What would you do with a £1million pension?

[Tit For Tat]

BanzaiMan said:

A few questions/observations (I am looking at moving some money so have an interest)

I understood that the majority of IFAs were still operating on a % based model, so don't see how that differs
I'd be very surprised if an actuary struggled - surely it can't be that difficult?
You sure the 5% is for all investments, I understood it was only unit trusts?
Does the IFA % figure include platform costs etc?
Initial costs are part of the picture, but what about ongoing costs (advice, platform, fund and DFM (or do IFAs tend to run the investment themselves?)?

Would be good to have a side by side comparison for total costs over (say) a 10 year period

Some IFAs will work on a % model, many don't, and will charge a fixed fee based on investment level tiers.

I was exaggerating slightly about the actuaries for comedic effect - see my post above. But the principle stands - their structure is fiendishly complex, and as someone else has already said, if you want proof of that, ask an SJP Partner to explain their charges. They will not be able to, because they don't understand them themselves.

The 5% does apply to unit trusts, pensions are closer to 6%. SJP funds do not use OEICs.

The IFA figure is the cost of intial advice. Platform and fund AMCs will normally be in addition. DFM is over and above, but not something that SJP offer.

Good luck on obtaining that comparison. You will not be able to.


If you are considering using SJP , you need to ask yourself why, and what they can give you over and above a decent IFA. SJP are still managed like an old boys network, they are not fit for purpose in the 21st century. IMHO.

[sidicks]

Tit For Tat said:

sidicks said:

What investment guarantee do they give?!!

They don't. As I suspect you already know

Indeed.

I just don't understand why people comment on specialist topics like this when they clearly don't understand what they are talking about!

Edited by sidicks on Saturday 8th July 19:38

[Tit For Tat]

sidicks said:

Indeed.

I just don't understand why people comment on specialist topics like this when they clearly don't understand what they are talking about!

Edited by sidicks on Saturday 8th July 19:38

Yeah, it's worrying to read the absolute crud some people post. I guess it's just the online equivalent of the bloke down the pub who knows it all.

[BanzaiMan]

Tit For Tat said:

BanzaiMan said:

A few questions/observations (I am looking at moving some money so have an interest)

I understood that the majority of IFAs were still operating on a % based model, so don't see how that differs
I'd be very surprised if an actuary struggled - surely it can't be that difficult?
You sure the 5% is for all investments, I understood it was only unit trusts?
Does the IFA % figure include platform costs etc?
Initial costs are part of the picture, but what about ongoing costs (advice, platform, fund and DFM (or do IFAs tend to run the investment themselves?)?

Would be good to have a side by side comparison for total costs over (say) a 10 year period

Some IFAs will work on a % model, many don't, and will charge a fixed fee based on investment level tiers.

I was exaggerating slightly about the actuaries for comedic effect - see my post above. But the principle stands - their structure is fiendishly complex, and as someone else has already said, if you want proof of that, ask an SJP Partner to explain their charges. They will not be able to, because they don't understand them themselves.

The 5% does apply to unit trusts, pensions are closer to 6%. SJP funds do not use OEICs.

The IFA figure is the cost of intial advice. Platform and fund AMCs will normally be in addition. DFM is over and above, but not something that SJP offer.

Good luck on obtaining that comparison. You will not be able to.


If you are considering using SJP , you need to ask yourself why, and what they can give you over and above a decent IFA. SJP are still managed like an old boys network, they are not fit for purpose in the 21st century. IMHO.

https://citywire.co.uk/new-model-adviser/news/restricted-advisers-set-higher-initial-charges-than-ifas-says-famr-report/a1029842?ref=new-model-adviser-most-popular-list

Doing a bit more digging would suggest that the an IFA charges an average of 2.81% (although to be fair no mention is made of case size). Add in platform setup costs and I would assume initial charge would be a tad over 3%. Regarding ongoing fees, average IFA charges 0.72%, and when you add platform costs (0.3%?) and typical active fund charge of 0.9%

http://citywire.co.uk/new-model-adviser/news/fca-p...

suggests an average IFA cost of over 2% over a 10 year period

Regarding SJP

https://www.moneymarketing.co.uk/issues/2-march-20...
https://www.moneymarketing.co.uk/does-sjp-have-a-f...


my understanding is that there is no initial charge for the pension, the 6% you referred to being an exit fee if you leave before 6 years are up.
If you were to invest in Woodford the all in cost is 1.67%, no idea how this fund compares to the rest of their offerings cost wise.

I can't see SJP vs IFA costs being much different, but maybe I've overlooked something

[Tit For Tat]

BanzaiMan said:

https://citywire.co.uk/new-model-adviser/news/rest...

Doing a bit more digging would suggest that the an IFA charges an average of 2.81% (although to be fair no mention is made of case size). Add in platform setup costs and I would assume initial charge would be a tad over 3%. Regarding ongoing fees, average IFA charges 0.72%, and when you add platform costs (0.3%?) and typical active fund charge of 0.9%

http://citywire.co.uk/new-model-adviser/news/fca-p...

suggests an average IFA cost of over 2% over a 10 year period

Regarding SJP

https://www.moneymarketing.co.uk/issues/2-march-20...
https://www.moneymarketing.co.uk/does-sjp-have-a-f...


my understanding is that there is no initial charge for the pension, the 6% you referred to being an exit fee if you leave before 6 years are up.
If you were to invest in Woodford the all in cost is 1.67%, no idea how this fund compares to the rest of their offerings cost wise.

I can't see SJP vs IFA costs being much different, but maybe I've overlooked something

That's because you are trying to compare apples to bananas. As the Money Marketing article you linked explains, anyone who tries to make a comparison between SJP fees and any other firm comes unstuck. I have already tried to explain this to you twice, I'm not sure what more evidence you need.

For example, you quote the SJP Woodford fund charges at 1.67%. That is extortionate. You can buy Woodford's own fund for example through HL, and it will cost you just 0.6% AMC + 0.25% platform fee.

You describe the 6% charge on pensions as an "exit fee". It sounds like you have fallen for the SJP spiel, this is how they train their partners to explain it. While there is a 6% declining exit fee, there is also an initial charge plus ongoing advice fee which equates to circa 6%. Don't be suckered!

The text below explains. Again. You seem determined to give your money to SJP- go ahead, please, it's your money ! It makes no difference to me. Good luck.


"HOW DOES SJP CHARGE?

As with most advisers, the charges depend on what you are investing in and your personal circumstances. You normally pay an initial fee to determine your needs and receive recommendations.

For pensions and investment bonds (a kind of long-term insurance policy that holds a number of selected funds), there is an initial charge of between 2.5% and 4% on the amount being invested. So, on a £200,000 fund, this could be up to £8,000.

You then pay the ongoing annual charge, which depends on the SJP funds you are invested in. Normally this is 1.5% to 2% (which includes the typical 0.5% a year paid to the adviser, as explained already).

There is also an exit penalty for pension and investment bond clients of 6% of the total amount invested if you decide to switch to another investment platform. This declines by one percentage point a year until there is no exit charge after six years.

For Isa and unit trust investors, there is an initial charge of “up to” 5%, SJP said. The annual ongoing charges again depend on the funds chosen. There is no exit penalty"

[BanzaiMan]

Tit For Tat said:

BanzaiMan said:

https://citywire.co.uk/new-model-adviser/news/rest...

Doing a bit more digging would suggest that the an IFA charges an average of 2.81% (although to be fair no mention is made of case size). Add in platform setup costs and I would assume initial charge would be a tad over 3%. Regarding ongoing fees, average IFA charges 0.72%, and when you add platform costs (0.3%?) and typical active fund charge of 0.9%

http://citywire.co.uk/new-model-adviser/news/fca-p...

suggests an average IFA cost of over 2% over a 10 year period

Regarding SJP

https://www.moneymarketing.co.uk/issues/2-march-20...
https://www.moneymarketing.co.uk/does-sjp-have-a-f...


my understanding is that there is no initial charge for the pension, the 6% you referred to being an exit fee if you leave before 6 years are up.
If you were to invest in Woodford the all in cost is 1.67%, no idea how this fund compares to the rest of their offerings cost wise.

I can't see SJP vs IFA costs being much different, but maybe I've overlooked something

That's because you are trying to compare apples to bananas. As the Money Marketing article you linked explains, anyone who tries to make a comparison between SJP fees and any other firm comes unstuck. I have already tried to explain this to you twice, I'm not sure what more evidence you need.

For example, you quote the SJP Woodford fund charges at 1.67%. That is extortionate. You can buy Woodford's own fund for example through HL, and it will cost you just 0.6% AMC + 0.25% platform fee.

You describe the 6% charge on pensions as an "exit fee". It sounds like you have fallen for the SJP spiel, this is how they train their partners to explain it. While there is a 6% declining exit fee, there is also an initial charge plus ongoing advice fee which equates to circa 6%. Don't be suckered!

The text below explains. Again. You seem determined to give your money to SJP- go ahead, please, it's your money ! It makes no difference to me. Good luck.


"HOW DOES SJP CHARGE?

As with most advisers, the charges depend on what you are investing in and your personal circumstances. You normally pay an initial fee to determine your needs and receive recommendations.

For pensions and investment bonds (a kind of long-term insurance policy that holds a number of selected funds), there is an initial charge of between 2.5% and 4% on the amount being invested. So, on a £200,000 fund, this could be up to £8,000.

You then pay the ongoing annual charge, which depends on the SJP funds you are invested in. Normally this is 1.5% to 2% (which includes the typical 0.5% a year paid to the adviser, as explained already).

There is also an exit penalty for pension and investment bond clients of 6% of the total amount invested if you decide to switch to another investment platform. This declines by one percentage point a year until there is no exit charge after six years.

For Isa and unit trust investors, there is an initial charge of “up to” 5%, SJP said. The annual ongoing charges again depend on the funds chosen. There is no exit penalty"

Thanks, agreed that we don't want to compare apples to bananas. Taking the HL example above, and adding the 0.72% average ongoing fee an IFA would charge takes us to 1.57%, 0.1% cheaper. Add in the additional 2% initial charge (5% vs 3%) and SJP works out at an extra 0.3% a year for unit trust investment. I'll do some more digging on the pension side

[JulianPH]

BanzaiMan said:

Thanks, agreed that we don't want to compare apples to bananas. Taking the HL example above, and adding the 0.72% average ongoing fee an IFA would charge takes us to 1.57%, 0.1% cheaper. Add in the additional 2% initial charge (5% vs 3%) and SJP works out at an extra 0.3% a year for unit trust investment. I'll do some more digging on the pension side

But that is what you are continuing to do. HL does not, for example, have any initial charge. Where did you get the 3% from...?

You can argue all day long about SJP not being any more expensive that other advisers, though this is difficult as it is virtually impossible to uncover what SJP's charges actually are. You might be right, you might not. We simply don't know.

However, to try an argue they are similar to HL's charges is foolish and very naive.

[BanzaiMan]

JulianPH said:

BanzaiMan said:

Thanks, agreed that we don't want to compare apples to bananas. Taking the HL example above, and adding the 0.72% average ongoing fee an IFA would charge takes us to 1.57%, 0.1% cheaper. Add in the additional 2% initial charge (5% vs 3%) and SJP works out at an extra 0.3% a year for unit trust investment. I'll do some more digging on the pension side

But that is what you are continuing to do. HL does not, for example, have any initial charge. Where did you get the 3% from...?

You can argue all day long about SJP not being any more expensive that other advisers, though this is difficult as it is virtually impossible to uncover what SJP's charges actually are. You might be right, you might not. We simply don't know.

However, to try an argue they are similar to HL's charges is foolish and very naive.

The 3% was for the IFA initial fee (actually 2.8%) - if we are comparing apples with apples investing through an IFA will incur platform and fund costs, so I used HL as an example. Maybe IFA can get cheaper platform/fund access than HL.

[BanzaiMan]

Tit For Tat said:

For example, you quote the SJP Woodford fund charges at 1.67%. That is extortionate. You can buy Woodford's own fund for example through HL, and it will cost you just 0.6% AMC + 0.25% platform fee.

Can I double check the 0.25% platform fee - I'm seeing 0.45% for £100k investment.

http://www.hl.co.uk/investment-services/fund-and-s...

[JulianPH]

BanzaiMan said:

The 3% was for the IFA initial fee (actually 2.8%) - if we are comparing apples with apples investing through an IFA will incur platform and fund costs, so I used HL as an example. Maybe IFA can get cheaper platform/fund access than HL.

But the problem is you are not comparing apples for apples because you don't know what SJP charges for its apples.

HL will tell you the cost of the apples it sells - and the cost of the bag you need to keep all your apples in (you are correct that their bag costs 0.45% in your example).

SJP give an indication as to the average cost of their apples, including (but not specifying) some of the additional costs, but hiding others (take this analogy as far as you like, from the bag to the cost of harvesting, transport, packaging, even the land and labour needed to grow the trees - you will find similar in financial services).

Unless you know the total of all these costs you will always be comparing apples with bananas.

I work in the industry (though not the advice side of it) and actually think the SJP model is very good. The only people who complain about it are other advisers and I believe there may be some sour grapes there. Most adviser fees are, though, IMHO far too expensive. SJP don't help in hiding their fees though. It does fuel the debate and whilst this might be unjust criticism, all SJP has to do to put the record straight is be transparent about their fees.

As they won't it does suggest that the other advisers have a very valid point.

Equally, are any advisers here happy to give a full breakdown of their costs? Initial and ongoing for their advice and all elements of charges for the platforms/investments/underlying costs/DFM/SIPP/etc?

[Tit For Tat]

BanzaiMan said:

Can I double check the 0.25% platform fee - I'm seeing 0.45% for £100k investment.

http://www.hl.co.uk/investment-services/fund-and-s...

Have a closer look.

I'm done with the free advice, I've tried my best to help you, but you seem determined to ignore it. Please just go invest with SJP!

[Tit For Tat]

JulianPH said:

But the problem is you are not comparing apples for apples because you don't know what SJP charges for its apples.

HL will tell you the cost of the apples it sells - and the cost of the bag you need to keep all your apples in (you are correct that their bag costs 0.45% in your example).

SJP give an indication as to the average cost of their apples, including (but not specifying) some of the additional costs, but hiding others (take this analogy as far as you like, from the bag to the cost of harvesting, transport, packaging, even the land and labour needed to grow the trees - you will find similar in financial services).

Unless you know the total of all these costs you will always be comparing apples with bananas.

I work in the industry (though not the advice side of it) and actually think the SJP model is very good. The only people who complain about it are other advisers and I believe there may be some sour grapes there. Most adviser fees are, though, IMHO far too expensive. SJP don't help in hiding their fees though. It does fuel the debate and whilst this might be unjust criticism, all SJP has to do to put the record straight is be transparent about their fees.

As they won't it does suggest that the other advisers have a very valid point.

Equally, are any advisers here happy to give a full breakdown of their costs? Initial and ongoing for their advice and all elements of charges for the platforms/investments/underlying costs/DFM/SIPP/etc?

He's not listening !

I'm also in the industry (as you may have gathered ),but I am not and never have been an IFA, I hold no torch for them and have no dog in this fight.

While I respect your opinion on the SJP model, as you acknowledge, their lack of transparency is a major issue, and there is far more than sour grapes to the dislike of SJP in within the industry.There are several reasons for this, based on various SJP practices which I will not go into.

Where I would agree with you is that the model is very for good - for SJP advisers. With a decent client bank of 200-250 people, they comfortably earn decent 6 figure salaries, some much more.Plus they get financial support for office costs, loans to get them started , overseas conventions etc.

[JulianPH]

Tit For Tat said:

BanzaiMan said:

Can I double check the 0.25% platform fee - I'm seeing 0.45% for £100k investment.

http://www.hl.co.uk/investment-services/fund-and-s...

Have a closer look.

I'm done with the free advice, I've tried my best to help you, but you seem determined to ignore it. Please just go invest with SJP!

Whilst I am in agreement with you on most points, I have had another look and it clearly states 0.45% for a £100k investment on that link. What am I missing (genuinely, not sarcastically)?

[Tit For Tat]

JulianPH said:

Whilst I am in agreement with you on most points, I have had another look and it clearly states 0.45% for a £100k investment on that link. What am I missing (genuinely, not sarcastically)?

As it's you asking

Their platform fee is notionally tiered , so .45% up to 250K and .25% over and above 250K. I was working on the basis that the thread was about a pot of £1 Mill, not £100K.

(I say notionally tiered, as they may be open to negotiation on that.But you didn't hear that from me )

[BanzaiMan]

Tit For Tat said:

BanzaiMan said:

Can I double check the 0.25% platform fee - I'm seeing 0.45% for £100k investment.

http://www.hl.co.uk/investment-services/fund-and-s...

Have a closer look.

I'm done with the free advice, I've tried my best to help you, but you seem determined to ignore it. Please just go invest with SJP!

I can't see what I'm ignoring. I'm trying to get an indication of IFA vs SJP costs. I'm not entirely clear why you bought up HL?!

[BanzaiMan]

Tit For Tat said:

Where I would agree with you is that the model is very for good - for SJP advisers. With a decent client bank of 200-250 people, they comfortably earn decent 6 figure salaries, some much more.Plus they get financial support for office costs, loans to get them started , overseas conventions etc.

Surely the typical IFA would be making near £100k at 72bps * 250 clients * £150-200k per client?

[Tit For Tat]

BanzaiMan said:

I can't see what I'm ignoring. I'm trying to get an indication of IFA vs SJP costs. I'm not entirely clear why you bought up HL?!

And as numerous people on here, plus independent articles linked have repeatedly tried to explain to you, that comparison is not possible. I brought up HL as they are another option for you, either on an advised, or a non advised basis.Again I do not and never have worked for HL.

My belief, which I have evidence through figures, is that SJP will charge you more, and will offer you less investment fund choices.

But it's your money, go ahead with SJP and enjoy your expensive brochures.

[Tit For Tat]

BanzaiMan said:

Surely the typical IFA would be making near £100k at 72bps * 250 clients * £150-200k per client?

Would it be fair to say you are a tad pedantic when it comes to numbers?

There is no typical IFA., particularly when it comes to earnings. Bear in mind though that many SJP partners are ex-IFAs. There are very few IFAs that are ex-SJP.

There is a reason for that.

[BanzaiMan]

Tit For Tat said:

BanzaiMan said:

I can't see what I'm ignoring. I'm trying to get an indication of IFA vs SJP costs. I'm not entirely clear why you bought up HL?!

And as numerous people on here, plus independent articles linked have repeatedly tried to explain to you, that comparison is not possible. I brought up HL as they are another option for you, either on an advised, or a non advised basis.Again I do not and never have worked for HL.

My belief, which I have evidence through figures, is that SJP will charge you more, and will offer you less investment fund choices.

But it's your money, go ahead with SJP and enjoy your expensive brochures.

Comparison is not possible yet you have evidence that SJP charge more which suggests that comparison must be possible??

[Tit For Tat]

BanzaiMan said:

Comparison is not possible yet you have evidence that SJP charge more which suggests that comparison must be possible??

I can make a work a day comparison, not because I am claiming to be clever, purely because of intimate knowledge of both models. I can say no more than that.

It is not possible (as pointed out by independent press articles previously linked) for any private investor to make an informed judgement.