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.

@Everanewbie

SJP do prove discretionary portfolio management though through their DFM service?? I believe they bought a company called Rowan Dartington 8 years ago to provide this service. Problem with DFMs is that it is only bespoke up to a point. It is ultimately managed beyond your control. You can still bespoke with funds, not just DFM. I.e. create a portfolio tailored to your preferred asset allocation and restriction. All the same stuff. Only difference with DFM is you can have direct assets but such assets are held within funds anyway so there is no difference apart from more tax efficiency within funds as opposed to DFM. I think DFM is a bit of a con with very highly paid investment managers who eat into the fees and they don’t do much but maintain relationships.

You state that there is more tax efficiency within funds as opposed to DFM, as if that were a universal fact. The reality is, sometimes funds are meaningfully less tax efficient than DFM. It depends on the asset class, the investment strategy, and the client circumstances.

You also discuss the distinction between DFM and funds, but I think a more important distinction is the distinction between investing and advising. SJP does both, which brings it the business advantage to SJP of collecting both layers of fees from any client they bring on board (advice fee plus either fund management fees or DFM investment management fee). However, that means that even with an excellent advisor, they may be restricted to choosing among several mediocre alternative options.

@Everanewbie

Not really as their DFM can select whole of market funds and individual stocks. Unlike SJP funds so effectively SJP can offer everything. Their funds or whole of market through their DFM.

Yes, a Rowan Darlington portfolio could be available, but I wouldn’t mind wagering that it represents a very small subsection of SJP clients. I don’t recommend DFM on performance but as a service with a designated investment manager to discuss their investments with and additional attention and scrutiny, or even just an expert handhold. Or perhaps if a client has a very specific goal. Some people don’t value that and are happy to go cheap off the shelf, but others do. It’s the reason some pay more for the luxury Uber and others don’t. You might get to the same destination but the experience is very different.

You don't get to the same destination as you would with an independent financial advisor though - look at the funds they're using.

It's a fiction to suggest that most SJP clients have access to all funds. They are not offered that. Instead they have access to a portfolio that is lamentably patchy especially in light of the fees.

The problem is that SJP are charging saville row prices (opaquely too) and providing of the peg solutions that aren't really even that competitive for performance

This is key...performance isn't good enough to justify their fees or reputation. If I walk into Saville Row I expect higher prices but equally I expect higher performance. If it's less than the tailor on the high Street then it's understandably to be disappointed and they will lose their reputation.

SJP need to up their performance but if Broker is representative of their people they are still in the denial phase, not finding solutions phase.

And, actually, in the case of investing, the non Saville Row option may well deliver higher returns.

Unless you're doing some fancy tax planning, the mainstream platforms have a pretty decent set of suggested portfolios. Or you can use a robo-adviser as a halfway house to individual financial advice for about 0.8% all in. Not personally a huge fan as they're mostly ETFs but another option worth considering if you want some guidance.

@Ingrainedagainstthegrain

They do have access to whole of market funds and individual stocks you imbecile via Rowan Dartington (RD), their DFM. I suggest you contact them and admit you are later wrong on this thread. In addition, IFAs can’t recommend individual stocks so they are limited to funds. You actually get more of the whole of market with SJP/ RD

Well that is incorrect isn’t it, as by the same token IFA’s can use a DFM so they also can get direct stocks.

I don’t think ‘imbecile’ is particularly helpful.

@BrokerG I'm not sure SJP would appreciate your advocacy given your insulting tone. I get that a Rowan Dartington Discretionary portfolio is an option for SJP advisers. Most vertically integrated businesses offer some kind risk graded model portfolios (often dressed up with use of 'discretionary' or 'managed') with 1-8 or green to red, or A to F, and also offer a real discretionary portfolio via an internal DFM. The worst thing I saw was a DFM recommendation to invest in a model portfolio! They worked hard for their 1%!

But those options are open to a true IFA too, and they can change DFM if they dislike the performance, service, charges etc.

Look, I'm not an SJP hater. I believe that the vast majority of people would be better off instructing an SJP partner than not taking advice at all as I said upthread. My issues are that their charging structures are high for off the peg investments and seem to go against the spirit of RDR, plus their servicing teams appear to be as obstructive as possible to prevent other advisers researching their clients products.

To absolutely no one’s surprise:

https://on.ft.com/45K4yj7

”Watchdogs are also concerned about whether high upfront advice costs are in customers’ best interests and whether SJP makes it too difficult for customers to stop paying advice fees further down the line, according to the people.”

What on earth is wrong with you? Do you think you're making a case by name calling?

Must clients do not have access to that, as you will know.

I was about to share this (from Investment Week).

This part was pretty damning:
A former employee told the FT that regulators have been pressuring SJP for almost a decade to overhaul its fee structure, as they considered it anti-competitive as it locked customers in, with some clients struggling to understand the fees they were paying.

I read that earlier. Funny that!

Best hope they don't invest their portfolios in SJP shares

The regulators are finally addressing SJP fee structure.

FT article

So much silence ....

Might be 1-0 to us imbeciles after all.

😂

St James’s Place is abandoning its controversial practice of imposing steep exit penalties on clients, announcing that the fees revamp will reduce its margins and lead to an upfront cost of at least £140 million.

www.thetimes.co.uk/article/ace8e45c-6cd1-11ee-b0f3-053d83492f27?shareToken=181ce7e7c3c9922eac956948a60a4b9e

My bank advised me to use St James yeah, well crap

It would be interesting to know whether the FT shakedown or FCA pressure ultimately forced their hand? I'm guessing a bit of both.

Interestingly, some of the mainstream platforms (who are already a lot cheaper than SJP) have launched their new low cost pension products in the last week, ahead of the new FCA rules on ready made pensions in December.

The HL ready-made pension will be 0.75% all in and ii will charge £5.99 for its pension essentials product (capped at £50k).

Given it comes on top of cuts to platform and trading fees this year, I'd be very worried if I was SJP. It's a very competitive market and if the negative press prompts their customers to actually look at the fees they're paying, there could be quite an exodus.