be ignored.

    They also have some literature that seems to prove they out perform the market.
    Sales literature from SJP is very slick. It will usually beat an IFA in terms of quality as glossy brochures used by the whole salesforce are easy to print. Whereas an IFA with access to over 30,000 investments and hundreds of products cant keep glossy material and they can only print on the office printer.

    Any charting and stats that allows you to select the dates and data can make something look bad or good depending on the context.

    For example, I have just completed a review where we are switching a fund and the fund being moved into is performing lower than sector average consistently. However, the fund is in the volatility managed sector which is a catchall for many funds across the whole risk scale. So, the sector average has absolutely no relevance. However, another fund in that sector is showing the sector average on its factsheet as it highlights it is performing above the sector average. It is higher risk than most funds in that sector so of course it is performing better. Context of data is important.

    I know someone who did a short period at SJP and he said it is a bit like a cult. Everyone is spoon fed from the top and brainwashed into believing what they are told. Only told the positives, not the negatives and data was selective to show them in the best light.

    This really shouldnt need repeated conversation. IFA or DIY should be the choice. Not sales rep. It may be that you dont find the first IFA to your liking but in that case, try the next IFA.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • WTY433
    • By WTY433 6th Aug 18, 10:59 PM
    • 22 Posts
    • 1 Thanks
    WTY433
    Thanks to everyone who has responded to this. The information has been invaluable to me and because of it I'm much clearer in what i need to be doing next.
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