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.

@Sensible1 I personally find that article very misleading and promotional with regard to active funds.

First, the headline makes it sound as though in general and on average, active funds perform way better than passive funds. The data, however, suggest that in some very specialised "sectors", such as Property and certain parts of Asia, the average active fund performs better than the average passive fund, but that in some of the broader "sectors" such as Global Equities where most money is going to be invested, the vast majority of active funds do worse. The two larger areas where Active has usually beaten passive are EUR Corporate Bonds and European equities, and that is interesting. However what this really suggests to me is still that the average £ invested will do better in passive funds in most areas, though not all.

Second, the article is going by number of funds, not overall money invested, in assessing what percentage of active funds outperform passive. Active funds that outperform their benchmarks tend to be smaller, on average, than active funds that do not. What then often happens is that money rushes in to those small funds to chase that performance, and then performance often turns down after the fund gets large and the fund managers are unable to deploy $10 billion as well as they deployed $100 million. There have been some very high profile funds where the long-term track record is excellent but the median investor in the fund actually did worse than the market, because of this effect.

Third, the article focuses on how it is possible to beat the market by selecting the right active funds before they outperform, and this is true, but they downplay very much the fact that it is also possible to underperform the market by quite a large margin by selecting the wrong active funds. "Right" and "wrong" fund selection can be very much a matter of luck, and even if there is some skill involved, while we all like to think we are above average, on average, we are actually all ... average. It is difficult or impossible to predict which funds with strong historical investment returns will continue to have those and which ones will mean revert and become losers.

There is an article on a change in leadership for SJP in The Times today, hopefullymy share token works:

www.thetimes.co.uk/article/2d934e7a-5261-11ee-abb5-ce4135341f1b?shareToken=fb0463f3cfa2e8a8ec0d758241d4bc9e

Here are a few quotes:

^The advisers are self-employed but are only allowed to sell SJP or SJP-approved products, unlike their independent equivalents. The adviser typically charges 5 per cent on an initial investment for advice on ISAs and unit trusts, followed by a continuing annual charge of about 1.6 per cent on a typical portfolio.

It also announced it would cap annual management charges for about 65,000 customers in line with new “consumer duty” rules introduced by the Financial Conduct Authority, the City regulator.

The rules, designed to ensure fair value for customers, came into effect at the end of July.

The distinct business model at the FTSE 100 company has come under increasing scrutiny about its ability to deliver performance at its funds once fees are taken into account.^

If they are having to change their fees to meet fair value rules then it rather suggests that they have not previously been fair or offered good value.

https://www.thetimes.co.uk/article/most-of-our-funds-dont-deliver-says-sjp-5xp3002bp

Yodelar have been reporting on this for years. The best thing any investor in SJP can do is to go to Yodelar, and submit their portfolio for a free performance analysis, and it will show you the performance and ranking of each SJP fund you are invested in, in relation to all funds in the same sector.

This is a valuable free service and one you all should use

You can upload a statement, and receive a full performance analysis in 24 hours

https://www.yodelar.com/portfolio-analysis

@Sensible1

Who are Yodelar? A two man band IFA who try to get business by denigrating other firms. It’s not just SJP they have critiqued. The thing is now in light of consumer duty rules, companies have to offer fair value and its not just SJP who have to demonstrate this but all firms. Some firms charge more than SJP and other firms don’t. The point is, the industry is going through another shift and companies need to adapt. Naturally the largest firms will get the most press but its happening across all firms.

The reason why SJP is finding it particularly difficult to adapt is the reality that their funds are not performing as well as they should be as their charges are higher than they should be. They're particularly vulnerable to being found to give less value for money for this reason.

Who is BrokerG?

An anonymous individual on Mumsnet who will not disclose whether they are affiliated with SJP and whether they may stand to gain financially if investors decide to dismiss or ignore the numerous concerns about SJP fees and investment performance that have been raised independently on this thread by numerous individuals.

I am happy to to disclose that I, personally, have zero affiliation with SJP, zero affiliation with any firm that competes with SJP, and nothing to gain or lose if people invest with SJP or somewhere else.

I am happy to to disclose that I, personally, have zero affiliation with SJP, zero affiliation with any firm that competes with SJP, and nothing to gain or lose if people invest with SJP or somewhere else.

Same. In fact, I'd say there's only one individual on this thread that hasn't declared they have no interest.

Hopefully investors will compare fees and fund performance using the multiple resources available online and come to their own conclusions.

Personally I'd start with HL, AJ Bell or interactive investor for a mainstream platform with plenty of guidance and ready-made portfolios. Or Freetrade or Trading 212 for a low-cost, more basic offering. But not SJP.

@sep135

Good for you but there are 1m clients at SJP and clearly they feel the same as me! Investors always compare fees and performance. What you are not grasping is that there are other firms who are more expensive and who have worse performance. Clients are free to chose who they work with. It really is that simple.

You did not address that to me, but I am absolutely grasping that there are worse firms out there that charge even higher fees, and I suspect that others realise this as well.

However, if I know that a restaurant serves bad food and is overpriced, then I will not go there just because there are other restaurants nearby that serve even worse food for even higher prices. Instead, I will keep looking until I find an alternative that offers good food for fair prices.

Such restaurants do exist, as do investment firms that do not charge excessive and opaque fees for funds that underperform on average.

@YankeeDad
so don’t go back to that restaurant, it’s your choice. But if other people want to go back it’s up to them, not you. Again, people have choices.

I totally agree. But in addition, if I have seen information telling me that a restaurant serves bad food and is overpriced, and then someone asks about it, I am going to tell them!

@YankeeDad

but you haven’t been to that restaurant. Isn’t it better to read reviews from the people who have been?

https://www.vouchedfor.co.uk/network/2-st-james-s-place

The analogy breaks down here, because food quality is subjective, and investment returns and fees are objectively measurable.

Also to take the analogy further, I never ran or owned a restaurant personally, nor did I work directly with this restaurant or with any of its competitors, so I think I can be unbiased. I did, however, work for many years in the restaurant industry serving a different segment. Given the nature of the work I did, I have enough knowledge of the industry that if somebody asks me about Restaurant X, just from what I can learn publicly about their menu, their pricing, their ingredient sourcing and their reputation, I can be confident enough in the validity of my opinion, without having eaten there, that I will share that opinion with others, especially because again investment returns and fees are objectively measurable.

Regarding the particular review site you mentioned, it is my understanding that in order to even be listed on it, a service provider such as SJP has to pay them money, because their business model is to sell customer leads to service providers who pay to be listed. That does not mean that the reviews posted on it are necessarily biased, but as a person looking for objective reviews, I do not like the sound of that business model.

Finally, you still have not told us whether you co-own or perhaps work for that restaurant, or for its PR firm, or whether you get paid based on the number of people who eat there!

If, after having explained them, clients are willing to put up with bottom quartile returns and egregious fees because that lovely man from St James’s Place is awfully nice to them once a quarter and brings them some flowers, then there’s not much the rest of us can do.

But we should still keep point out how bad SJP are, because most people like their investments to do well.

It is also slightly weird how BrokerG refuses to confirm whether they’re associated with SJP. Well, I say weird…

And putting my cards on the table, one of my jobs is to research and review the key features of the 'restaurant' sector in an independent capacity. I think that gives me sufficient credentials to give a view.

I have a number of firms that contact me to be added to the review and, like the Birds Eye country club advert with the peas at the gates, only the best are let through. (That probably shows my age...).

It's pretty telling who's saying shop around for the best option for your circumstances and the one person who's telling people to sign up for expensive, underperforming SJP investments.

I'd prefer to read a doctor's professional appraisal than whether his patients thought he has a nice bedside manner.

I work for an IFA firm.
it’s astounding how many clients in the last 6 months are transferring from SJP onto our white label platform.
and SJP sure like to make the process difficult & more drawn out than it needs to be.

@sep135

But they are not the most expensive as everyone here seems to think!

https://www.ft.com/content/f27a6337-c204-478d-a8e7-9148997b519c#comments-anchor

today from the FT

Good news, in that case we'll also be advising people to steer clear of the other firms that are charging customers over the odds.

There's absolutely no need to pay through the nose in fees, particularly for underperforming funds.

No one is going to be able to read this, as it's behind a paywall. But "we aren't the most expensive!" Isn't a huge selling point.

The best quote from that FT article is this:

“Compounding effects reveal how these fees can tot up. A £500,000 portfolio growing with a simplified 5 per cent annual return for 10 years would pay almost £150,000 in annual fees (set at a flat 2 per cent). For a passive equity index fund, charging 20bp a year, the total is just £16,000.”

But I’m sure BrokerG will be along soon to convince us why SJP adds roughly 2% of performance per year instead of putting its clients in under-performing funds.

Vouched for is curated and frankly clients don't know what they don't know. I think they'll be soon wondering what's going on with their investments when dodgy markets come home to roost. It's easy to hide big fees in rising markets, but not so easy now....

Clearly BrokerG has skin in the game

@Applesaarenttheonlyfruit

https://www.nutsaboutmoney.com/reviews/st-jamess-place

BrokerG we'd have a lot more respect for you if you were honest about your SJP connection. If you work for them, it's natural that you'd want ti extol their virtues.

But the one-sided, ignoring the elephant in the room (in terms of fees and performance) posts aren't giving any credence to your views.