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.

they are by far the most successful Wealth management company in the UK

They didn't even make the top 20 adviser firms in the recent FT Adviser league table. The methodology focuses on retention, performance and client focus as well as size and sales.

top100.ftadviser.com/

But their accounts suggest they had a client retention rate of 96.5%. That’s pretty outstanding! Surely if clients weren’t happy they would leave?

broker g

I think it's pretty clear that you're the only informed person on this thread with such a glowing view and you haven't spoken to the outside links at all. It's all very...SJP actually.

People don't necessarily know if their financial advisor is doing the best for them, a bit like doctors. They know if they feel reassured and energised when they leave. SJP really gets that.

I have £18m invested in markets personally and across my company of which £14m is with SJP and the rest with Brewin, Vestra, Investec. I can assure you that I am aware of other companies.

As far as I know they lock you in for 7 years with a penalty to leave which could explain the high retention

SJP are a bunch of pompous know it alls who care for no one but those with the highest assets.

I know one who gleefully tells people he “cuts the chaff” from his portfolio each year and dumps people he doesn’t think worthy of him anymore to newer RMs. I wouldn’t touch them with a bargepole. Overpriced and see their clients as cash cows not people.

People can make their own minds up but all I'd say is that fees can make a surprising dent in a portfolio over time, particularly for longer term investments such as SIPPs.

If you need some hand-holding, there's many options beyond SJP. As I mentioned previously, the mainstream platforms offer various options, from shortlists of selected funds to model portfolios at significantly lower costs.

SJP typically offer their own funds (point about discretionary arm noted). If I had one piece of advice (part of my job is to rate the various providers), it would be to pick a whole of market platform or adviser. Even fund managers such as Fidelity offer third party funds.

And ask for what quartile a fund manager has achieved over 1,3 and 5 years against their peer group (or look them up on Trustnet) and whether they've consistently outperformed their set benchmark. Or look at passive, low-fee options such as tracker funds.

brokerg

Right. So a VIP client then who does need a financial advisor. You're not in a position to speak to the masses about how great SJP would be for them!

This is an old thread but interesting. On retiring and inheriting a lump sum I was, like most of us, not stupid but too involved with other things to understand labyrinthine financial dealings, looking for advice. Two friends recommended SJP “expensive but good”.
Lovely agent, putting forward tax saving products like ISA feeder Unit trust, Investment Bond which I simply would not have known about. But then I looked at the performance examples and realised that without good returns they would be earning more than me from the investment. To say nothing of the 6 year tie ins at an unpredictable time of life. I am ashamed to say that that was when I googled them.
It is, however, extremely difficult to find an independent adviser who charges much less. And easy to spend anxious hours scouring the internet for reviews and comparisons.

100% they are NOT independent. The advisers are salespeople for SJP products only. An independent advisor has access to the whole market, SJP advisers only sell SJP products. They are brilliantly marketed, however, the results are mediocre at best and their charges are very high, with a scandalous 6% penalty to withdraw your own money (reducing over 6 years on a sliding scale). Avoid.

Would you really trust an independent IFA picking the best investments? IFAs are insurance salesmen in the main and if they were good at picking investments they wouldn’t be IFAs. I would rather have an investment committee along with investment consultants have a centralised investment research process rather than an IFA picking from a Chinese menu of funds. SJP can also provide whole of market through their discretionary fund manager arm, Rowan Dartington so clients don’t just have to have SJP funds if they don’t want to. Sounds like you haven’t done your research.

Would you really trust an independent IFA picking the best investments? IFAs are insurance salesmen in the main and if they were good at picking investments they wouldn’t be IFAs.

That's very harsh (ironically my friend has just left SJP to be an IFA).

I work in investing and I'd recommend everyone to look at whole of market investment providers, whether via a DIY investment platform or via an IFA.

If you're going to pick that type of in-house managed portfolio, I'd go with someone like Fidelity who at least allows its funds to be included in independent resources like Trustnet so you can compare how they perform against their peers.

Personally, I'd go for one of the mainstream providers like HL or AJ Bell and either pick your own funds, pick from their shortlist of funds or choose one of their ready-made portfolios. You'll get a higher performing portfolio at far lower fees than SJP.

Bargepole!!

With all due respect, that's bollocks. IFAs have to pass a plethora of exams. It's a highly skilled profession .They don't have a vested loyalty to any products and are able to put the client first. SJP advisors are trained to do a hard sell about these high powered investors who choose their funds but the reality is that there's no magic formula to making it big. The need is for a diversified portfolio that reflects the client's needs and attitude to risk.

@Ingrainedagainstthegrain

IFAs take their exams via the Chartered Insurance Institute so they are insurance salesmen, not investment people. I would rather have a FTSE 100 company who have a centralised investment process where-bye an investment committee, independent consultants and economies of scale drive an investment proposition. Not a one man band or a few man band of IFAs randomly choosing funds. SJP can provide portfolios of funds and individual stocks through their DFM, IFAs can’t. That’s why they are the biggest and most successful Wealth manager by far in the country. But I see that IFAs are consistently bitter.

@BrokerG Are you or have you ever been affiliated with or employed SJP by any chance?

While it is true that the Chartered Insurance Institute is one of the organisations that trains IFAs in the UK, the curriculum for its Diploma in Regulated Financial Planning is totally different and not focussed on insurance. There are others, such as LIBF (London Institute of Banking and Finance) and CISI (Chartered Institute for Securities and Investment).

Interestingly St James Place itself uses the CII basic diploma in regulated financial planning as the starting point for training its own advisors!
https://www.sjp.co.uk/academy/programme/term-1-gain-professional-qualification

Only 1/6 of the content is about insurance. The rest is about understanding UK regulation, a basic understanding of investments and wrappers, the UK tax system, the UK pension system, and then a consolidation unit that puts it all together. Zero percent of the content is about how to sell, and the content contains repeated examples of how an advisor must put the client interest ahead of their own commercial interest. I confess I find myself wondering how much of the rest of SJP training programme may focus on sales ... I am guessing quite a lot.

I have spent a lot of time evaluating third-party investment managers for management of family assets.. SJP was initially on the long-list of managers that I considered, but they got thrown off of my the list very quickly for two main reasons:
(1) hugely excessive fees: when I spoke with them, in addition to a huge 4.5% upfront charge, they were going to take well over 1.5% of assets, every year, in addition to the embedded fund management fees, and because they use a lot of active funds, the all-in fees were going to be something like 2.5% of assets if not more. They might say "do not worry about fund fees because the fund pays the fees", but that is sleight of hand: everything the fund pays is paid by the investor. In a world where a balanced portfolio might have a long-term expected return of about 6-7%, 2.5% / year plus 4.5% upfront is about half of the total market return for an investment that is held for 9 years!
In comparison, for assets that I manage myself, the blended all-in fee for funds, platforms and trading is well below 1%, probably closer to 0.5%. For assets for which I use advisors, it is closer to 1.5%-1.75%, which I already consider too expensive. But SJP takes way more than that.
Maybe you, personally get a much better deal if you really have £14 million with them, or if you are a former SJP exec with a special deal, but I suspect most clients will pay 2.2%-3.0% of AUM when all of the costs for "wrappers" are taken into account.

(2) business model / ownership structure: as a listed company, SJP has three sets of mouths to feed: (a) shareholders (b) corporate management (c) its own advisors. SJP would logically incentivise its advisors to grow assets under management and to maximise the "yield" (=the percentage of assets under management that they take every year) to the highest that their clients will bear. As far as sales are concerned, they may not sell traditional insurance, but they do appear to sell pensions, "investment bonds", and other structures that make it relatively difficult and expensive to take money out, plus they take a ridiculous amount going in.

In my view, from the client point of view, the ideal ownership structure for an investment manager or investment advisor is private and owned primarily by the people who provide advice or manage money. Ideally they would work with a medium sized company, big enough not to be a one-man band, but small enough not to have multiple layers of management and owners who each want their cut.

Even the SJP Investment Committee doesn't get it right all the time.

£29bn in dog funds isn't really anything to be proud of.

<a class="break-all" href="https://www.google.co.uk/url?sa=t&source=web&rct=j&opi=89978449&url=citywire.com/new-model-adviser/news/sjp-has-29bn-in-underperforming-assets-as-dog-funds-rocket/a2423629&ved=2ahUKEwjb9ty2j_OAAxVMV0EAHcigD-EQFnoECA8QAQ&usg=AOvVaw3jAagHDYimL5VaicWbTCHA" rel="nofollow" target="_blank">Citywire article 14 August 2023

But I see that IFAs are consistently bitter.

I'm not an IFA nor do I work for an investment firm so no direct skin in the game. But I do work closely with fund managers, wealth managers and D2C investment platforms in an independent capacity for work.

I'd put SJP pretty near the bottom of the list, both for fees and performance. People don't always realise that even a 0.2% difference in annual fees can mount up to thousands, if not tens of thousands, of pounds over the life of an ISA or SIPP.

There's so many low fee platforms and high performing funds to pick from. The DIY investment industry makes it much easier to pick your own investments than a decade or so ago.

@grass321 so you know that funds have ters of 1 to 2% and wealth managers charge 1% plus vat plus fund costs so easily above 2%. So what’s the difference between who you talk about and SJP? It’s the same fees and performance will vary from one manager to the next. 90% of SJPs portfolios have outperformed the ARC benchmark so there you go.

@Ingrainedagainstthegrain

whether a private or listed company, any company will look to benefit its shareholders and staff. A wealth manager’s business is to increase aum and service clients. That’s what they are in business for. They are not there to lose shareholders money. Wealth managers charge c2% all in. Go to Brewin, Rathbone, Investec, UBS you will see it can be up to 2.7% so no different to SJP. SJP are actually lower if you consider they include financial planning which is extra at other firms. I’m a client of SJP and the initial fee is negotiable and so are the management fees. It depends on the relationship one has with an advisor. Bottom line is, if clients aren’t happy they can leave but I see they are as they have a 96.5% client retention rate. There’s no shortage of competition but as for me I’ve had money invested with 4 other managers and I decided to give all to SJP after many years of performance comparison. I put that down mainly due to the asset allocation decisions.

so you know that funds have ters of 1 to 2% and wealth managers charge 1% plus vat plus fund costs so easily above 2%

Most mainstream passives charge 0.1-0.2% and I don't think I pay an AMC of more than 0.7% on any of my active funds. I pay 0.25% on my platform (with a cap on shares and ETFs). So I'm all in for about 1% including VAT.

Go for a flat platform fee like interactive investor and it's even less. Plus a number of the zero commission providers offer ETFs. Or you can pick a Vanguard ETF for a low platform fee and AMC.

SJP charge very high fees and are highlighted in Bestinvest's dog funds. It's a bad combination.

Anyway, this is rather a busman's holiday for me so I'll leave it there. If anyone is wondering where to hold their investments, I'd have a good look at fees and whole of market investments before picking your provider.

Don’t SJP guarantee you can’t loose any investment, so if your pension etc goes down, then they’ll guarantee your original investment?

@grass321

you are talking diy and no fund has a ter of 0.25% unless it is a market tracker(etf). You are comparing apples and oranges but if you compare like for like I.e full wealth management service you will find SJP are lower than most competitors. Enjoy your busman’s holiday.

@grass321

Schroders had 10 in that dog report last year but people aren’t as obsessed with them as they are with SJP. The report this year also shows Bailey Gifford having the worst fund performance by far and no one seems to talk about them. You forget best invest are part of Evelyn who are a competitor. For them it is free marketing to write this report. You like like a true diy novice I’m afraid.

SJP sell dog funds. Some astonishing number (about 80%) of their funds underperform the market.