Has anyone got compensation from St James’ Place?

[pauloroberto]

I invested a substantial sum of money with Saint James’s Place in EIS schemes. These were marketed as being safe investments since the return came through tax savings rather than through taking a risk. Several years down the line, the schemes have now lost most of their value. My financial advisor is very sympathetic but St James’s Place are merely offering to waive the fees on any future sums that I invest until those fees meet the amount of my losses.

This seems ridiculous. I have lost confidence in Jameses Place and so it is naive of them to expect to regain my trust by asking me to make further substantial investment with them.

My question is whether anybody has obtained actual compensation from St James’s Place following losses on EIS schemes or anything else?

Thanks

[Petrus1983]

Sadly I doubt this thread will last long.

[chucklebutty]

Made the mistake of meeting with them, hounded regularly ever since. I genuinely need advice but these guys are relentless and being slaughtered in the Sunday Times.

[Greshamst]

“The value of your investments may go down”

[mikeiow]

Got any solid evidence of how this was marketed as "safe"?

[Helicopter123]

pauloroberto said:

I invested a substantial sum of money with Saint James’s Place in EIS schemes. These were marketed as being safe investments since the return came through tax savings rather than through taking a risk. Several years down the line, the schemes have now lost most of their value. My financial advisor is very sympathetic but St James’s Place are merely offering to waive the fees on any future sums that I invest until those fees meet the amount of my losses.

This seems ridiculous. I have lost confidence in Jameses Place and so it is naive of them to expect to regain my trust by asking me to make further substantial investment with them.

My question is whether anybody has obtained actual compensation from St James’s Place following losses on EIS schemes or anything else?

Thanks

The document you need is your Suitability Letter. If you no longer have it, SJP will have a copy on file. If this describes the investment as being anything other than High Risk you may be able to obtain redress. I know that these schemes are always marketed as being High Risk today.

Remember, it won’t be a St. James’s Place EIS (they don’t provide these directly) but they will have advised you to invest into a third party scheme. It is that advice that you will be questioning. Was the scheme suitable for you and your risk profile? If it’s badged up as high risk, and you were happy to accept that level of risk, perhaps to get the tax relief, then you will have no claim based on the investment loss itself.

EIS via SJP is no different to investing via an IFA, bank or DFM. Same rules apply. Lots of these have failed over recent years. The only difference is the SJP advice guarantee - if the product was never suitable for you, perhaps because of your own risk profile, they will compensate you in full, no questions asked.

Remember as well, that you can claim further tax relief on your losses so all may not be lost. Add this additional loss relief to your upfront tax relief and remaining value and you may find you are not so far underwater?

Edited by Helicopter123 on Wednesday 26th February 21:43

[dingg]

I reckon the answer to your question is
NO.

I may be wrong but probably won't be

[Swern1]

Helicopter123 said:

pauloroberto said:

I invested a substantial sum of money with Saint James’s Place in EIS schemes. These were marketed as being safe investments since the return came through tax savings rather than through taking a risk. Several years down the line, the schemes have now lost most of their value. My financial advisor is very sympathetic but St James’s Place are merely offering to waive the fees on any future sums that I invest until those fees meet the amount of my losses.

This seems ridiculous. I have lost confidence in Jameses Place and so it is naive of them to expect to regain my trust by asking me to make further substantial investment with them.

My question is whether anybody has obtained actual compensation from St James’s Place following losses on EIS schemes or anything else?

Thanks

The document you need is your Suitability Letter. If you no longer have it, SJP will have a copy on file. If this describes the investment as being anything other than High Risk you may be able to obtain redress. I know that these schemes are always marketed as being High Risk today.

Remember, it won’t be a St. James’s Place EIS (they don’t provide these directly) but they will have advised you to invest into a third party scheme. It is that advice that you will be questioning. Was the scheme suitable for you and your risk profile? If it’s badged up as high risk, and you were happy to accept that level of risk, perhaps to get the tax relief, then you will have no claim based on the investment loss itself.

EIS via SJP is no different to investing via an IFA, bank or DFM. Same rules apply. Lots of these have failed over recent years. The only difference is the SJP advice guarantee - if the product was never suitable for you, perhaps because of your own risk profile, they will compensate you in full, no questions asked.

Remember as well, that you can claim further tax relief on your losses so all may not be lost. Add this additional loss relief to your upfront tax relief and remaining value and you may find you are not so far underwater?

Edited by Helicopter123 on Wednesday 26th February 21:43

That’s assuming they fold.
The scenario those selling EIS don’t tend to cover is. Company muddles along and is neither successful or fails, so no profit or additional tax relief

I looked at EIS last year and it’s gambling which can only be a high risk strategy.
Yes, tax relief reduces your exposure but doesn’t mitigate it.

How anyone can view them as anything other than high risk is beyond me

[Somebody]

pauloroberto said:

My question is whether anybody has obtained actual compensation from St James’s Place following losses on EIS schemes or anything else?

I received compensation from SJP after a Financial Ombudsman ruling relating to a pension pension back in the late 90's. All the people I know who dealt with SJP have now cut ties with them.

Edited by Somebody on Thursday 27th February 13:31

[CharlesElliott]

My mother and my sister have both received compensation after I eventually managed to persuade them that it was a really high cost service for generally poor value investments. Not for the type of issue you raise though.

[Enut]

I would imagine that many people have obtained redress from SJP if they have been marketing EIS investments as low risk.


Enterprise Investment Schemes, by definition, cannot be low risk as if so they wouldn't carry the tax benefits associated with them. You should only contemplate investing in EISs and similar schemes if you are an experienced investor, are prepared to except a high level of risk and can accept potentially complete capital loss.

As has been said if you have documentation proving that it was sold to you as a low risk investment then I see little chance of you not winning a compliant against them or, if they reject your complaint, then taking it to the Ombudsman and getting an Ombudsman's decision in your favour.

[anonymous-user]

The lesson is always the same - don't let the tail wag the dog.

If you wouldn't put your money in a particular investment without the tax break then you need to think very hard before investing with the tax break.

[Atomista]

It should have been pointed out to you that an EIS scheme is high risk. If it wasn’t you would have good grounds for compensation.

It may have been highlighted that you would have to lose more than your income tax saving for the investment to lose you money on a net basis. This should advice should not have contradicted point 1 that the investment is high risk - if it did you could have cause for complaint.

Generally speaking you should have had to have signed documentation saying you are aware of the risks and you should have a ‘capacity for loss’ that would include the whole of the investment.

[Jon39]

Not compensation, but they did give me a good lunch for two at a five star hotel.
Only went along, just to see what sales tactics they use.

It is of course a follow up to Hambro, then Allied Dunbar. All very successful businesses, started by the same person and using the same model.

[Simpo Two]

Jon39 said:

then Allied Dunbar...

Known as 'Applied Crowbar' in the trade I believe. One from the wild west days of the 1980s when IFAs would state in writing that your endowment policy would pay off your mortgage and give a healthy profit on top. I still have the letter!

[Helicopter123]

Jon39 said:

Not compensation, but they did give me a good lunch for two at a five star hotel.
Only went along, just to see what sales tactics they use.

It is of course a follow up to Hambro, then Allied Dunbar. All very successful businesses, started by the same person and using the same model.

Partly true, in that Sir Mark Weinberg was involved with both.

Allied Dunbar was bought out by Zurich Financial Services in the late 1990's and evolved into Openwork, a business still on the go today. No direct link between Allied Dunbar and SJP although a number of former Allied Dunbar people may have 'jumped ship' to SJP over the years. It's likely that anyone from the original Allied Dunbar business now long retired.

It's quite remarkable just how far the financial services industry has been transformed by regulation over the past 25 years, mostly, but not entirely, for the better. Nothing wrong with selling people products that they need (life insurance, pensions etc) and I worry that many are now without cover or saving too little following the death of the old school direct sales force.

[Langleyuser]

Any successful examples of EIS funds maturing and actually paying out a return ? Or are they largely loss making ?

[Cheib]

Langleyuser said:

Any successful examples of EIS funds maturing and actually paying out a return ? Or are they largely loss making ?

Anything where they invest in “qualifying assets” and then seek to give you a return because of the tax breaks isn’t really EIS....it’s a tax arb dressed up as an investment. Trouble is the absolute best case with these schemes was you’d get back what they predicted but it never normally happens like that.

Invest in an EIS qualifying company because you like the fundamental values of the business not because of the tax breaks. They’re a bonus.

The real issue with EIS Funds is the people managing them....if you’re any good at being a fund manager in that sector you’d be managing a fund without the constraints of EIS where the returns would be more lucrative and you as the fund manager would get paid a lot more. The quality of the fund managers just wont be very good.

[Langleyuser]

Thanks.

EIS definitions are for small emerging companies and hence high risk. I understand tax benefit is a sweetener to dampen the impact of the high risk. Hence was checking if any fund/manager had figured out a consistent way of returning positive(good would be a stretch I guess ) returns. But so far haven’t come across any.

I think the problem is like finding needles in a haystack. There are so many small companies and every fund will find a dozen to invest in. It’s too expensive to scan the market and find the potential gems and it’s too time consuming for the companies also to keep courting investors. Both sides work to a timeline and make decisions within the timeline. It appears to be a tick box exercise and then hoping for the best

[Helicopter123]

Langleyuser said:

Thanks.

EIS definitions are for small emerging companies and hence high risk. I understand tax benefit is a sweetener to dampen the impact of the high risk. Hence was checking if any fund/manager had figured out a consistent way of returning positive(good would be a stretch I guess ) returns. But so far haven’t come across any.

I think the problem is like finding needles in a haystack. There are so many small companies and every fund will find a dozen to invest in. It’s too expensive to scan the market and find the potential gems and it’s too time consuming for the companies also to keep courting investors. Both sides work to a timeline and make decisions within the timeline. It appears to be a tick box exercise and then hoping for the best

Best approach is to focus on the providers with a decent process, and a better track record, although none will be flawless and this won't guarantee success. Split your investment over at least 3 schemes. As you are then effectively 'locked in', then yes, you just need to "hope for the best" after investing.