St. James' Place - a review…
Discussion
Alickadoo said:
TL:DR
Warren Buffett had a bet that a S&P500 index tracker would, over 10 years, beat the financial advisers advice.
It seems he has won.
https://tinyurl.com/4f4b42pm
The link you provide talks about beating hedge funds, which matches my recollection of the bet.Warren Buffett had a bet that a S&P500 index tracker would, over 10 years, beat the financial advisers advice.
It seems he has won.
https://tinyurl.com/4f4b42pm
IFAs and Hedge Funds are completely different beasts.
Caddyshack said:
They can still give very good advice though, advice can be about forecasting cash flow, understanding tax, best product wrappers, duration etc…it isn’t all about flogging a product.
Yup and crucially stop bored pensioners from punting away their wife's pension on the stock market. One of the most invaluable services that a good IFA offers is the derisking of retired bloke's horrendous tendency towards thinking they're a financial genius and opening an HL account specifically to churn their account using the buy high and sell low method of achieving maximum drawdown through ex only comms and poor performance.
Along side excellent tax guidance, general planning and support where many people make their biggest return via a good IFA is that the IFA has control of the buy/sell buttons and doesn't care about losing all the money trying to chase alpha that's at the end of a rainbow.
One of the cool things if you're selling your own product is that while the agent can't churn the client account you can still churn inside the product and no one looking in can see.
okgo said:
you’re the only other vocal defender I’ve seen of them on this forum, but also a customer if memory serves. Ask yourselves this, if they’re so great, why has he only got 20% of his money in there?
.
Surely you understand that ?
xeny said:
Alickadoo said:
TL:DR
Warren Buffett had a bet that a S&P500 index tracker would, over 10 years, beat the financial advisers advice.
It seems he has won.
https://tinyurl.com/4f4b42pm
The link you provide talks about beating hedge funds, which matches my recollection of the bet.Warren Buffett had a bet that a S&P500 index tracker would, over 10 years, beat the financial advisers advice.
It seems he has won.
https://tinyurl.com/4f4b42pm
IFAs and Hedge Funds are completely different beasts.
The latter bit is something that almost everyone forgets when seeking to compare IFA performance to say a lone index. An absolutely pivotal role of an IFA is to dial out risk. Sure, you could stick all your pension into a single index and take a gamble not just on it being one of the few indices of thousands that out performs but that it doesn't happen to s
t itself at the exact point that you need your pension the most. In fact, I would posit that you can't ever compare something like the spoos to an IFA portfolio as there is zero correlation. No IFA on the planet would just sling an entire portfolio into a single overseas index. It's not a scenario that would ever arise and so there is not a single plausible way to benchmark an IFA portfolio against the spoos. It just can't be done.
A hedge fund? I think you can. I think you can also benchmark something like Fundsmith against an appropriate single index but there's no logic, means or practice where you can do so with an IFA portfolio.
The IFA portfolio is hedging risk at a cost not reflected or remotely comparable to a single index. It's weighting its constituents based on the client's requirements which won't correlate at all to any single index.
In essence what you have is a lemon and an orange. They look sort of the same, the kind of do the same sort of job but in reality they are not remotely the same and are used for completely different objectives.
DonkeyApple said:
Charging above average can sometimes work as certain consumers are convinced more is better and others will willingly pay higher sums so long as everyone else knows that firm is renowned for charging a premium. Call it the M&S effect.
I would have raised my eyebrows at this if I hadn’t read this the other day…OddCat said:
Yes, I could move it to a cheaper drawdown contract but I simply can't be bothered. The fees are just over £2k per annum. Maybe I could get that down to £1k per annum (0.75%). Maybe that would all go horribly wrong. Who knows.
Caddyshack said:
That isn’t what “independent “ advice means though in financial advice. It is a term that comes from polarisation rules from about 1990, you were or are either a tied agent advising on one companies products, multi tied from a panel (that’s more recent) or independent.
I understand your explanation and independent could mean that in most other arenas but not for IFA.
They can still give very good advice though, advice can be about forecasting cash flow, understanding tax, best product wrappers, duration etc…it isn’t all about flogging a product.
Indeed. "Independent" in the context of the term IFA has a narrow meaning that doesn't add up to anything like "independent advice" in a general sense.I understand your explanation and independent could mean that in most other arenas but not for IFA.
They can still give very good advice though, advice can be about forecasting cash flow, understanding tax, best product wrappers, duration etc…it isn’t all about flogging a product.
IFAs can indeed give very good advice, and, based on their individual ethical standards, that includes choosing to give advice against their own immediate interest ... but they shouldn't be out in that sort of ethical dilemma in the first place.
I'm not blaming IFAs for being in this position. Punters aren't prepared to pay for advice up front, but they are prepared to pay "too much" later in the investment process that retrospectively covers the cost of advice. This failure to properly recognise the value of advice even though you end up paying for it anyway is irrational and problematic. It actively encourages punters to mis-value the steps in the process, leaving them open to being fleeced over the long term. And crucially it means the professional advisors aren't motivated to give proper independent advice.
You can't expect individual IFAs to be able to change the system. It needs regulation to impose rules on the industry. We need to set the rules of the game to encourage the behaviour we want.
funinhounslow said:
DonkeyApple said:
Charging above average can sometimes work as certain consumers are convinced more is better and others will willingly pay higher sums so long as everyone else knows that firm is renowned for charging a premium. Call it the M&S effect.
I would have raised my eyebrows at this if I hadn’t read this the other day…OddCat said:
Yes, I could move it to a cheaper drawdown contract but I simply can't be bothered. The fees are just over £2k per annum. Maybe I could get that down to £1k per annum (0.75%). Maybe that would all go horribly wrong. Who knows.
GT3Manthey said:
You'd be a fool to put 100% of your money with one outfit.
Surely you understand that ?
I think it might also depend on the outfit and what composition the money takes.Surely you understand that ?
Putting 100% of your investable assets with one entity you found off the web into one Fund might be brave though.
It also depends on how much actual quantum is involved.
Many seem comfortable with recommending one tracker Fund for everything but without knowing actual numbers ( and this is a internet forum ) you never know whether this is for £10k or £10m.
steve_n said:
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...
I had a Vauxhall once - Frontera Estate LWB - basically an Isuzu Truck in a frock - company car for 3 years which with young children and dogs was a great car which other than the glass top hatch sometimes not closing didn't put a foot wrong.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...
With SJP the quality or otherwise of the Advisor ( sorry Partner ) seems to dictate your experience though.
Ken_Code said:
Why? I’ve 100% of my stock investments with Vanguard.
Vanguard is a different kettle of fish. Same goes for the Blackrocks, Capital Groups of the world. They've more money than most countries.A lot of these soundbites are outdated. They come from a time before index funds when it was sensible advice not to put all your eggs in one stock or even one market. Much the same plight facing SJP. The advancement of well diversified, cheap financial products has rendered them obsolete.
Gassing Station | Finance | Top of Page | What's New | My Stuff