St. James' Place - a review…
Discussion
OddCat said:
Funny how we don't get too many unhappy SJP clients on here though. Just a load of people who seem to have a beef with SJP without having actually been a client. Wierd really. Bit like constantly slagging off Vauxhall having never owned a Vauxhall.
That's because financially switched off people don't frequent these type of forums and it's those that SJP are so good at acquiring as clients. They are excellent at shmoosing and if you don't know any better it all sounds great. Many stay for years not knowing they could get higher returns for less elsewhere. Those that start taking an interest in their investments usually run away from SJP at the first opportunity when they see the light.On the adviser side the vast majority of the ones I've seen migrate to SJP are at the lower end of the talent pool, often when they aren't making it at their current firm. They go there for pure personal financial gain, essentially sold the dream just like they then go on to do with clients.
SJP were still having jolly holidays and watch giveaways long after everyone else gave up such shady practices. They only change when forced, not because they like doing the right thing.
PS: I slag off Vauxhall because they are rubbish, owned one once and it just confirmed what I already knew...
Putting the SJP specifics to one side it's easy to underestimate what a mountain this stuff can seem like when you first start thinking about it if you've never thought about it before.
It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea.
There's more options available to people these days but I bet you didn't have to go back too far for the "normal" thing to be to find a nice friendly advisor who then because "your man" for all things financial as you approached retirement or whatever it was.
It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea.
There's more options available to people these days but I bet you didn't have to go back too far for the "normal" thing to be to find a nice friendly advisor who then because "your man" for all things financial as you approached retirement or whatever it was.
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hstewie said:
hstewie said: Putting the SJP specifics to one side it's easy to underestimate what a mountain this stuff can seem like when you first start thinking about it if you've never thought about it before.
It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea..
Could you take the time to list the challenges? I know I'm prone to saying that kind of thing, and knowing where the obstacles are might make me less unhelpful.It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea..
xeny said:
Could you take the time to list the challenges? I know I'm prone to saying that kind of thing, and knowing where the obstacles are might make me less unhelpful.
Even just a few years back if you were starting from zero knowledge and took the time to try to look into this stuff I'd have said there was a pretty heavy tilt towards active investing and trying to pick the "hot fund of the month" and so on.I knew what a cash ISA was but I remember looking at lots of fund factsheets knowing what bonds and equities meant but not really knowing how they worked and having no idea why a fund with all its holdings in tech or the UK might not be great idea etc.
I think my first toe in the water was Fundsmith and Lindsell Train i.e. buying what was being talked about because it had done so well for that past five or so years.
Looking back at my old threads I was asking about LifeStrategy and active v passive but went on the whole "I know best" journey of actives to wealth preservers to defensives to barbells and have come full circle to where the whole lot is now in cheap indexes or "fund of fund" funds made of passive funds (HSBC Global Strategy type funds).
I look now and I'm paying around 0.2% on the entire pot and instead of reading or watching articles about geographies and sectors and trying to pretend I understand it I'm reading and watching articles about psychology and fees and things that I hope will let me stay the course.
I find myself biting my tongue when I read threads on here where people think they can sell up and pop the lot in gold and buy in later once the S&P has tanked or whatever tea leaves they've been reading has materialised.
I think it would be an interesting exercise to see if I'd have ended up better off financially if I'd visited an advisor initially as I've certainly made a few mistakes and some of them costly but not super costly more what I'd call frustrating or learning a lesson.
Comparing that to paying 1.5 - 2% every year forever and let's just say I'd be paying someone a hefty percentage of what I need to live
OddCat said:
So the main issue for the SJP haters on here is that SJP are more expensive than similar services elsewhere?
It's not about hate. I'm sure there are some who actually hate firms but the whole 'if you're not a diehard fan you must be a hater' is a very council way of living or thinking about things and it does seem at odds with a very prestigious financial services brand that's named after a valuable place that itself is named after a saint. The name alone tells you that they are important players of great wisdom who work with very special clients of great intellect.
Although it doesn't does it. It reveals the exact opposite which is that the names of the founders had no value and that from the outset they were gunning for new money muppets the sort who pay a premium for association to things that make them feel closer to the upper middle classes they're so desperate to be accepted by.
Golden rule of punting finance to that retail segment is to name the business after an appropriate location with generally an SW postcode. A little street around Green Park or Knightsbridge can be ideal. The next best thing if you can't afford the non air conditioned cupboard of a serviced office in one of those places is to name the business after a land owner or someone of royalty. This naming system is catnip to particular new money types who have nowhere near the sums required for proper services but at the same time a need and desire to be paying the fees and receiving a brand association.
And it worked for years as the enormous wealth of the Boomer segment was spread far and wide and amongst many people who are naturally drawn to these types of selling mechanisms. We all know them, the chap who will pay money to get closer association to the segment of society they really wish to be part of.
So where you can flog stuff to one wealthy segment via association to people off ov TV, with this group you use the SW London street name or landed gentry name approach. Once they give you their phone number then you just use the same mechanism as selling carbon trim, which is to just feed the ego while simultaneously calling them poor to their face. Why, after all would someone think fees were too high if they were of the impression that people far superior to them were happily paying them etc.
Anyway, SJP was a hugely successful and brilliant business that rode the Boomer wave brilliantly. It saw the growing market of people with good money but not enough to buy in to the top end but who had a need to be seen to be associated with key branding for their own benefit or for use in social settings but it is probably fair to say that this particular type of model has peaked anyway.
The future isn't taking names from SW London streets or names associated with land ownership or royalty. The future is association with famous prostitutes or thieves based on how many objects they put on display. And the naming trick is to use an invented word currently with some vowels removed but you must put 'digital' at the front.
The great thing about flogging digital wealth management over street or landowner named wealth management is that the children of the clients of SJP et all understand even less and you can even tell them there are no fees at all while gauging them on the back end for percentages that would make an SJP travelling salesmen weep.
Is SJP bad? No. It's just a business that was set up and run along a basic formula to attract a very specific client demographic and it was brilliantly done and hugely successful.
Does SJP have a future? Not really. Not in its current guise. The looming generation of fresh pensioners are far less interested in the whole London or landed gentry naming thing and to target them for fees just requires approaching with a different spin. And the generation behind that looks to have total repulsion to that naming veneer altogether.
bhstewie said:
hstewie said: Putting the SJP specifics to one side it's easy to underestimate what a mountain this stuff can seem like when you first start thinking about it if you've never thought about it before.
It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea.
There's more options available to people these days but I bet you didn't have to go back too far for the "normal" thing to be to find a nice friendly advisor who then because "your man" for all things financial as you approached retirement or whatever it was.
I guess it depends where you are in life - l said earlier, hopefully SJP customers are dealing with more than a simple SIPP and ISA.It's very easy now to sit here saying "just open a Vanguard account and pop money in LifeStrategy 60 regularly" or whatever.
I promise you I didn't find it that simple to get my head around a few years back when I realised cash in the bank wasn't a sensible idea.
There's more options available to people these days but I bet you didn't have to go back too far for the "normal" thing to be to find a nice friendly advisor who then because "your man" for all things financial as you approached retirement or whatever it was.
It’s taken four months to get everything in place for my retirement and even now the only money that’s moved was into an EIS that had to be done before the end of the tax year.
The new meat world has been easier for advice firms since the 2015 pension freedoms, as it opened up the >55s to do something other than an annuity come the time to take benefits. This coincided with the wider financial conditions a that meant annuities/DBs were not as attractive as investing on the open market. Perfect storm for the advice world.
The pendulum's swung back the other way now but annuities are unattractive to the advice world because there's no ongoing turkey. DBs are largely off limits unless your business plan is to rape and pillage for a couple of years then head to Belize for retirement.
The pendulum's swung back the other way now but annuities are unattractive to the advice world because there's no ongoing turkey. DBs are largely off limits unless your business plan is to rape and pillage for a couple of years then head to Belize for retirement.
Forester1965 said:
The new meat world has been easier for advice firms since the 2015 pension freedoms, as it opened up the >55s to do something other than an annuity come the time to take benefits. This coincided with the wider financial conditions a that meant annuities/DBs were not as attractive as investing on the open market. Perfect storm for the advice world.
The pendulum's swung back the other way now but annuities are unattractive to the advice world because there's no ongoing turkey. DBs are largely off limits unless your business plan is to rape and pillage for a couple of years then head to Belize for retirement.
Getting 2%/annum on £1m AUM by just offering a geezer a 'free' smoke salmon sandwich at a golf course that would never accept them as a member was arguably the golden era of wealth management. But don't underestimate digital wealth management, the AUM is much smaller per client but they're even thicker and they're legion. They'll send their money to any third world location, willingly pay vast hidden fees without a care in the world and even spaff themselves online at images of the DWM owner's car collection never once realising that the Lambo, man bangle, teeth and hair plugs are actually theirs. The pendulum's swung back the other way now but annuities are unattractive to the advice world because there's no ongoing turkey. DBs are largely off limits unless your business plan is to rape and pillage for a couple of years then head to Belize for retirement.
We are in an even more golden era of mug rinsing it's just that they only have $1000.
It's the real backroom money for nothing that's the golden ticket- it doesn't come with the regulatory advice strings attached. If Billy Boffing executes a bad trade and with it his own wealth, so be it, the FCA won't be donning the raid jackets and knocking at the door.
SJP know this like any other and the advice side of the business has rarely made any money to speak of. The whole advice side of the business is a cost of sales for the snake oil behind it. The franchise model, academy, partner loans and retirement buyout model is entirely designed to keep the cash in the ecosystem behind. In their world the 'Advice' is no better than you'd get from the 20 something sales lad flogging you X Guard with your new Mondeo come repmobile changeover time.
SJP know this like any other and the advice side of the business has rarely made any money to speak of. The whole advice side of the business is a cost of sales for the snake oil behind it. The franchise model, academy, partner loans and retirement buyout model is entirely designed to keep the cash in the ecosystem behind. In their world the 'Advice' is no better than you'd get from the 20 something sales lad flogging you X Guard with your new Mondeo come repmobile changeover time.
Sheepshanks said:
I guess it depends where you are in life - l said earlier, hopefully SJP customers are dealing with more than a simple SIPP and ISA.
It’s taken four months to get everything in place for my retirement and even now the only money that’s moved was into an EIS that had to be done before the end of the tax year.
Yeah I get that and I'm certainly not ruling out a point in my life where I might think I want some advice and I can imagine how it might be easy to be swayed by the whole percentage of AUM rather than ponying up a lump sum for fixed cost advice It’s taken four months to get everything in place for my retirement and even now the only money that’s moved was into an EIS that had to be done before the end of the tax year.
I do wonder what percentage of customers of SJP and advisors in general have complex needs v those who "only" have an ISA and possibly a pension and some other investments.
I think some of the people on the thread work in the industry so would have an idea?
Maybe as none of you are actually SJP clients, nor have had a bad experience with SJP, perhaps rather than wasting time pointlessly criticising them, the smart thing to do would be to see whether you can make some money from the shambles that its share price has become.
SJP shares were trading at £17 each a couple of years ago. With 550m shares in issue that valued the business at £9.3 billion. Now the share price is £4.60 so the business is worth £2.5 billion.
If they have £175 billion under management and make, say, an average of 0.8% gross, that's £1.4 billion gross revenue. Plus some extra bits for new business initial fees (that they'll soon start to get following the proposed fee changes) you are looking at £1.5 billion+. Less overheads of up to £1 billion (but soon to be chopped as the business changes and loses a load of overpaid managers etc) equals at least £500 million net profit. Which is a PE of 5. Or better.
Yes, this year is a write off with the compo likely to mean zero profit - but that's already in the share price.
These could easily crawl back up to £7 a share in the next 18 months. They'd still be £10 less than their peak. There is also the possibility or a takeover too from someone (maybe Private Equity) wanting to get their hands on the £175 billion to manage and who would easily slash the overheads. So that £7 could arrive more quickly (a bid less than that wouldn't be acceptable to long term shareholders).
£4.60 to £7.00 in 18 months. A 50% gain.
Watch this space......???
SJP shares were trading at £17 each a couple of years ago. With 550m shares in issue that valued the business at £9.3 billion. Now the share price is £4.60 so the business is worth £2.5 billion.
If they have £175 billion under management and make, say, an average of 0.8% gross, that's £1.4 billion gross revenue. Plus some extra bits for new business initial fees (that they'll soon start to get following the proposed fee changes) you are looking at £1.5 billion+. Less overheads of up to £1 billion (but soon to be chopped as the business changes and loses a load of overpaid managers etc) equals at least £500 million net profit. Which is a PE of 5. Or better.
Yes, this year is a write off with the compo likely to mean zero profit - but that's already in the share price.
These could easily crawl back up to £7 a share in the next 18 months. They'd still be £10 less than their peak. There is also the possibility or a takeover too from someone (maybe Private Equity) wanting to get their hands on the £175 billion to manage and who would easily slash the overheads. So that £7 could arrive more quickly (a bid less than that wouldn't be acceptable to long term shareholders).
£4.60 to £7.00 in 18 months. A 50% gain.
Watch this space......???
They could but everyone is having the easiest time in years lifting clients out from SJP and SJP are having the most difficult time ever recruiting door to door salesmen with the contacts they once had so they have a big AUM pressure occurring. The share price is a live guess on whether SJP lose more or less AUM than currently being predicted as well as how bad the discounting on fees will end up being to keep clients and agents from leaving.
If you were late 40s, had a good book of business why would you consider taking it out from your employer and dropping it in to SJP for a decade of boosted income and a sale before retirement? You're not. The firm you'd be leaving can now easily retain the lions share of your client book and the deal is manifestly no longer a slam dunk run to retirement.
It'll turn a corner at some point but they also need to change their business model as their traditional client base is getting smaller and they need to revamp, maybe even rebrand to try and repeat with GenX what they achieved with the much larger Boomer base.
Personally, I don't even think they'll get the slightest whiff of Millennial wealth whatever they do.
The other slight issue facing SJP is the probate tap. It's been a trickle for twenty years but purely because of the spike life expectancy which has no run its course so mass probate flows are building and will keep building. And unlike previous probate environments where there were huge fee opportunities and the doubling of clients as your one client became their two children, this time around those children have already spent the money so won't be becoming clients.
If you were late 40s, had a good book of business why would you consider taking it out from your employer and dropping it in to SJP for a decade of boosted income and a sale before retirement? You're not. The firm you'd be leaving can now easily retain the lions share of your client book and the deal is manifestly no longer a slam dunk run to retirement.
It'll turn a corner at some point but they also need to change their business model as their traditional client base is getting smaller and they need to revamp, maybe even rebrand to try and repeat with GenX what they achieved with the much larger Boomer base.
Personally, I don't even think they'll get the slightest whiff of Millennial wealth whatever they do.
The other slight issue facing SJP is the probate tap. It's been a trickle for twenty years but purely because of the spike life expectancy which has no run its course so mass probate flows are building and will keep building. And unlike previous probate environments where there were huge fee opportunities and the doubling of clients as your one client became their two children, this time around those children have already spent the money so won't be becoming clients.
I know quite a few who are clients and I'm always scratching my head as to why.
I think the poster above hit the nail on the head with the target market. New money types, all of a sudden think they're financial wizzkids and like to chat about how theyre 'in' Tesla, Dogecoin, or whatever the latest fad is. After a few years when theyve lost their arses on these they steer a little more conservatively towards wealth managers because their boss's boss uses them. The Private Banking door remains firmly shut but IFAs like SJP are ready to welcome them with open arms and make them feel like they're part of the club.
Same reason people join private members clubs isn't it? As long as people wish to climb the social ladder there will be a place for them.
I think the poster above hit the nail on the head with the target market. New money types, all of a sudden think they're financial wizzkids and like to chat about how theyre 'in' Tesla, Dogecoin, or whatever the latest fad is. After a few years when theyve lost their arses on these they steer a little more conservatively towards wealth managers because their boss's boss uses them. The Private Banking door remains firmly shut but IFAs like SJP are ready to welcome them with open arms and make them feel like they're part of the club.
Same reason people join private members clubs isn't it? As long as people wish to climb the social ladder there will be a place for them.
CLK-GTR said:
They have loads of IFAs who go to them and take clients with them. Call them what you want.
If you are going to talk about them at least get the terminology right.If an IFA takes their clients with them then, those IFAs lose the “I”.
Not being IFAs is part of the problem!
CLK-GTR said:
craig1912 said:
They aren’t IFA’s!!
They have loads of IFAs who go to them and take clients with them. Call them what you want.If you walk through the door of an SJP advisor you aren't going to be walking out in a bunch of low cost HSBC or Vanguard trackers and one of the reasons for that is precisely because they aren't independent.
Would you rather have a crap adviser with access to the whole of market or a superb adviser restricted in some areas to a single provider ?
One will sell you all the wrong stuff from whichever provider has taken him out to lunch that week and the other will sell you all the right stuff but the products might not be the best available.
IFA is a bit of a joke. I worked for a while for an IFA who had a 'panel' of pre approved providers for each product area. Which was because it is simply impossible to understand the minutiae of every product from every provider to consider, and then discount, all but one.
One will sell you all the wrong stuff from whichever provider has taken him out to lunch that week and the other will sell you all the right stuff but the products might not be the best available.
IFA is a bit of a joke. I worked for a while for an IFA who had a 'panel' of pre approved providers for each product area. Which was because it is simply impossible to understand the minutiae of every product from every provider to consider, and then discount, all but one.
OddCat said:
Maybe as none of you are actually SJP clients, nor have had a bad experience with SJP, perhaps …
I was approached (cold-called) several times by SJP agents, and had them pushed by various introducers including umbrella companiesFrom all they told me and I could find out about SJP, my reaction included the words “not” and “bargepole”. Does that make me unqualified to express my view and warn off others?
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