St James’s Place.

[ZealAndArdour]

Hi,

Just wondering about this company. I understand they’re quite legit and well known.

My dad (not vulnerable, self employed, works still, only vulnerability is my siblings death a few years ago and he lives alone) is very shrewd and has always looked after his assets, saved very hard and tried to make sure we’d all be okay in the future. He’s been using them for several years for various things; consolidating pensions, setting up an asset preservation trust, etc.

But he seems to be in quite regular contact with his advisor (I’ve met the guy to sign paperwork and have some things explained to me, he seems nice enough) and has also received a lot of referred business from my dad making recommendations to friends, etc. The advisor is now taking my dad and some of his pals on quite fancy days out to thank them for the referred custom and just seems to still be very much involved in everything, I thought the things he’d been engaged for were sort of contact-Intense to begin with while they were set up and then might just be yearly reviews of everything. But my dad will still get calls from this guy quite frequently, and he’ll say “oh I’m not answering that, it’s Charles, he probably wants me to invest some more money, he can wait”.

I’m just wondering if this is a normal level of continuous involvement with the financial advisor, I know my dad has good pensions and a respectable portfolio of assets, but unless I’m totally in the dark I don’t think we’re talking millionaire status.

Could there be anything shady going on? Is the financial advisor meant to be in contact this much and taking them out?

My dad would also like me to meet with him to discuss my pensions and assets and tbh I just find the smarming all a bit much, and this level of contact too intense to maintain.

Thanks.

Actively managed funds consistently underperform broad based index funds. That plus exceptional fees erode what you could earn over time.

try this calculator to compare fees (and which doesn’t even factor in differences in historical performance) to see just how much of an impact fees make to your eventual fund. 1% or 2% may sound worth it for outsourcing to someone in a fancy office who treats you to corporate hospitality but nothing when it has the potential to cost you hundreds of thousands.

www.alandonegan.com/fees.html

the Rebel Finance School is a great way to learn about this for yourself.

I used to work for a company that traded as SJP. I was an admin assistant. I would do all the work deciding which investment options were available and how they compared against existing investments and then put them in a pack for the FA to sell. God forbid if they were printed on the wrong paper (5 different types). Absolutely awful company to work for, it was an old boys club and like others have said the fees are extortionate.

Actively managed funds consistently underperform broad based index funds. That plus exceptional fees erode what you could earn over time.

That's only half the story though. Some of those active funds that outperform index funds do so by a huge margin.

They also have the potential to take some action in falling markets, albeit not as much as a total return fund.

Perhaps, hop, but if it’s only 4% of actively managed funds which can outperform and the ones in the 4% change every year, I’d rather take the long term bet and stick with index funds.

It's an interesting point for debate. I had the joy of analysing this for a work piece.

The conclusion seemed to be that it was well nigh impossible to outperform US large cap passives, partly as that market is so well-researched.

There was more scope for outperformance in the U.K., particularly in the small/mid caps, I'm guessing as the fund managers have the potential to uncover an undervalued gem.

I would say that analysing your funds against their peer group on sites such as Trustnet helps with picking the active winners. Then again, I had a bit of a Baillie Gifford disaster last year when the leading lights fell off a cliff.

Very much depends on the advisor. I've had some contact with them... a previous advisor i really didn't like and didn't trust, current advisor is a lovely bloke, not pushy at all and has given very sensible advice. He has worked with my dad after my mum's death and has been nothing but kind and honorable. Our previous one dropped us like a hot potato when our finances changed for the worse (personal circumstances not investment related), this one has treated us just as well when we need to release money as when we had it to invest .

I'm sure they're nice people (I know one). But if the initial fee is 5%, that's pretty outrageous. Add some compound growth on that initial cost over 10-20 years and you could be talking about tens of thousands of pounds.

You really don't need to be paying that for some financial advice.

A friend of mine uses SJP. I met with her advisor and the target was 6% annual return but out of that (whether you make the 6% or not) SJP charged 2%!!!
And when you enter the cost is 4%!!
I walked away..

if you are invested or considering investing with SJP you can get a free performance analysis from Yodelar, this allow you to see how each of their funds rank in each of the sectors. You can upload it yourself, or the team there will do it for you. Hope this helps. Its hard making the right investment choices.

There are 85,000 + funds available to investors St james place only offer 120, they are restricted and not whole of market so they cannot advice to your best interests with such limited access.

I think so many go with SJP because of the relationship they have with their partner/adviser - this is important for most, and sure some of the SJP guys are great, but at the end of the day, anyone responsible for looking after your money should have a fudiciary care to do things right for you. SJP advisers cannot say they can do this if they only have access to 0.000001 or whatever it is of the market.

They should not be quoting any projected returns, how would they know?

Best to use both active or passive if they are performing best in their sector. Also some sectors do not have passive funds, therefore an investor that focuses on passive only is not optimising their investments.

They are an excellent company and I use them. Try not to look at the negative reviews from competitors, sour grapes. You don’t have to pay any upfront fees and the ongoing is lower than other like for like services. They also offer discretionary portfolio management if you don’t want to buy their funds. This means you can have individual stocks and third party non SJP funds. I get great service and a range of wealth planning as and when I need it.

For the avoidance of doubt, I don't work for a competitor so no sour grapes from me. One of my friends also used to work for SJP and my father in law uses them. But, honestly, the fees are pretty outrageous.

I interviewed some fund managers last week and one of the key themes was that annual equity returns of 5-10% won't be realistic for the next few years. That makes choosing a low fee option even more important otherwise your gains will be swallowed up (or losses exacerbated).

They also lose credibility for preventing their funds from being compared against their peers on Trustnet such that they're in the unclassified sector rather than global etc. If they're confident that their funds perform well, they should allow them to be included in the sector analysis like the other fund managers do.

Any of the mainstream platforms (Hargreaves Lansdown, AJ Bell etc) offer plenty of support for those who want the extra hand-holding for a competitive fee.

Not true. They also have a discretionary management arm through their acquisition of Rowan Dartington which means you can invest in non SJP funds and individual stocks as well if you prefer.

Dealing with them in the probate process is utterly painful

If you are going to do that then why would you pay SJP fees? It would be better to do it yourself or go through an independent wealth manager for the discretionary management.

Sjp aren't really independent as they only use sjp products. They sell hard and are highly incentivised - they have a bonus system that is quite legendary. While not awful charlatans, I would personally use a truly independent financial advisor who can make a more impartial recommendation. If your dad's approach is less aggressive then that should be respected.

What are SJP fees?! Rowan Dartington are an independent discretionary wealth manager and you pay Rowan Dartington fees. They are not allowed to invest into SJP funds. All the SJP slagging off is a myth to me. Look at their latest results. Clients ploughed in £3bn of new money into SJP. If clients weren't happy they would put their money elsewhere. Think about that. Not hard to compare costs these days and if you look closely, SJP a less expensive than many other wealth managers.

Their DFM is independent. It's called Rowan Dartington www.rowan-dartington.co.uk/ and they don't use SJP products. Better get your facts straight before commenting.

Have a read of the Moneyvator website - they have lots of interesting (and easy to understand) articles. Have a look as well at their "slow and steady" posts to get an idea of real world performance of a portfolio using low-cost index funds.

BrokerG

They are largely using SJP products as you will know well. Tis not the same!

Look, I think all financial advice is a lot to do with psychology anyway. People like to feel safe. An expert is an emotional buffer. Most people don't really understand there is no way to make lots of money through amazing investments unless you're also able to take high risks. Ordinary people have this idea that a financial advisor can make them a lot more than they'd make on their own. A good financial advisor doesn't pander to this. Instead they use their knowledge to keep clients' money safe over the time period that's right for them, with the level of risk that they can afford to live with. People could do that on their own, often, but they wouldn't have someone to panic to when there's a scary headline or they can't agree with their spouse about the best thing to do next.

SJP sell the idea that they can do amazing things because they're cutting edge etc etc so it's worth the fees. It's really not as most on this thread agree because there is no magic money tree - except for the SJP advisors themselves who are selling hard to get the bonuses. And the cruises. Oh the cruises! I've no doubt there are some who care but the culture doesn't really encourage it. They also work their admin into the ground (no I'm not one).

That said I would absolutely use a cautious diligent IFA to be that emotional buffer, spread risk, alert me to clever tax loop holes and move my money quickly when something like Brexit happens. Because I can't be bothered, I'm not aware of potential pitfalls and I'm not abreast of every little change. Most of the time an ordinary person can manage but there are moments in these crazy times when a diligent IFA can act quickly to protect your interests, if they care. So I'd go for caution every time because that's what they're there for. SJP doesn't work like this IME. A SJP advisor will have chosen to work with them because it's a good career, not because it's the best way they can serve their clients.

Ordinary people have this idea that a financial advisor can make them a lot more than they'd make on their own.

I'm the opposite, I nearly always make substantially higher returns than my FIL (who uses SJP) and my father (who uses an IFA). But I agree with you and there's so many free resources available for people who are thinking about managing their own investments (I'd particularly recommend Trustnet which ranks the funds against their peers).

While I have an investment banking background, I taught myself about personal investing as we have an interest only mortgage backed by S&S ISAs.

I now work in the investing industry (but not for any of the advisers or fund managers) and it's changed a lot in the last five years. I'd say the likes of Hargreaves Lansdown, AJ Bell, Bestinvest and interactive investor are all good options in terms of customer service and portfolio ideas at a low fee.

But now there's also zero trading commission/zero platform fee platforms such as Freetrade and Trading 212. While they don't have the investment range of the mainstream platforms, they're a good option if you trade shares regularly and don't want to incur fees.

Interestingly both ii and AJ Bell have reduced their trading fees in the last few months as the pandemic share trading boom subsides and they're fighting to retain their level of assets under management.

Our experience is SJP only offer a discretionary service to a small proportion less than 0.01% of their high net worth clients when they feel they are going to lose these clients who come to the realisation the service has less value due to their restrictive nature. Aside from the articles on the times, this article from Yodelar is based on factual information and is well worth a read

https://www.yodelar.com/insights/st-jamess-place-review

They have banned the cruises. What’s wrong with furthering one’s career??? Also, you can’t be successful if you are not doing right by clients and they are by far the most successful Wealth management company in the UK so clearly they are doing well for their clients and that’s why clients added £3bn of new money this year. Clients could have deposited money elsewhere but they didn’t. Because when they compared the fees and what they get for it they saw that SJP are a better proposition and it’s not hard these days to do comparisons. People are more informed now.