St. James' Place - a review…

[CharlesElliott]

GT3Manthey said:

xeny said:

From their web site:

ISA and Unit Trust:"The total of these charges is therefore a charge of 5% of the initial investment and an ongoing charge that for a typical portfolio will be between 1.6% and 1.9%." - no exit charge

For pensions:" 4.5% of your initial investment will be used to pay for initial advice and an annual charge of 0.5% will be charged for the ongoing advice and the relationship with your adviser." "In addition to charges for the advice and the product, there are charges for managing and maintaining your underlying investments. These depend on the funds you choose to invest in." The lowest total charge for managing a pension portfolio asset appears to be 1.91% - https://www.sjp.co.uk/~/media/Files/S/SJP-Corp/doc... presumably in addition to the 4.5% initial charge.


Inflation has averaged what over the past 15 years 1.5 to 2%? That means you've managed a real return on your investments of between 2 and 2.5%. SJP have averaged at least 1.6% plus any initial charge you may or may not be paying. You've taken market risk with your money. They haven't.

They're getting a pretty spectacular deal there IMHO.

Points taken however those charges are negotiable as i said .

I do agree the performance doesnt on paper look stella however i've used the tax breaks over the years i wouldn't have likely used myself without advice.

Maybe i need to check how others have performed during the same period

In any investment situation it is hard to determine the true level of charges.

When you quote 1.6%, that is probably the 'advisor fee', ie how much of the portfolio the advisor takes on a yearly basis for advising you what to invest in. This is already quite a high fee.

For all investment scenarios you have these potential fees and probably more:

Investment charge - what % is taken on new investments before they actually get invested. Varies from 0% to 5%+.

Advisor charge - what you are quoting for 1.6% I suspect. Varies from about 0.5% to 1.5%.

Platform fee - a % charged by the platform that you use to provide a wrapper around the money.

Fund annual management charge - what does the fund charge you in 'overheads' for the fund. Tracker funds tend to be low, active management funds are higher. SJP often creates its own funds with combinations of other people's funds, and these charges can be relatively high.

Fund costs - how much does the fund spend on dealing charges etc.?

Exit fees - if you withdraw at certain times, what % is charged.

Coming back to SJP, I am fairly certain that their '1.6% fee' is just the advisor charge. It is already at the top end. Now compare all the other charges vs Fundsmith / FundsNetwork / HL whoever and it adds up to a significant amount. And whilst we are on SJP, it seems strange to me that people would want to invest with an organisation that can only recommend its own funds? It's like wanting a new car but you can only go to Mercedes and ask them to recommend a model within their range. Wouldn't you want to someone to advise you on a suitable car for you needs covering all manufacturers?

[chip*]

Dnlm said:

Those comping SJP to Fundsmith are also doing apples to oranges.

Yep, happens all the time on this forum, and I doubt it will ever change...

Back to the topic of SJP, here is a recent article on the SJP fund performance in general:
https://www.yodelar.com/insights/st-jamess-place-r...

Edited by chip* on Friday 14th May 21:36

[GT3Manthey]

chip* said:

Yep, happens all the time on this forum, and I doubt it will ever change...

Back to the topic of SJP, here is a recent article on the SJP fund performance in general:
https://www.yodelar.com/insights/st-jamess-place-r...

Edited by chip* on Friday 14th May 21:36

That makes for very st reading for SJP no question.

So far, performance VS others aside, the advice regarding using tax breaks and making them reduce fees i've been happy with but having spent a little time this morning reading about Pension Protection with Wealth Managers raises new concerns.

I have a very sizeable amount of money with them ( mainly my pension pot) so with the compensation scheme being just 85k in the event a wealth manager goes down ( unlikely according to that article) how do others feel about this ?

SJP do have 156Bln under management so the largest UK Wealth Manger which makes me a little more comfortable than being with a smaller outfit so maybe safety plays a part over chasing larger gains.

I'm not defending SJP just to be clear, but i do have concerns being with a smaller WM for obvious reasons.

[chinnyman]

I started off with sjp. My biggest bugbear was the time it took for me to find out charges. That was enough for me to jump ship. I wish I was clever enough to actually read the paperwork on initial charges.
My yearly fee was 1.6% which wasn't that much compared to others I have met in the Cotswolds.
The pension performance was above average but from memory worse than my L80 ISA.

[xeny]

GT3Manthey said:

i do have concerns being with a smaller WM for obvious reasons.

Typically investments are ring fenced so "shouldn't" be impacted if the WM goes down as you put it. If you're that concerned you could split up your pension into £85K chunks - it's only an up to 6% exit charge for any funds you want to take elsewhere.

I'm missing why you feel you need a WM rather than just a broker(s) though?

I know how much I'm paid. I can calculate how much SJP would charge to manage my assets.

I feel reasonably confident that I can figure out tax breaks in less time than it would take me to earn enough to pay SJP's fees on my assets compared to a lower cost alternative.

[GT3Manthey]

xeny said:

Typically investments are ring fenced so "shouldn't" be impacted if the WM goes down as you put it. If you're that concerned you could split up your pension into £85K chunks - it's only an up to 6% exit charge for any funds you want to take elsewhere.

I'm missing why you feel you need a WM rather than just a broker(s) though?

I know how much I'm paid. I can calculate how much SJP would charge to manage my assets.

I feel reasonably confident that I can figure out tax breaks in less time than it would take me to earn enough to pay SJP's fees on my assets compared to a lower cost alternative.

Tks. I had suspected that the actual Pension element was ring fenced but wasn't 100% sure.

Re tax- as mentioned earlier in the thread a number of years ago i'd concentrated on paying my mortgage off as rates were a lot higher than current levels so when i then started to thing about savings and pensions and was contacted by SJP them pointed out that i had not used all my years tax allowances so lump sums ( 100k was one) was put into my pension fund with them and the tax amount was added back on.

I had considered going through an IFA but for a number of years i've stuck with SJP as i'm just too busy and here i am .

tks for the post Xeny

[Mr Pointy]

GT3Manthey said:

Re tax- as mentioned earlier in the thread a number of years ago i'd concentrated on paying my mortgage off as rates were a lot higher than current levels so when i then started to thing about savings and pensions and was contacted by SJP them pointed out that i had not used all my years tax allowances so lump sums ( 100k was one) was put into my pension fund with them and the tax amount was added back on.

I had considered going through an IFA but for a number of years i've stuck with SJP as i'm just too busy and here i am.

If that's the extent of the "tax planning" that SJP have done for you then it's pretty appalling how much it's cost you. Carry Forward of previous years pension contribuiton tax allowance is a very basic financial tool that many amateur investors on here know about. Hargreaves Lansdown even have a free page about it:
https://www.hl.co.uk/pensions/contributions/carry-...

I'm sorry if I come across as a bit sharp but I'm just trying to shock you into really looking into what you are getting for your money with what is possibly the most important financial asset you have.

If you want to talk to someone about your situation look at this thread & give Nick at IM a call. It's free, no obligation or selling involved:
https://www.pistonheads.com/gassing/topic.asp?h=0&...

To others I realise that Fundsmith & SJP aren't the same thing but I use it as an example to try & get posters to really question what they are getting for their money from these sort of institutions.

[BlackG7R]

After discovering Jack Bogle (Vanguard) a few years ago, and listening to him talk about what he set out to achieve for investors, it always makes me angry whenever I see or hear anything about SJP. Jack would be turning in his grave !!

Edited by BlackG7R on Sunday 16th May 01:50

[mikeiow]

Minor ressurection:
https://twitter.com/paullewismoney/status/14369429...
More interesting behaviours regarding SJP.....marketed to our military as Independent Financial Advisors, no less
Disgraceful really.

Lying to the general unwashed public is almost expected from some finance companies.
Lying to those busy putting their lives on the line around the world feels pretty despicable to me!

[dmahon]

Im no expert, but I find the whole wealth management world a real head scratcher when Vanguard charge 0.2% on some of their funds.

By the time you have advisor fees, platform fees, fund fees etc, there is no way on gods green earth someone like SJP will consistently beat lumping it in LS80 or LS100 directly with Vanguard. And even if they did, I’d rather lose out on a tiny uplift than let half of the city stick their fingers into my pension.

Can someone explain what I’m missing?

[BobToc]

Ah yes, but Vanguard don't send a nice man round once a quarter to sweet talk you.

[chinnyman]

dmahon said:

Im no expert, but I find the whole wealth management world a real head scratcher when Vanguard charge 0.2% on some of their funds.

By the time you have advisor fees, platform fees, fund fees etc, there is no way on gods green earth someone like SJP will consistently beat lumping it in LS80 or LS100 directly with Vanguard. And even if they did, I’d rather lose out on a tiny uplift than let half of the city stick their fingers into my pension.

Can someone explain what I’m missing?

Most people are too scared to do it themselves or even be bothered to research it.

[bitchstewie]

dmahon said:

Im no expert, but I find the whole wealth management world a real head scratcher when Vanguard charge 0.2% on some of their funds.

By the time you have advisor fees, platform fees, fund fees etc, there is no way on gods green earth someone like SJP will consistently beat lumping it in LS80 or LS100 directly with Vanguard. And even if they did, I’d rather lose out on a tiny uplift than let half of the city stick their fingers into my pension.

Can someone explain what I’m missing?

I think, and happy to be corrected, the extraordinary part is that they charge for putting money in, charge for managing it, and charge if you take it out before an agreed time period.

[VR99]

dmahon said:

Im no expert, but I find the whole wealth management world a real head scratcher when Vanguard charge 0.2% on some of their funds.

By the time you have advisor fees, platform fees, fund fees etc, there is no way on gods green earth someone like SJP will consistently beat lumping it in LS80 or LS100 directly with Vanguard. And even if they did, I’d rather lose out on a tiny uplift than let half of the city stick their fingers into my pension.

Can someone explain what I’m missing?

I was thinking the same but not everyone has the time to learn/research and/or they assume it will be be too difficult.
A few of my wider family started using SJP recently and I asked the exact same question, why would you pay these guys when DIY investing is fairly easy and of course potentially much cheaper. The lack of time was cited as they run a couple of businesses but probably don't have the context or understanding to realise (yet) just how much they are paying out in fees. If I go back maybe 7-10 years...I was exactly the same, didn't have a clue so it's not really surprising.

Edited by VR99 on Sunday 12th September 16:48

[xeny]

BobToc said:

Ah yes, but Vanguard don't send a nice man round once a quarter to sweet talk you.

This - I know someone why doesn't have enough feel for number to understand the imapct of % fees, and also likes that she gets flowers and similar through the year, without really thinking through that she's ultimately paying for those gifts...

[mikeiow]

VR99 said:

I was thinking the same but not everyone has the time to learn/research and/or they assume it will be be too difficult.
A few of my wider family started using SJP recently and I asked the exact same question, why would you pay these guys when DIY investing is fairly easy and of course potentially much cheaper. The lack of time was cited as they run a couple of businesses but probably don't have the context or understanding to realise (yet) just how much they are paying out in fees. If I go back maybe 7-10 years...I was exactly the same, didn't have a clue so it's not really surprising.

I absolutely get that many people are either too busy, or to disinterested/scared to manage their own money. Often both!

I do, however, find it odd/sad when they get sucked into 'wealth managers' who (IMHO, of course!) are the ones accruing the big wealth from their clients...

It should either be DIY, or IFA, not FA.....with the I *clearly* being whole of market Independent.

[chip*]

dmahon said:

Im no expert, but I find the whole wealth management world a real head scratcher when Vanguard charge 0.2% on some of their funds.

By the time you have advisor fees, platform fees, fund fees etc, there is no way on gods green earth someone like SJP will consistently beat lumping it in LS80 or LS100 directly with Vanguard. And even if they did, I’d rather lose out on a tiny uplift than let half of the city stick their fingers into my pension.

Can someone explain what I’m missing?

Company structure is one reason as Vanguard is a mutual (not so in UK for regulatory reason, but UK fees are still very competitive), so the primary interest are the shareholders who are the fund holders, hence they are keen to keep fees as low as possible. Unlike SJP who are a PLC (shareholders to satisfy), or Fidelity who are still privately owned by the Johnson family and the employees, who in theory could charge as much or little as they like. Small read-up below on Vanguard's history:

https://www.investopedia.com/articles/investing/11...

Also, the business model is quite different too as the SJD fee is an all-in package i.e. investor sit back and do nothing (*), whereas Vanguard offerings was index funds targeting the DIY investors i.e. you have to do some legwork, who can now seek investment advice for an additional fee.

• Popular option for many who have little interest in investments (laziness too?), or maybe time short, which explains why SJD is one of the biggest UK fund managers with GBP130 bio AUM.

[Simpo Two]

chip* said:

* Popular option for many who have little interest in investments (laziness too?), or maybe time short, which explains why SJD is one of the biggest UK fund managers with GBP130 bio AUM.

And I'd suggest more aggressively marketed. People might not think 'Good heavens I need an IFA, I shall go and find one' - but a nice mailshot landing on the mat makes it easy. The easier you make it for people, the more likely they are to hand you money. And getting a letter from a 'wealth manager' is flattering.

[DonkeyApple]

Marketing plays a key role at both ends, ultimately, management versus self manage target quite different wealth segments but with the majority of investors sitting between the two clear points of delineation where each product starts or abruptly loses its value.

For the average investor of average wealth, say £200k-£2m ex property the true key isn't financial management but tax management. Self selection of sensible funds, weightings and intelligent management are not the complex elements today. However, tax management is critical because in reality this is where the true returns are made followed by cost control.

[CharlesElliott]

Just had another complaint against SJP come across my desk - upheld and compensation on the way.