St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
A tad worrying as I’ve just invested with St James’s Place. I’ve forwarded this link to my Financial Advisor or as they seem to call themselves now Wealth Advisors. I will let you know what he says.
SJP really should be investigated by the FCA. I have no idea how they get round their upfront & exit charges.
Absolutely criminal.
You mean the FCA that regulates them more than any other Financial Advice provider in the country? You mean the SJP that is the largest collective of qualified advisers / chartered planners in the country.
Look, the EWC aspect should have gone long ago, I'll agree with you on that. However, now that the charging will be more easily comparable how are you going to explain to your clients that after all these years of telling clients how expensive SJP are you actually charge more than the average SJP client pays? The IFA community has done a good job of propagating myths around SJP and their charges. I thoroughly enjoy seeing IFA's squirm when I challenge potential clients to ask them to set out ALL of their charges in one place. It's time that IFA's started to face the scrutiny we did, the problem is that a high proportion of you wouldn't face up to that scrutiny.
I'd happily put my charges up against yours....oops, I mean SJP's.
OK cool, let's do it;
Initial Charges
We charge a maximum of 3%, average looks like it would be around the 2% mark for my business.
Ongoing Charges:
Depends on portfolio, but looking at the last couple of new clients they have been 1.62% - 1.67% PA
0.5% of this is currently Ongoing Advice Fee (My bit) and therefore can be turned off.
Re Pensions I suspect we will do a lot of new business at 1-2% initial charge (Depending on size) and I believe the ongoing will be a tad higher, we will soon see.
We don't charge any additional fees whatsoever.
I love the arrogance of the "sorry, SJP's". You do all of your own investment work do you? No external managers / fund houses doing the work for you I hope? Otherwise, that's a little hypocritical don't you think?
Your turn.
Actually mine are rather similar, but then I'm whole of market rather than restricted, which is the real advantage over SJP. Its not the fund "picking" as I agree, the FCA don't wont FA's to be picking funds and would prefer them to be in a "managed" portfolio that is aligned to their Attitude to Risk. The company I work for (Quilter) run their own Platform and managed Portfolios, but I can go outside of both and recommend any Platform, Product or Fund. I have clients with Fidelity, Aegon, Scottish Widows, Royal London, Standard life, Prudential, LV, Aviva.........
As for charges - like you my initial charge starts at 3% but is usually 2.5% or even lower. For CL's I usually do a special deal if I am transferring funds from one product/platform/provider to another. My ongoing charge, again, is like yours at 0.5% but I have clients paying 0.3% or even 0.25% (but they have over £1m under management). The big difference is the Product Charges. I believe "your" 3% comes out of the 5% (for ISA's) or 6% (Pensions) - so that then leaves 2%-3% to cover other "charges". Most clients I have are paying a Platform/Provider charge of less than 0.5%pa - Quilter's Platform charge is around 0.2%-0.25% depending on the amount you have invested. Then funds charges are typically around 0.8%pa. Quilter have a range of managed portfolios that come in around 0.65%. If I am selecting individual funds I try to keep the whole charging structure (Product/funds/adviser) to below 1.5%pa. Royal London's Drawdown Pension has a capped 1% charge, with that coming down to 0.40% if you have over £250k invested. With that you can have a number of their Governed Portfolios at no extra cost - so you could get a Drawdown Pension paying just 0.4%pa for the Product AND the funds -can you do that for your clients ? No. Because you can only "advise" on SJP products. And that's the big difference. Its not just the charges but the range of Providers and Funds that a Whole of Market adviser can offer.
You've just proven that you often try and hammer SJP for charges, when you don't understand the charges. That's highly unprofessional.
I've just set out what my last 2 investment clients are actually paying IN TOTAL. I.e. 3% Initial / 1.62% and 1.67 PA Ongoing in Total.
I.e. All Platform, Advice and Fund Manger charges included.
What I'd hoped for would that you would set out clearly an example of what your charges are. A lot of waffle, but very little data.
It's a separate discussion regarding what you actually get for what you pay, but you are just yet another IFA spouting nonsense about how expensive SJP are without bothering to actually find out what the charges are.
I don't simply throw all my clients into the core products, if I want to access the 13,000 or whatever there are funds in the UK I use our discretionary arm. Again, my point of challenge is the various comments about charges. None of which are ever backed up with data.
I really don't want to get into a tit-for-tat discussions on the whys & wherefores of Restricted (in this case SJP) and Whole of Market. This thread was for a specific reason & we (well, you me & @Rob7Lee) have taken it off topic.
All I can say with my experience of SJP is that I have known 3 clients associated with them. 2 of them inherited funds from a deceased parent and on both occasions, when examining the paperwork, the client's couldn't or did not want to to cash in the investments because of the exit fees in place.
I think we should leave the final word with SJP themselves. Having seen their share price almost halve this year they announced last month that their charging structure is going to change. Not overnight, but over the next 18 months. They admitted in the press release that people had found it hard to compare their charges with other adviser firms/providers and will be, in future, splitting the charges down to the (now) normal 3 components Platform/Provider charges, fund charges and adviser fees. So in 2025 we can have another discussion once we know how these match up with the competition.
Yep and the exit charge approach should have gone a long time ago, no wonder it caused resentment with IFA's.
All i can say from experience is that the average IFA is opaque with their charging structure and, to be frank, not very good.
However, that resentment doesn't justify the constant lies by the IFA community about SJP. I just set out very clearly what I charge (i.e. the total the client pays for the product, advice and fund managers) on investments and you somehow sought to re-imagine that by throwing in a couple of extra %.
Unfortunately that leads to people like Rob sl*gging SJP off left right and centre because he has a wildly incorrect understanding of the charges.
Give it 12 months it will be far, far more difficult for you guys to hide behind those lies. We already know the changes, for my business it will basically be the same on the pension side as the investment side i outlined earlier, perhaps 0.1 - 0.2% higher ongoing.
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
If the charges are unclear then it is only to the detriment of SJP in that one would be forgiven for thinking the charges are far higher than they actually are. This I would argue is better than the opposite approach that most IFA's deploy whereby, once pressed on total charges, miraculously the figure is higher than SJP and higher than initially quoted. Most IFA's are in no moral position to criticise SJP for their charges or quality of advice, yet most do.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Madness, what you are saying is you defer those charges for 6 years, leave anytime before then and they (or an element of them) apply.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Madness, what you are saying is you defer those charges for 6 years, leave anytime before then and they (or an element of them) apply.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
I’ll say yes because it’s close enough, but that will be gone in 12 months and it will be in line with the investment side.
Well, we can partially agree on that. In a worst-case scenario then yes.
But, in reality we bespoke the charges based on the size of the client in the same way all FA’s do.
I don’t blame you for the misunderstanding when people like Golfaddick spend their career misrepresenting us. Anyway, at least we partially cleared that up. Enjoy your weekend.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Madness, what you are saying is you defer those charges for 6 years, leave anytime before then and they (or an element of them) apply.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
I’ll say yes because it’s close enough, but that will be gone in 12 months and it will be in line with the investment side.
Well, we can partially agree on that. In a worst-case scenario then yes.
But, in reality we bespoke the charges based on the size of the client in the same way all FA’s do.
I don’t blame you for the misunderstanding when people like Golfaddick spend their career misrepresenting us. Anyway, at least we partially cleared that up. Enjoy your weekend.
I understand you discount, but in general unless I invested I can only go by the advertised rates.
IMHO It's nothing to do with GolfAddick but everything to do with your own website advertising, no where does it state those initial fee's are deferred for instance.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Madness, what you are saying is you defer those charges for 6 years, leave anytime before then and they (or an element of them) apply.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
I’ll say yes because it’s close enough, but that will be gone in 12 months and it will be in line with the investment side.
Well, we can partially agree on that. In a worst-case scenario then yes.
But, in reality we bespoke the charges based on the size of the client in the same way all FA’s do.
I don’t blame you for the misunderstanding when people like Golfaddick spend their career misrepresenting us. Anyway, at least we partially cleared that up. Enjoy your weekend.
I understand you discount, but in general unless I invested I can only go by the advertised rates.
IMHO It's nothing to do with GolfAddick but everything to do with your own website advertising, no where does it state those initial fee's are deferred for instance.
The confusion is because they have to set out what they charge, then how they charge it. It does cover because it explains the effect of the charges. However, I agree that this could be explicitly stated to avoid confusion. That said, they then provide a very clear document where you can see everything you pay. That is clearer than anything i saw on Quilters website for example. The whole industry is full of bullsh*t because the regulator are not fit for purpose.
I apologise for getting a**y but it was a timing thing haha.
Either way, SJP aren't for everyone, but they do just the job for a lot of people.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
Haha so because you don't understand my question, that means i dont know the fee structure? Let's try again.
So, your understanding of what you have read on the SJP website lead you to believe that (Based on the maximum permissable charges to keep it simple) a client would pay 4.5% at the front end AND an exit penalty?
So lets for arguments sake say a client invested £100,000 into an SJP Pension. The way you've understood it is that £4,500 would be deducted at the front end and an exit penalty would apply? I just need to know how you've understood it, as it would explain a lot.
You asked "So SJP charge 4.5% Initial on Pensions and an Exit Penalty?" - I've quoted from your website!
It's all clearly laid out here in case you've not seen it.
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Madness, what you are saying is you defer those charges for 6 years, leave anytime before then and they (or an element of them) apply.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
I’ll say yes because it’s close enough, but that will be gone in 12 months and it will be in line with the investment side.
Well, we can partially agree on that. In a worst-case scenario then yes.
But, in reality we bespoke the charges based on the size of the client in the same way all FA’s do.
I don’t blame you for the misunderstanding when people like Golfaddick spend their career misrepresenting us. Anyway, at least we partially cleared that up. Enjoy your weekend.
I understand you discount, but in general unless I invested I can only go by the advertised rates.
IMHO It's nothing to do with GolfAddick but everything to do with your own website advertising, no where does it state those initial fee's are deferred for instance.
The confusion is because they have to set out what they charge, then how they charge it. It does cover because it explains the effect of the charges. However, I agree that this could be explicitly stated to avoid confusion. That said, they then provide a very clear document where you can see everything you pay. That is clearer than anything i saw on Quilters website for example. The whole industry is full of bullsh*t because the regulator are not fit for purpose.
I apologise for getting a**y but it was a timing thing haha.
Either way, SJP aren't for everyone, but they do just the job for a lot of people.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
If that's the case then you need to get onto your marketing people straight away as that charging leaflet doesn't say that at all.
It quite distinctly describes 3 different charges -
Adviser Product Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
If that's the case then you need to get onto your marketing people straight away as that charging leaflet doesn't say that at all.
It quite distinctly describes 3 different charges -
Adviser Product Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments". < they are referring to the EMC’s.
Let’s be honest, the reality is its basically a Pre-RDR product in a post-RDR world, hence the way it is set out.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
If that's the case then you need to get onto your marketing people straight away as that charging leaflet doesn't say that at all.
It quite distinctly describes 3 different charges -
Adviser Product Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments". < they are referring to the EMC’s.
Let’s be honest, the reality is its basically a Pre-RDR product in a post-RDR world, hence the way it is set out.
Seeing as the whole point of RDR was to make things clear & transparent for consumers then SJP should have done what virtually all other providers did which was to ditch their old products & start again. Zurich had a brand name called Sterling, which offered iSA's and investment Bonds. They shut these down after RDR and brought in a while new suite of products & launched the Zurich platform. Big Insurers like The Prudential stopped their with-profit Bonds as the charges were opaque.
Also, I'm.not sure what you refer to as EMC's as the literature is very clear. No way is the ongoing adviser charge part of the 1.5% AMC - both you & I know how ongoing adviser charges work & they are never incorporated into an AMC - especially not one that is very clearly shown on a charges document. Because, as you yourself pointed out, ongoing adviser charges can be reduced by the advisor should they want to - and the AMC in that document is fixed - certainly for the first 10 years.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
If that's the case then you need to get onto your marketing people straight away as that charging leaflet doesn't say that at all.
It quite distinctly describes 3 different charges -
Adviser Product Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments". < they are referring to the EMC’s.
Let’s be honest, the reality is its basically a Pre-RDR product in a post-RDR world, hence the way it is set out.
Seeing as the whole point of RDR was to make things clear & transparent for consumers then SJP should have done what virtually all other providers did which was to ditch their old products & start again. Zurich had a brand name called Sterling, which offered iSA's and investment Bonds. They shut these down after RDR and brought in a while new suite of products & launched the Zurich platform. Big Insurers like The Prudential stopped their with-profit Bonds as the charges were opaque.
Also, I'm.not sure what you refer to as EMC's as the literature is very clear. No way is the ongoing adviser charge part of the 1.5% AMC - both you & I know how ongoing adviser charges work & they are never incorporated into an AMC - especially not one that is very clearly shown on a charges document. Because, as you yourself pointed out, ongoing adviser charges can be reduced by the advisor should they want to - and the AMC in that document is fixed - certainly for the first 10 years.
We can agree on that.
Pretty bored at this point but it says “ The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge”.
I can guarantee you that the AMC includes my 0.5%. If you look at the Pension charges summary (which shows ALL charges) you’ll note the total charges.
Bring on the changes because it won’t leave any room for doubt. Anyway, let’s get back to the riveting football 😆.
St James place ARE NOT independent financial advisors. They are tied to St James Place. Believe the official term is restricted advice.
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
My IFA is SJP and always liked the guy and given me good advice and helped with life insurance/critical illlness etc but he’s now being quite pushy about me investing in a VCT and I’m quite sceptical, looks very risky
Any IFA’s on here?
Your advisor is not Independent (The I in IFA).
I got my first mortgage through SJP and it was a Natwest product that they "sold" me.
Yes they do mortgage advice but aren't a lender themselves. No idea if they access whole of market.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
Here is an example Rob, you just don’t see people spreading this level of information about other companies.
What is wrong with any of that? Are the fee's wrong, is there not an exit fee? Are SJP a mortgage lender?
So SJP charge 4.5% Initial on Pensions and a Exit Penalty?
From SJP website:
Advice charges
We charge for our initial advice and for our ongoing advice. 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.
Product charges
There will be an initial product charge of 1.5% of your investment. There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment. After 10 years, the annual product management charge will reduce from 1% to 0.85%.
So yes, according to your website the initial charge on Pensions is a fee of 4.5% (you could argue 6% if you add in the Product Charge) and whilst you may not call it an 'exit penalty' there is a 1% fee if you encash within the first 6 years, that's an exit fee however you dress it up.
As Jeff would say, unbelievable......... is it any wonder SJP get bad press when their own advisors don't know their advertised fee structure.
EDIT, so I give over my £1m pension to SJP which overnight becomes £940k due to the charges quoted, if I then smell the coffee and want to move it out to another provider you send me £930k. Bargain!
hahahahaha wow. OK now we understand why you don't get why anyone would use SJP. It's because you've misunderstood the charging structure.
In fairness, I will accept that it could be clearer and from 2025 it will be expressed the same way as the ISA / Investment side. (Even with that, people like golfaddick will try and misrepresent it)
If you had £1,000,000 pension transferred to SJP (and again lets assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000. If you were to leave during the 6 year period, then yes lets call a spade a spade an exit penalty would apply as follows;
Year 1: 6% Year 2: 5% Year 3: 4% Year 4: 3% Year 5: 2% Year 6: 1%
Thereafter 0%.
Therefore, people like the original poster who stayed for the first 6 years ended up paying no initial charges whatsoever.
Again, this will be gone by the end of 2024 (agree it should have been sooner) but you have clearly shown that you yourself are a mouthpiece of misinformation about a company it seems you've never even sat down with and considered their offering.
You are now quoting an exit charge after challenging me that there wasn't one! None of that is what your website says.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
So basically SJP's charges as stated are untrue and totally incorrect and misleading. (I am a retired financial adviser).
no...basically Rob couldn't be bothered to read the whole website and trotted out a wildly inaccurate example which no doubt you were proud of as a retire FA.
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
Rather than keep quoting the link, why don't you try reading it and using the scroll function on your mouse?
Having clicked on the link could you clarify the following :
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
No, AMC includes Adviser Charges.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end - c1.9% Total Ongoing (Includes administration, product and Adviser) - 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
If that's the case then you need to get onto your marketing people straight away as that charging leaflet doesn't say that at all.
It quite distinctly describes 3 different charges -
Adviser Product Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments". < they are referring to the EMC’s.
Let’s be honest, the reality is its basically a Pre-RDR product in a post-RDR world, hence the way it is set out.
Seeing as the whole point of RDR was to make things clear & transparent for consumers then SJP should have done what virtually all other providers did which was to ditch their old products & start again. Zurich had a brand name called Sterling, which offered iSA's and investment Bonds. They shut these down after RDR and brought in a while new suite of products & launched the Zurich platform. Big Insurers like The Prudential stopped their with-profit Bonds as the charges were opaque.
Also, I'm.not sure what you refer to as EMC's as the literature is very clear. No way is the ongoing adviser charge part of the 1.5% AMC - both you & I know how ongoing adviser charges work & they are never incorporated into an AMC - especially not one that is very clearly shown on a charges document. Because, as you yourself pointed out, ongoing adviser charges can be reduced by the advisor should they want to - and the AMC in that document is fixed - certainly for the first 10 years.
We can agree on that.
Pretty bored at this point but it says “ The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge”.
I can guarantee you that the AMC includes my 0.5%. If you look at the Pension charges summary (which shows ALL charges) you’ll note the total charges.
Bring on the changes because it won’t leave any room for doubt. Anyway, let’s get back to the riveting football 😆.
I agree. Let draw a line in the sand & concentrate on football.
Those two things combined make the concept of paying for professional investment advice more likely than not to be an expensive mistake.
Anyway, here's a question for amateurs and professionals alike. Are you actually likely to be better off putting your retirement savings in a SIPP (taking the upfront tax relief but paying tax on your income in your dotage) or instead drip-feeding your pot of money into an ISA (getting any capital gains and future income entirely tax-free when the golden slippers of retirement slide on to your feet)? I am assuming your pot of money is not big enough to do both in any meaningful way. In particular I mention this because of the life-time pension cap imposed by this parsimonious and sneaky Government.
Now back to fees. The concept of paying a very large up-front fee as a percentage of your investment pot is an anathema to me. Surely with all other circumstances similar, attitude to risk, etc, etc, the advice should be broadly the same and cost the same whether the pot size is £250k or £1mn? Anyone who pays an upfront fee of the levels talked about here may want to reconsider their options. Then there's the question of whether you want on-going annual advice at all? What will it achieve for you? Would you be better off just paying an hourly rate for your up-front advice and then keeping a weather eye on your investments' performance from time to time? Because please don't be fooled into thinking that your friendly investment adviser will be doing any more. You'll get an annual health check but that would be about it!
Well then how about instead paying a financial adviser say, £350 per hour (that's top-level by the way, you could easily get away with paying £150) for the initial fact-find and recommendation and that's it? You can always go back for some ad hoc input if you really wish.
Now, we all know, don't we, that past performance is no guarantee of future results. (Just google Neil Woodford if you want a glaring example of that.) But, in my view there is an exception to that and that is with dog funds. Once a dog probably always a dog.) I won't mention names but if you are interested do a search on dog funds.
Those two things combined make the concept of paying for professional investment advice more likely than not to be an expensive mistake.
Anyway, here's a question for amateurs and professionals alike. Are you actually likely to be better off putting your retirement savings in a SIPP (taking the upfront tax relief but paying tax on your income in your dotage) or instead drip-feeding your pot of money into an ISA (getting any capital gains and future income entirely tax-free when the golden slippers of retirement slide on to your feet)? I am assuming your pot of money is not big enough to do both in any meaningful way. In particular I mention this because of the life-time pension cap imposed by this parsimonious and sneaky Government.
Now back to fees. The concept of paying a very large up-front fee as a percentage of your investment pot is an anathema to me. Surely with all other circumstances similar, attitude to risk, etc, etc, the advice should be broadly the same and cost the same whether the pot size is £250k or £1mn? Anyone who pays an upfront fee of the levels talked about here may want to reconsider their options. Then there's the question of whether you want on-going annual advice at all? What will it achieve for you? Would you be better off just paying an hourly rate for your up-front advice and then keeping a weather eye on your investments' performance from time to time? Because please don't be fooled into thinking that your friendly investment adviser will be doing any more. You'll get an annual health check but that would be about it!
Well then how about instead paying a financial adviser say, £350 per hour (that's top-level by the way, you could easily get away with paying £150) for the initial fact-find and recommendation and that's it? You can always go back for some ad hoc input if you really wish.
Now, we all know, don't we, that past performance is no guarantee of future results. (Just google Neil Woodford if you want a glaring example of that.) But, in my view there is an exception to that and that is with dog funds. Once a dog probably always a dog.) I won't mention names but if you are interested do a search on dog funds.
Sorry that was long-winded but I hope those that stuck with it to the end found some food for thought.
I agree on the first part to a degree, in that private investors can beat the pro's, but that won't always be the case and is down to individual knowledge (and sometimes a bit of luck). Personally I'm averaging double digit returns each year for the past 3 with very low fee's (fund and platform etc).
Personally as I head towards retirement I switched my largest SIPP to Vanguard. In part that was fee driven, but also de-risking, their fee's (or lack of!) save me a lot and I was happy with their investment choices. I was previously with Fidelity (and have kept the SIPP and some investments them), and whilst I was very happy with Fidelity I'm saving quite a bit in fee's. I've also over time switched to more ETF's where the fee's/charges are very low. My largest holding is in Vanguards S&P500 ETF, up 19.6% since I entered in June 2022 via them, that has an ongoing charge of 0.07%.
The debate on ISA's/SIPP's is down to personal (tax) circumstances as much as anything, both your tax rate when paying in but also likely tax rate on withdrawals come retirement.
I'm a higher rate tax payer and having trimmed back my work I can now pay some into pension again and effectively get 62% tax relief, so in that instance it's a no brainer rather than ISA (I do have ISA's also). Whereas my wife is a lower rate tax payer and she has more going into her ISA than into her SIPP.
Very quickly as I need to get on with my days work.
Pension v ISA has been done to death and I've sat through many presentations on both sides to say that there is no universal answer. For most a pension will probably be better, especially if a high rate taxpayer going in. But you might also want to look at both in a whole tax / inheritance planning situation. Pensions can be inherited tax free if you die before age 75 - ISA's can be inherited by your spouse without any loss of tax status. Pensions also fall outside of your Estate for IHT purposes, whereas ISA's dont.
The fee v performance is a much bigger arguement but as I have skin in the game on this one I wont comment further....not at this time anyway. I do agree with the % arguement, and don't charge the same for a £250k as I would for a £25k one. But engaging a financial adviser should not be about how much they charge but about what knowledge they bring to the table. Also, many clients dont have the time or inclination to pore over performance charts or asset spreads. That can be seen by how many people take part in these conversations compared to the whole CL community. Everyone wants to make the most of their money, but not many do as they think it's all too much for them. An adviser can cut through the jargon & make life easier for them. And some people are happy to pay for that service.
"If you had £1,000,000 pension transferred to SJP (and again let's assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000"
Just because you give a client a piece of paper that says they have £1m in their account doesn't mean their account is worth £1m. Disinvest the next day and it's worth £940K a profit of £60K. The zero charge after 6 years simply means that through its annual charges, SJP has had time to recover the upfront commissions paid to associates for getting the business.
So yes the whole £1m might be invested, but it's not all invested for the benefit of the client, it usefully obscures the fact that upfront charges are significant. It means a nice profit is guaranteed for each new client without needing to ensure persistency of business.
My daughter had a neighbour who knew naff all about finance before joining SJP. She had a wide circle of wealthy friends and made a fortune from selling them the SJP propaganda over coffee and cakes after getting some 11+ level paper qualifications.
Latest on SJP fees:
The firm has been in talks [with FCA] to further reform its fees, including the removal of early withdrawal charges for new clients by mid-2025 and simplifying various advisory and administrative fees.The company's complex fee system includes upfront and ongoing annual charges, with certain clients facing early withdrawal fees.
About £47 billion, or 30%, of SJP's assets under management, were subject to these exit penalties as of June this year, according to the Financial Times.
So SJP's model means it makes more money by getting clients on board and losing them than charging modest annual fees and retaining business through good service and performance. That's the only reason why SJP has happy shareholders and is held up as a successful business.
The fact is that fees have a far more negative impact on outcomes than performance and clients haven't the faintest idea how to benchmark performance and value for money. Instead, clients are mesmerised with nonsense about the breadth of funds that can be accessed and quality of managers, when in reality most of the industries funds are managed by a handful of the same managers under different platforms, branding and charges.
I saw that @BrentwoodMark is happy because - "my adviser rebalances my portfolio each year so that my portfolio is better positioned for the following year. I also have received numerous changes to fund managers throughout the year."
If it are me, I would ask why the need for changing managers if a manager selected previously is now no good but was selected in the first place.
Also, by definition you can only 're-balance" a portfolio if it started out being "balanced". A "balanced" portfolio normally means it has a range of different risk rated funds that create a blend to match a medium/long term objective against a benchmark.
Re-balancing is only required if selected funds are not achieving expected performance or the risk profile of selected funds has changed so that the investments are not following the path of the benchmark. If you don't have a benchmark you don't have a balanced portfolio to re-balance. What you have is a portfolio of funds with random outcomes not measurable for success or failure.
Given all statistics prove that fund managers cannot consistently produce out-performance through only selecting out-performing funds, the notion that an adviser has the knowledge to "better position" funds for the next year is wishful thinking.
What I accept is that people are happy to pay for peace of mind that the problem of investing is not theirs. It means advisers tell you what keeps you happy, not what is best for you.
Comments
It's all clearly laid out here in case you've not seen it.
https://www.sjp.co.uk/charges/pensions-charges
But yes, according to your website you charge the following:
1. 4.5% of the initial investment will be used to pay for the initial advice (plus 0.5% annual charge).
2. There will be an initial product charge of 1.5% of your investment, there will also be a 1% charge annually but waived for the 1st 6 years, unless you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund
So If I invest today £100k under 1. You would deduct £4,500 (I'll assume the 1st annual charge of 0.5% is on the 1st anniversary and yearly after that). Under 2 you deduct 1.5% (£1500) and also if I encash you will deduct 1% of fund value.
so £100k, less 4,500 less 1,500 gives you £94k, if I then encash it drops to £93,060.
Which part of that is incorrect then?
(I am a retired financial adviser).
All i can say from experience is that the average IFA is opaque with their charging structure and, to be frank, not very good.
However, that resentment doesn't justify the constant lies by the IFA community about SJP. I just set out very clearly what I charge (i.e. the total the client pays for the product, advice and fund managers) on investments and you somehow sought to re-imagine that by throwing in a couple of extra %.
Unfortunately that leads to people like Rob sl*gging SJP off left right and centre because he has a wildly incorrect understanding of the charges.
Give it 12 months it will be far, far more difficult for you guys to hide behind those lies. We already know the changes, for my business it will basically be the same on the pension side as the investment side i outlined earlier, perhaps 0.1 - 0.2% higher ongoing.
If the charges are unclear then it is only to the detriment of SJP in that one would be forgiven for thinking the charges are far higher than they actually are. This I would argue is better than the opposite approach that most IFA's deploy whereby, once pressed on total charges, miraculously the figure is higher than SJP and higher than initially quoted. Most IFA's are in no moral position to criticise SJP for their charges or quality of advice, yet most do.
Please therefore explain:
1. Under the heading of Advice Charges, it states "4.5% of your initial investment will be used to pay for initial advice" - you are now saying this doesn't exist? No where does it state it isn't taken if you stay for x number of years. The only mention of this is the 1% annual product charge (which is in addition to the 1.5% initial product charge) that is waived for the 1st 6 years if you stay, otherwise "there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment".
2. Under the heading of Product Charges, it states "There will be an initial product charge of 1.5% of your investment." Importantly it also states "There will also be an annual product management charge of 1% but this will be waived in the first 6 years for each investment. If you encash within the first 6 years of an investment there will be an early withdrawal charge of 1% of the value of your fund in respect of this investment."
Please enlighten us all as to where it states there is an exit penalty in year 1 of 6%, year 2 of 5% and so on?
Again, I'll quote the link:
https://www.sjp.co.uk/charges/pensions-charges
Please enlighten us as to where the true charges are hidden as according to you they aren't under the 'our charges' section.......
The effect of these charges
The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge (reducing from 1.5% to 1.35% after 10 years) together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6). This is equivalent to the Advice and Product charges above and not in addition to them.
In other words, we will waive the full 4.5 + 1.5 = 6% at the front end and you'll only pay it if you leave within 6 years, on a decreasing basis as set out before.
I'll accept that it could be clearer, but It is set out in this way because the regulator wants it set out so that a client knows what aspect relates to the product and what to the advice. In other words, SJP managed to get around the RDR changes with the FCA somehow and managed to keep this charging structure.
Should they have? no. Have most clients been better off because of it? Probably. Are there some clients who were worse off because of it? Probably.
In practical terms when we are undertaking a pension transfer we often reduce the level of charges payable. This often means that that period is no where near 6 years and the ongoing charges are lower.
Where we do agree is invest £1m and take it out 6 months later and the charge will be £60k (minimum).
Well, we can partially agree on that. In a worst-case scenario then yes.
But, in reality we bespoke the charges based on the size of the client in the same way all FA’s do.
IMHO It's nothing to do with GolfAddick but everything to do with your own website advertising, no where does it state those initial fee's are deferred for instance.
From the Pension funds there is an AMC of 1.5%, and then separate fund charges depending on which actual fund you invest (Multi-asset portfolios are around 0.39%-0.49%, single asset funds from 0.1% to 0.68%) which means a total AMC of around 1.9% -2.0%. Can you confirm that your 0.5% ongoing adviser fee is on top of this ? The brochure shows adviser charges & product charges as different so I'm assuming they are.
I apologise for getting a**y but it was a timing thing haha.
Either way, SJP aren't for everyone, but they do just the job for a lot of people.
In other words the average Pension client, assuming no discounting of fees (and only from now until Jan 2025) will pay;
- 0% charge deducted at the front end
- c1.9% Total Ongoing (Includes administration, product and Adviser)
- 6 year Early Withdrawal Charge (basically exit penalty) 6% Y1, 5% Y2, 4% Y3 and so on.
Again, that's the maximum permissible. I had a review yesterday where total ongoing was 1.56%. That covers all product, admin & advice charges.
New charging structure looks like it will be about 1.6% on the investment side and 1.8% on the pension side, with 0.8% technically an ongoing advice fee and therefore able to be turned off. But no doubt the details will change in the next 12 months.
It quite distinctly describes 3 different charges -
Adviser
Product
Funds
For Adviser it then splits it into 2 - initial (4.5%) and ongoing (0.5%)
For Product it says 1.5% - which is then shown in the Pension Charges Summary
For Funds it then says that they vary & then refers you to the Pension Charges Summary
Nowhere does it state that the ongoing is built into the Product Charge. Quite the opposite. It states
"In addition to charges for the advice AND the product (my Caps) there are charges for managing & maintaining your underlying investments".
To me, as an adviser who has spent 30 years dissecting product brochures/client statements etc, I would read that as 3 separate charges, just like SJP has said that they will specify by 2025.
Perhaps I should transfer my SIPP to SJP and get an illustration. That might clarify things.
Also, I'm.not sure what you refer to as EMC's as the literature is very clear. No way is the ongoing adviser charge part of the 1.5% AMC - both you & I know how ongoing adviser charges work & they are never incorporated into an AMC - especially not one that is very clearly shown on a charges document. Because, as you yourself pointed out, ongoing adviser charges can be reduced by the advisor should they want to - and the AMC in that document is fixed - certainly for the first 10 years.
Pretty bored at this point but it says “ The effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge”.
I can guarantee you that the AMC includes my 0.5%. If you look at the Pension charges summary (which shows ALL charges) you’ll note the total charges.
COYA
First, fees rather than performance are likely to be the biggest single drag on whether or not investments make money for you. At all.
Second according to this article, private investors on average have beaten the performance of the so-called average professional across every single time period for the last three years. https://www.thisismoney.co.uk/money/diyinvesting/article-12618595/Amateur-investors-outperforming-fund-managers.html
Those two things combined make the concept of paying for professional investment advice more likely than not to be an expensive mistake.
Anyway, here's a question for amateurs and professionals alike. Are you actually likely to be better off putting your retirement savings in a SIPP (taking the upfront tax relief but paying tax on your income in your dotage) or instead drip-feeding your pot of money into an ISA (getting any capital gains and future income entirely tax-free when the golden slippers of retirement slide on to your feet)? I am assuming your pot of money is not big enough to do both in any meaningful way. In particular I mention this because of the life-time pension cap imposed by this parsimonious and sneaky Government.
Now back to fees. The concept of paying a very large up-front fee as a percentage of your investment pot is an anathema to me. Surely with all other circumstances similar, attitude to risk, etc, etc, the advice should be broadly the same and cost the same whether the pot size is £250k or £1mn? Anyone who pays an upfront fee of the levels talked about here may want to reconsider their options. Then there's the question of whether you want on-going annual advice at all? What will it achieve for you? Would you be better off just paying an hourly rate for your up-front advice and then keeping a weather eye on your investments' performance from time to time? Because please don't be fooled into thinking that your friendly investment adviser will be doing any more. You'll get an annual health check but that would be about it!
Well then how about instead paying a financial adviser say, £350 per hour (that's top-level by the way, you could easily get away with paying £150) for the initial fact-find and recommendation and that's it? You can always go back for some ad hoc input if you really wish.
Now, we all know, don't we, that past performance is no guarantee of future results. (Just google Neil Woodford if you want a glaring example of that.) But, in my view there is an exception to that and that is with dog funds. Once a dog probably always a dog.) I won't mention names but if you are interested do a search on dog funds.
Anyway this paper reinforces my message that fees are the biggest drag on investment performance and indicates that the investments with the lowest fees tend to be the best performers. Interesting don't you think? https://business.leeds.ac.uk/faculty/news/article/713/past-performance-disclaimer-does-not-lead-to-good-investment-decisions
Sorry that was long-winded but I hope those that stuck with it to the end found some food for thought.
Personally as I head towards retirement I switched my largest SIPP to Vanguard. In part that was fee driven, but also de-risking, their fee's (or lack of!) save me a lot and I was happy with their investment choices. I was previously with Fidelity (and have kept the SIPP and some investments them), and whilst I was very happy with Fidelity I'm saving quite a bit in fee's. I've also over time switched to more ETF's where the fee's/charges are very low. My largest holding is in Vanguards S&P500 ETF, up 19.6% since I entered in June 2022 via them, that has an ongoing charge of 0.07%.
The debate on ISA's/SIPP's is down to personal (tax) circumstances as much as anything, both your tax rate when paying in but also likely tax rate on withdrawals come retirement.
I'm a higher rate tax payer and having trimmed back my work I can now pay some into pension again and effectively get 62% tax relief, so in that instance it's a no brainer rather than ISA (I do have ISA's also). Whereas my wife is a lower rate tax payer and she has more going into her ISA than into her SIPP.
Horses for courses as they say.
Pension v ISA has been done to death and I've sat through many presentations on both sides to say that there is no universal answer. For most a pension will probably be better, especially if a high rate taxpayer going in. But you might also want to look at both in a whole tax / inheritance planning situation. Pensions can be inherited tax free if you die before age 75 - ISA's can be inherited by your spouse without any loss of tax status. Pensions also fall outside of your Estate for IHT purposes, whereas ISA's dont.
The fee v performance is a much bigger arguement but as I have skin in the game on this one I wont comment further....not at this time anyway. I do agree with the % arguement, and don't charge the same for a £250k as I would for a £25k one. But engaging a financial adviser should not be about how much they charge but about what knowledge they bring to the table. Also, many clients dont have the time or inclination to pore over performance charts or asset spreads. That can be seen by how many people take part in these conversations compared to the whole CL community. Everyone wants to make the most of their money, but not many do as they think it's all too much for them. An adviser can cut through the jargon & make life easier for them. And some people are happy to pay for that service.
"If you had £1,000,000 pension transferred to SJP (and again let's assume full charges to keep it simple) every single penny of the Pension would be invested at the front-end. I.e. £100,000,000"
Just because you give a client a piece of paper that says they have £1m in their account doesn't mean their account is worth £1m. Disinvest the next day and it's worth £940K a profit of £60K. The zero charge after 6 years simply means that through its annual charges, SJP has had time to recover the upfront commissions paid to associates for getting the business.
So yes the whole £1m might be invested, but it's not all invested for the benefit of the client, it usefully obscures the fact that upfront charges are significant. It means a nice profit is guaranteed for each new client without needing to ensure persistency of business.
My daughter had a neighbour who knew naff all about finance before joining SJP. She had a wide circle of wealthy friends and made a fortune from selling them the SJP propaganda over coffee and cakes after getting some 11+ level paper qualifications.
Latest on SJP fees:
The firm has been in talks [with FCA] to further reform its fees, including the removal of early withdrawal charges for new clients by mid-2025 and simplifying various advisory and administrative fees.The company's complex fee system includes upfront and ongoing annual charges, with certain clients facing early withdrawal fees.
About £47 billion, or 30%, of SJP's assets under management, were subject to these exit penalties as of June this year, according to the Financial Times.
So SJP's model means it makes more money by getting clients on board and losing them than charging modest annual fees and retaining business through good service and performance. That's the only reason why SJP has happy shareholders and is held up as a successful business.The fact is that fees have a far more negative impact on outcomes than performance and clients haven't the faintest idea how to benchmark performance and value for money. Instead, clients are mesmerised with nonsense about the breadth of funds that can be accessed and quality of managers, when in reality most of the industries funds are managed by a handful of the same managers under different platforms, branding and charges.
If it are me, I would ask why the need for changing managers if a manager selected previously is now no good but was selected in the first place.
Also, by definition you can only 're-balance" a portfolio if it started out being "balanced". A "balanced" portfolio normally means it has a range of different risk rated funds that create a blend to match a medium/long term objective against a benchmark.
Re-balancing is only required if selected funds are not achieving expected performance or the risk profile of selected funds has changed so that the investments are not following the path of the benchmark. If you don't have a benchmark you don't have a balanced portfolio to re-balance. What you have is a portfolio of funds with random outcomes not measurable for success or failure.
Given all statistics prove that fund managers cannot consistently produce out-performance through only selecting out-performing funds, the notion that an adviser has the knowledge to "better position" funds for the next year is wishful thinking.
What I accept is that people are happy to pay for peace of mind that the problem of investing is not theirs. It means advisers tell you what keeps you happy, not what is best for you.