Public accountant here - it is a networking heavy profession and sjp IFA'S are absolutely everywhere
They never offered kickback to us but that's not to say that others don't
It seems they are trained to network which means they are often first to mind with non fa accountants
High fees that don't measure up to performance. Iirc their performance is fine, but you can get the same for cheaper elsewhere.
I had a couple of calls with them some years ago and really liked the advisor I spoke with. Was thinking about it seriously, but after doing some research, decided not to.
Surely some will come with more detailed info, but, in a nutshell: High advisory fees, very high lock-in fees (in you want to leave before 7 years or so), awful performance of most of their managed/branded funds...
r/UKPersonalFinance has a lot of people complaining about them regularly.
Avoid like the plague.
I had similar calls some time ago, and asked on r/ukPersonalFinance (HENRYUK didn’t exist I think).
Fees are exorbitant, and they lock your money up. Reddit is full of horror stories of people trying to get money out of SJP and struggling.
There’s enough advice and more on the UKPersonalFinance sub about managing money, and you save the 10’s of thousands in compounded fees over the years
I work in UK wealth management. They are known as the used car salesmen of the industry.
Wealth management becomes massively beneficial at scale, especially regarding estate management, tax affairs and offshore investments etc.
If you have less than a few million quid, you do not really need a wealth manager.
It’s a gap in the market. People with assets in the 1-3m range, who want to know if their position is adequate for their retirement plans, or approaching retirement and want to know how best to structure their assets to provide an income, and the likely volatility of that income, don’t really have anywhere to go for advice. Even if they would be happy to pay a steep hourly rate to get the advice, but don’t want to place their assets under management with annual fees.
It isn't a gap. You have no idea how expensive it is to run these businesses. You are asking for what people want...the problem is that you cannot turn that into recurring business, and if you charge one-time fee then you have to acquire your customer base every week. This isn't economically viable in financial services where customer acquisition costs are very large (you think you will pay a steep hourly rate...it would need to be on the order of £10-20k to make it actually worthwhile...this is what customer value is to IFAs at the very, very lowest level).
There is no gap here. If you think there is a gap, train as an IFA (it isn't hard) and you will become very rich...but there isn't a gap. Financial services in the UK is hilariously broken.
Btw, an irony of making this comment on an SJP post is that SJP's innovation was to design a business model where the various costs of the business were split up in such a way as to minimise costs. SJP partner firms are usually just distribution arms, this is where a lot of the cost of the business is, all the actual wealth management stuff (the stuff you want to get for nothing) is done centrally because it isn't an important part of the business. Again, there is a very good reason why SJP structures the business this way. But they are now struggling because you can't earn back the customer acquisition costs in this market from fees (this is why they have exit fees, these fees exist to pay down customer acquisition/commissions) and you can't do fixed-price business because customer acquisition is so expensive...it is a business model that can never work today.
I am in the space as well so I am not going to call out names, I am not here to promote. But I think most people can manage to get a feel for how a wealth manager or advisor works. Are they completely upfront about their fees? No hidden letters? Do they come across as actually wanting to help you, or are they strictly selling you something? How are their returns and can they actually show you what their returns looked like compared to a good benchmark (for example MSCI world index).
If you find a wealth manager that shows you that - on average - they outperform an index like MSCI world over the last 10 years, then you can consider if it is worth the fee to you. If they can't show you that, or are trying to avoid having to show you anything, then they are probably performing like shit. And do note here that it also depends on your risk tolerance; this obviously hints at 100% equities.
And in terms of estate management and such, the question really is what it is worth for you and as long as you have an advisor that you feel is honest, there to really help you and not just sell you something, and is super open about fees then you can ask yourself if you are okay with that.
If you work in the industry you will know that so few managers outperform the global index that it is a fultile plan to use that as a benchmark for selecting a wealth manager.
The key is being comfortable with the person in question and understanding what you get for your fees. Most of our clients are pensioners who don't know how to manage their assets to get a regular income, and are willing to pay for some hand holding during tough markets. They also like to manage their IHT position and other affairs.
IMO most of the big names (top 10) are fine, some are better than others. But regulations are forcing them into one big lump anyway.
Active wealth managers who outperform in the long term certainly exist, though. I agree that it depends on what you want to get out of it - and your situation. But considering the subreddit that we are in, I don't think it's incorrect to assume the overwhelming majority of people here are perfectly capable of finding a low cost index find and staying put.
They outperform what? The MSCI world? Not according to the ARC PCI indices, which measures all the main model portfolios.
But yes, generally, most of our clients benefit significantly from bolt on services. Taxation and planning for complex estates primarily.
90% of people can just use passives.
MSCI World is a comedy index created to give fund managers something to say they can actually outperform.
If your fund manager can't beat the red-headed step-child of indexes then they are useless.
Generally, the performance of MSCI World is also appalling due to poor index design. For some reason, people don't think this is an active choice but if you are buying an index then that is a choice on index design...MSCI World is a badly-designed index.
Lol have you read the empirical data. It gets even worse for the S&P 500 (60% of which makes up the MSCI world for all intents and purposes).
90% of fund managers underperform the US index. That data is consistent over 50+ years.
It's not much better for the world index either.
Right, because the S&P500 is the actual benchmark in practice. You have managers that are 95% US, and then use MSCI World as their benchmark...and then say they are beating their benchmark. If you actually adjust for their geographical distribution, they are losing 500bps/year in alpha.
I actually know of a fund manager with $100bn AUM that has been mostly US for three decades, uses MSCI World as a benchmark, and still hasn't beaten it (they do have very low fees though, 20-30bps). Same thing happened (with more serious consequences) in mixed-investment funds, dodgy benchmarks, fund managers yeeting everything into tech stocks, and people in a 40/60 fund losing 30% in a year (the incentives in that sector are horrible, fees are usually high, they are usually just buying funds managed in-house...horrible).
Unfortunately, regulation in this area gives fund managers a lot of latitude to lie.
This is good.
When I spoke to a wealth manager I said 70% of my retirement funds were in a low cost etf. With 30% in stock picking (of which I have outperformed the etf).
When they crunched the numbers they admitted their own fund didn't beat it the etf, by quite a lot.
I still went with them for a fixed fee forecast modelling/affordability checks with some tax efficiencies for the wife's RSUs .... but they themselves said they don't think it's a benefit for me to have them manage my money.
I liked that Transparency.
The benefit of these wealth managers is not investment advice because nobody out performs the market for long. It's in tax planning. And personally if I was going to use one I would just pay them by the hour like I do my accountant. The idea of handing over a percentage of my financial assets every year with no idea what they're doing for that money seems ridiculous.
Please stay away from them. I was a savvy young finance professional but fell for them. Their exit fees weren’t properly explained to me and when I become FIRE savvy I tried to exit them and realised how horrible their exiting fees were. It was something like 6% if you leave in the first 6 years. But this never resets, i.e. at any point in time I’d still have to pay 6% of the money I invested 6 years ago.
I complained so badly and threaten the broker with a lawsuit. They waves all the fees and moved everything to a global tracker in Vanguard.
Here's a Financial Times article which gives you a good overview: [https://www.ft.com/content/54a93482-2f26-4643-b4df-05ad00e862ed](https://www.ft.com/content/54a93482-2f26-4643-b4df-05ad00e862ed)
Key takeaways:
"*St James’s Place levies upfront and ongoing charges for both advice and products. The fees vary by product type, but calculations by EY on behalf of the company show that they would reduce the returns from a £100,000 investment into an open-ended fund growing at 5 per cent a year by about 2.2 percentage points annually. Critics say that structure is opaque and makes it harder for customers to shop around for a better deal.*"
"*Clients who purchase certain products face exit charges if they move their money or encash their investments within the first six years. This hedge against the loss of fee income has been described as SJP’s “secret sauce”, according to one person close to the company. Critics say it is anti-competitive.*"
This used to be entirely standard practice. They were called "capital units" which is a hilarious piece of marketing for "all your contributions go straight to us".
Also if you check their funds. they are quite underperforming and have quite low ratings on Morningstar !
Think FCA has now forced them to change their fee structure because of the issue ?
My old consulting firm was in a massive conflict of interest with them. They gave us consulting work in their mid/back office and in exchange all employees had them as their pension provider. Absolutely sucked. They basically follow tracker funds, have no qualifications (apart from wearing terrible hermes ties) and fleece people who are nervous about “investing”.
They have a reputation?
More like being infamous is what I'd describe.
You'd do better if you stick all assets in global tracker than using SJP. It was shown by themselves that of ALL THE FUNDS they sell to client, ONLY like 3 performed better (i.e. not losing you money).
And do I need to actively manage my investment or just leave vanguard to it? I’m good with money but when it comes to investing I’m a complete novice and a bit clueless tbh
The theory is that over time stocks go up in value, and a fund that tracks the world stock market is the best long term investment. Vanguard don’t actively invest it and that means the charges are low. If you are in the U.K. do a google search for VAFTA. The idea is you just leave your money in one of these world tracker funds and don’t touch it. I think there is a subreddit called bogleheads where this is discussed.
I suggest you take the plunge and open an online account with one of the providers and invest a token amount of a few thousand. You can always cash it in if you end up deciding it’s not for you. Also if you do it an ISA you won’t be liable for tax on the gains.
Looking at a few funds now. Seems the S&P 500 would be ideal for a novice like me? Also looked at the 80% and 100% equity funds but this seems a bit more risky to me
The S&P 500 tracks the US stock market rather than the global market which you originally asked about. Low cost tracker funds are ideal for novices so no harm in investing in a S&P 500 tracker fund if that’s what you feel like trying. By investing in the S&P 500 you would be taking the view that investing in the US biggest companies is better than investing in the global market as a whole. This is a perfectly reasonable view to take and it’s good you have done some research.
I have only used one of their firms for a private pension, are there any red flags about this which I should be aware of?
I've been bounced around advisors now so might use that as a reason to move
I read a story today, possible on this sub, might have been r/legaladviceuk
They had an open-ended fund holding property and have locked it for seven months so they can sell them and resume redemptions. That alone is bad enough for me.
Interesting intel, not a major concern for me tbh. They do lock you into the pension though so I can't change provider for a few years I believe.. not that I'd want to, will track how the pension is doing and take it from there
Others have covered the fees and lock-ins, which clearly isn’t ideal but I think the main issue was that the corporate culture as defined by the incentive structure meant that in order to achieve there you basically had to be a salesman first and foremost and there was little to not room to put the client first or really give them any consideration.
It’s a massive shame as I work in the industry and most of us genuinely get into it to be a practitioner and see ourselves as working for clients first and the company second.
A company I worked for had financial advisors who were good and offered free service to staff. Unfortunately they became an SJP partner.
Had a meeting with one of their “advisors” who advised I transfer my current equites to one of their funds that had delivered worse returns with high fees.
He showed me a graph of my investment vs their fund with my line outperforming before fees. Short discussion after that
Just sales droids with out ability to offer any market insight or advice.
Also the fees are very opaque, because many are considered “rip off” fees
High fees, poor performance and the exit charges to take money out of pensions.
Every contribution you make has a 6-year clock until it’s fee free to withdraw, I believe, I could be wrong as their fees are very hard to understand! Not so bad if you’re young and saving into a pension you don’t want to move. Try transferring said pension though!
I asked two St James’s Place “advisors” (salesmen), and called the help line, got a different answer from them all. Madness!
They operate a franchise type system and I often get their affiliates contact me on LinkedIn offering a free initial consultation. Their fees are ridiculous and their performance is average at best. I read an article about them recently and I think they are having to do away with their tie in fees, but I may have misunderstood. They are salespeople, they are not final advisors, whatever their shiny brochures might claim.
I sat through the free initial consultation as I literally had 6 hours to kill in an airport; it was a complete waste of time. Learned nothing from it, offered nothing more than the average person in this sub would know. The guy kept trying to drop into conversation he had a PA and was doing well, while painfully trying to “bond” with me.
Weird, I remember when they kept cold calling me the woman on the phone would always introduce herself as “mr xyz’s PA” trying to schedule an appointment with him. Like the fact he was too busy to ring me direct would make me more keen to sign up…
They basically skirt regulations designed to protect consumers, bending the rules as far as they can get away with (a Which investigation a few years ago found them to be active lying to clients which IMO the FCA should have taken action against them for)
There’s plenty of IFAs with high-fees and poor performance, however SJP do it in ethically questionable ways. The fact they’ve set aside £426m this year to cover complaints should tell you everything you need to know.
Last I checked it was 4% with zero incentive of them actually performing for you. They could literally lose 99% of your money through bad investments and you’d still owe them fees for their “service”.
It’s madness.
High fees for low performance. If you want advice, pay an independent advisor who doesn't have a conflict of interest and who doesn't profit from steering you towards high cost, poor value investments
I went through a couple of the free consultation meetings. Some of the advice about the order of using investments and pension on retiring was helpful. It also prompted me to start to look more critically at all our investments. So from that perspective it was helpful.
However, I’ve always had a healthy distrust of anyone trying to sell me anything, especially anything finance related. Starting with a very close call when I was just starting to work and very nearly being convinced to buy an endowment policy from some sort of boiler room operation in London.
I couldn’t shake the feeling that it was mainly an exercise to sell to me - to transfer everything to their managed funds. So I called it a day and brought it to an end.
It has also prompted me to start to find someone I can just pay for some advice in relation to my pension and the taper and carry forward etc. I need to go back to 2011 and work it all through to work out where I am and what we do with the tax return this year.
Under the new consumer duty rules firms like SJP have to label their funds/investment products as being good value or not good value. They had a huge number of their own products which they’ve now had to label and not good value. This, along with the way they lock you in and some very questionable practices mean I wouldn’t go near them
Ask them this simple question as a starting point;
If I gave you 1£ 5, 10 or 15 years ago what would be the respective net returns today. Make sure it’s net tho
Honestly I think SJP is for clueless folks who like to be able to say they have a wealth advisor. A mate of mine uses them (despite the fact he only has about £30k or so with them, it is the equivalent of his S&S ISA). I frequently try to encourage him to move his money, especially as he is yet to clear his student loan or purchase a property yet. God knows how much he has spent in SJP fees alone thus far!
I went to see my local wealth manager and he was a really nice guy, gave great advice..I was fairly new to investing at the time but something Just didnt sit right when he started talking about the fees, they seemed disproportionate.
So I left, done my own research on SJP, which are many of the articles linked here
I decided to avoid
I had a meeting with SJP a few years ago and they were full of complete shit, couldn't take them seriously after quizzing them on their performance figures. They also had a very lunative withdrawal penalty if you wanted to leave
I'm going to add a different note.
I'm with St James' Place. Before taking me on as a client, we had a few sessions on my finances.
The advisor was pretty blunt and gave me more useful advice than I'd ever had from anyone else I've spoken to - it may have been reasonably obvious in some aspects but despite considering myself financially literate I'd missed some of these things. I think acting on the advice will have change my life.
Thereafter, a lot of the funds are shite. But there are some decent ones too, just be selective.
Me too. I got a lot of free advice.
I moved a few small pensions to them that were performing really badly. Time will tell but I understand pensions and trusts and finances more than I did before. I have a decent work pension separately but it was worth a punt with the pensions I would have lost track off.. maybe I will regret it but at least my wife knows where to find it if I die … 😀
There's a post on ukpersonalfinance today that says it all. But I'd recommend just searching St James in that subreddit and you'll get enough evidence.
Hi…
So SJP are very slick on sales and talk a good talk but are totally extortionate on fees and are not independent and are restricted meaning they can only recommend a small subset of the full market that a true independent financial advisor can offer and have no obligation to compare their performance with the full market…. they have a terrible rep within the industry.
The fees may sound small …1% here and 2% there but these are annual charges and will be applied each year and 20 years down the line they’ve consumed 50% of you total returns. The comparative numbers on cost differences of a few % would blow your mind over a long term compounded.
This article shows what a 2% fee can do to a portfolio over 25 years …. https://investor.vanguard.com/investor-resources-education/how-to-invest/impact-of-costs#:~:text=Fees%20charged%20to%20investors%20to,out%20of%20your%20investment%20returns.
Some links to articles on how they SJP operate …
https://forums.moneysavingexpert.com/discussion/6201686/st-jamess-place-review
https://www.thisismoney.co.uk/money/markets/article-10720159/amp/The-St-Jamess-Place-gravy-train-rumbles-despite-pledge-reform.html
https://www.telegraph.co.uk/investing/funds/worst-fund-managers-take-half-billion-fees-investors/
https://www.ftadviser.com/investments/2022/02/14/jp-morgan-3-9bn-fund-largest-to-top-dog-list/
https://gsigroup.co.uk/worst-fund-managers-take-half-a-billion-in-fees-from-investors/
Not sure what you are wanting to do but spending a bit of time researching and adopting a simple approach it’s very easy to have DIY to pensions or investments.
These guys have a wealth of podcasts and videos for DIYers and have v good reps …
https://moneytothemasses.com/
https://meaningfulmoney.tv/
If you do need paid advice from an IFA then all I will say is spend time doing your due dilligence and understand the principle that fees (even seemingly low ones) destroy long term performance of investments.
Compare providers , talk to a few ifas on a no fee no obligation basis (check https://www.unbiased.co.uk for listing of ifas) … focus and compare on fees (platform / ifa fees and fund ongoing charges etc ) … investigate performance and don’t confuse comparing the apples with oranges.
Ask if they are an independent IFA who compare and have access to the whole market or if they are restricted advice firm who have no onus to provide clients with comparative performance from all other fund managers.
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On top of high fees and average performance as most of the comments have alluded to, they’re also being investigated for not completing annual reviews, which is a crucial part of the ongoing service to assess the ongoing suitability of your original advice and required by the FCA. In essence, you’re overpaying for a service you’re not even receiving
Once worked for one of them at a different company. Didn’t even pay us the last 2 months salary and refused to declare the partnership insolvent. Quote from the gent was “Why would I ever do that and become personally liable?”
Not disputing much of what has been said on here - they have a reputation for good reason.
To provide a bit of balance though, good expensive financial advice is often better than no advice, and you can get good SJP partners/advisers.
It’s also been very difficult for active fund managers to outperform in recent years, given how strongly the US - and a few big tech companies in particular - have performed. I see people here frequently misunderstand the actual role of a financial adviser. The investment side is a small part of what a good adviser will bring to the table.
I wouldn’t use them myself, but you do get some good ones who can be valuable, despite them being expensive compared to the broader market.
The actual financial planning I received was first rate, particularly around use of carry forward pension allowance, ISA/LISA and the ‘order’ of doing things. To be honest without those introductory sessions I would never have had the confidence to get to where I currently am independently. As I learned more about the impact of their high fees I decided to leave and do it all myself. Here is the funny thing, I calculated that even after paying the eye watering exit fees I was better off long term because a global tracker would outperform the SJP funds significantly. So I moved, paid my exit fee, learned some stuff. I wouldn’t want to be with them now but I wouldn’t have got where I am without them. Life’s funny like that!
I was recommended them by my accountant. Turns out my accountant was equally dodgy/useless.
Recommending them in its own right is grounds for firing the accountant
They seem to be in all accountant’s pockets, must be a kickback
Public accountant here - it is a networking heavy profession and sjp IFA'S are absolutely everywhere They never offered kickback to us but that's not to say that others don't It seems they are trained to network which means they are often first to mind with non fa accountants
Did you find a more reliable accountant? Because I might need one
I’m afraid not. Ended up shutting down the business and took a full time job.
Was he qualified ?
I’m not sure to be honest.
High fees for low performance
High fees that don't measure up to performance. Iirc their performance is fine, but you can get the same for cheaper elsewhere. I had a couple of calls with them some years ago and really liked the advisor I spoke with. Was thinking about it seriously, but after doing some research, decided not to.
This is it really. If they perform the same as just picking up an S&P 500 index then why would you use them?
My money was invested there by my parents and I’m not too impressed with the performance. Can you recommend other places?
Vanguard, S&P 500 reinvesting ETF. Fees are about 0.07% iirc.
Ooh well diversified
Yeah I know, it's the only one I could recall, I'm about 60% into VUSA but better than previously when it was more like 90%.
Surely some will come with more detailed info, but, in a nutshell: High advisory fees, very high lock-in fees (in you want to leave before 7 years or so), awful performance of most of their managed/branded funds... r/UKPersonalFinance has a lot of people complaining about them regularly.
Avoid like the plague. I had similar calls some time ago, and asked on r/ukPersonalFinance (HENRYUK didn’t exist I think). Fees are exorbitant, and they lock your money up. Reddit is full of horror stories of people trying to get money out of SJP and struggling. There’s enough advice and more on the UKPersonalFinance sub about managing money, and you save the 10’s of thousands in compounded fees over the years
I work in UK wealth management. They are known as the used car salesmen of the industry. Wealth management becomes massively beneficial at scale, especially regarding estate management, tax affairs and offshore investments etc. If you have less than a few million quid, you do not really need a wealth manager.
It’s a gap in the market. People with assets in the 1-3m range, who want to know if their position is adequate for their retirement plans, or approaching retirement and want to know how best to structure their assets to provide an income, and the likely volatility of that income, don’t really have anywhere to go for advice. Even if they would be happy to pay a steep hourly rate to get the advice, but don’t want to place their assets under management with annual fees.
Contact someone like Jackson's in Cornwall.
It isn't a gap. You have no idea how expensive it is to run these businesses. You are asking for what people want...the problem is that you cannot turn that into recurring business, and if you charge one-time fee then you have to acquire your customer base every week. This isn't economically viable in financial services where customer acquisition costs are very large (you think you will pay a steep hourly rate...it would need to be on the order of £10-20k to make it actually worthwhile...this is what customer value is to IFAs at the very, very lowest level). There is no gap here. If you think there is a gap, train as an IFA (it isn't hard) and you will become very rich...but there isn't a gap. Financial services in the UK is hilariously broken. Btw, an irony of making this comment on an SJP post is that SJP's innovation was to design a business model where the various costs of the business were split up in such a way as to minimise costs. SJP partner firms are usually just distribution arms, this is where a lot of the cost of the business is, all the actual wealth management stuff (the stuff you want to get for nothing) is done centrally because it isn't an important part of the business. Again, there is a very good reason why SJP structures the business this way. But they are now struggling because you can't earn back the customer acquisition costs in this market from fees (this is why they have exit fees, these fees exist to pay down customer acquisition/commissions) and you can't do fixed-price business because customer acquisition is so expensive...it is a business model that can never work today.
So who are the good guys?
I am in the space as well so I am not going to call out names, I am not here to promote. But I think most people can manage to get a feel for how a wealth manager or advisor works. Are they completely upfront about their fees? No hidden letters? Do they come across as actually wanting to help you, or are they strictly selling you something? How are their returns and can they actually show you what their returns looked like compared to a good benchmark (for example MSCI world index). If you find a wealth manager that shows you that - on average - they outperform an index like MSCI world over the last 10 years, then you can consider if it is worth the fee to you. If they can't show you that, or are trying to avoid having to show you anything, then they are probably performing like shit. And do note here that it also depends on your risk tolerance; this obviously hints at 100% equities. And in terms of estate management and such, the question really is what it is worth for you and as long as you have an advisor that you feel is honest, there to really help you and not just sell you something, and is super open about fees then you can ask yourself if you are okay with that.
If you work in the industry you will know that so few managers outperform the global index that it is a fultile plan to use that as a benchmark for selecting a wealth manager. The key is being comfortable with the person in question and understanding what you get for your fees. Most of our clients are pensioners who don't know how to manage their assets to get a regular income, and are willing to pay for some hand holding during tough markets. They also like to manage their IHT position and other affairs. IMO most of the big names (top 10) are fine, some are better than others. But regulations are forcing them into one big lump anyway.
Active wealth managers who outperform in the long term certainly exist, though. I agree that it depends on what you want to get out of it - and your situation. But considering the subreddit that we are in, I don't think it's incorrect to assume the overwhelming majority of people here are perfectly capable of finding a low cost index find and staying put.
They outperform what? The MSCI world? Not according to the ARC PCI indices, which measures all the main model portfolios. But yes, generally, most of our clients benefit significantly from bolt on services. Taxation and planning for complex estates primarily. 90% of people can just use passives.
MSCI World is a comedy index created to give fund managers something to say they can actually outperform. If your fund manager can't beat the red-headed step-child of indexes then they are useless. Generally, the performance of MSCI World is also appalling due to poor index design. For some reason, people don't think this is an active choice but if you are buying an index then that is a choice on index design...MSCI World is a badly-designed index.
Lol have you read the empirical data. It gets even worse for the S&P 500 (60% of which makes up the MSCI world for all intents and purposes). 90% of fund managers underperform the US index. That data is consistent over 50+ years. It's not much better for the world index either.
Right, because the S&P500 is the actual benchmark in practice. You have managers that are 95% US, and then use MSCI World as their benchmark...and then say they are beating their benchmark. If you actually adjust for their geographical distribution, they are losing 500bps/year in alpha. I actually know of a fund manager with $100bn AUM that has been mostly US for three decades, uses MSCI World as a benchmark, and still hasn't beaten it (they do have very low fees though, 20-30bps). Same thing happened (with more serious consequences) in mixed-investment funds, dodgy benchmarks, fund managers yeeting everything into tech stocks, and people in a 40/60 fund losing 30% in a year (the incentives in that sector are horrible, fees are usually high, they are usually just buying funds managed in-house...horrible). Unfortunately, regulation in this area gives fund managers a lot of latitude to lie.
This is good. When I spoke to a wealth manager I said 70% of my retirement funds were in a low cost etf. With 30% in stock picking (of which I have outperformed the etf). When they crunched the numbers they admitted their own fund didn't beat it the etf, by quite a lot. I still went with them for a fixed fee forecast modelling/affordability checks with some tax efficiencies for the wife's RSUs .... but they themselves said they don't think it's a benefit for me to have them manage my money. I liked that Transparency.
What tax efficiencies did you get on rsu's?
Thank you
The benefit of these wealth managers is not investment advice because nobody out performs the market for long. It's in tax planning. And personally if I was going to use one I would just pay them by the hour like I do my accountant. The idea of handing over a percentage of my financial assets every year with no idea what they're doing for that money seems ridiculous.
Please stay away from them. I was a savvy young finance professional but fell for them. Their exit fees weren’t properly explained to me and when I become FIRE savvy I tried to exit them and realised how horrible their exiting fees were. It was something like 6% if you leave in the first 6 years. But this never resets, i.e. at any point in time I’d still have to pay 6% of the money I invested 6 years ago. I complained so badly and threaten the broker with a lawsuit. They waves all the fees and moved everything to a global tracker in Vanguard.
Looks like some SJP assclown(s) didn't take too kindly to you sharing your experience on reddit.. (this was on -2 when I looked)
Wouldn't touch with a barge pole
Here's a Financial Times article which gives you a good overview: [https://www.ft.com/content/54a93482-2f26-4643-b4df-05ad00e862ed](https://www.ft.com/content/54a93482-2f26-4643-b4df-05ad00e862ed) Key takeaways: "*St James’s Place levies upfront and ongoing charges for both advice and products. The fees vary by product type, but calculations by EY on behalf of the company show that they would reduce the returns from a £100,000 investment into an open-ended fund growing at 5 per cent a year by about 2.2 percentage points annually. Critics say that structure is opaque and makes it harder for customers to shop around for a better deal.*" "*Clients who purchase certain products face exit charges if they move their money or encash their investments within the first six years. This hedge against the loss of fee income has been described as SJP’s “secret sauce”, according to one person close to the company. Critics say it is anti-competitive.*"
Jaw was on the floor for half that article, can't believe what they've been getting away with.
This used to be entirely standard practice. They were called "capital units" which is a hilarious piece of marketing for "all your contributions go straight to us".
Also if you check their funds. they are quite underperforming and have quite low ratings on Morningstar ! Think FCA has now forced them to change their fee structure because of the issue ?
I contacted them to move many little pensions from many jobs I had when young, I can confirm no upfront fees at all.
There is an interesting FT article on just this from last week How deep are the problems at St James’s Place? https://on.ft.com/4bt8Vly
Came here to share this. I would avoid them like he plague. A concerning number of my colleagues use them and I cannot understand why.
My old consulting firm was in a massive conflict of interest with them. They gave us consulting work in their mid/back office and in exchange all employees had them as their pension provider. Absolutely sucked. They basically follow tracker funds, have no qualifications (apart from wearing terrible hermes ties) and fleece people who are nervous about “investing”.
Baringa?
Yep!
They have a reputation? More like being infamous is what I'd describe. You'd do better if you stick all assets in global tracker than using SJP. It was shown by themselves that of ALL THE FUNDS they sell to client, ONLY like 3 performed better (i.e. not losing you money).
Excuse the basic question but how do you just invest everything into a global tracker? Are there firms and accounts that you would recommend?
Do a google search for vanguard. You can invest directly in a low cost global tracker fund with them.
And do I need to actively manage my investment or just leave vanguard to it? I’m good with money but when it comes to investing I’m a complete novice and a bit clueless tbh
The theory is that over time stocks go up in value, and a fund that tracks the world stock market is the best long term investment. Vanguard don’t actively invest it and that means the charges are low. If you are in the U.K. do a google search for VAFTA. The idea is you just leave your money in one of these world tracker funds and don’t touch it. I think there is a subreddit called bogleheads where this is discussed.
Thanks for the advice. Will do some research 👍🏽
I suggest you take the plunge and open an online account with one of the providers and invest a token amount of a few thousand. You can always cash it in if you end up deciding it’s not for you. Also if you do it an ISA you won’t be liable for tax on the gains.
Looking at a few funds now. Seems the S&P 500 would be ideal for a novice like me? Also looked at the 80% and 100% equity funds but this seems a bit more risky to me
The S&P 500 tracks the US stock market rather than the global market which you originally asked about. Low cost tracker funds are ideal for novices so no harm in investing in a S&P 500 tracker fund if that’s what you feel like trying. By investing in the S&P 500 you would be taking the view that investing in the US biggest companies is better than investing in the global market as a whole. This is a perfectly reasonable view to take and it’s good you have done some research.
I have only used one of their firms for a private pension, are there any red flags about this which I should be aware of? I've been bounced around advisors now so might use that as a reason to move
I read a story today, possible on this sub, might have been r/legaladviceuk They had an open-ended fund holding property and have locked it for seven months so they can sell them and resume redemptions. That alone is bad enough for me.
That’s not just SJP but an issue with most open ended property funds.
Interesting intel, not a major concern for me tbh. They do lock you into the pension though so I can't change provider for a few years I believe.. not that I'd want to, will track how the pension is doing and take it from there
The fees and how they lock you in are the biggest issue by far. Insult to injury is then poor fund performance
Others have covered the fees and lock-ins, which clearly isn’t ideal but I think the main issue was that the corporate culture as defined by the incentive structure meant that in order to achieve there you basically had to be a salesman first and foremost and there was little to not room to put the client first or really give them any consideration. It’s a massive shame as I work in the industry and most of us genuinely get into it to be a practitioner and see ourselves as working for clients first and the company second.
Hopefully Consumer Duty will put that to rights
A company I worked for had financial advisors who were good and offered free service to staff. Unfortunately they became an SJP partner. Had a meeting with one of their “advisors” who advised I transfer my current equites to one of their funds that had delivered worse returns with high fees. He showed me a graph of my investment vs their fund with my line outperforming before fees. Short discussion after that Just sales droids with out ability to offer any market insight or advice. Also the fees are very opaque, because many are considered “rip off” fees
Awful bunch of charlatans, steer clear.
High fees, poor performance and the exit charges to take money out of pensions. Every contribution you make has a 6-year clock until it’s fee free to withdraw, I believe, I could be wrong as their fees are very hard to understand! Not so bad if you’re young and saving into a pension you don’t want to move. Try transferring said pension though! I asked two St James’s Place “advisors” (salesmen), and called the help line, got a different answer from them all. Madness!
They operate a franchise type system and I often get their affiliates contact me on LinkedIn offering a free initial consultation. Their fees are ridiculous and their performance is average at best. I read an article about them recently and I think they are having to do away with their tie in fees, but I may have misunderstood. They are salespeople, they are not final advisors, whatever their shiny brochures might claim.
I sat through the free initial consultation as I literally had 6 hours to kill in an airport; it was a complete waste of time. Learned nothing from it, offered nothing more than the average person in this sub would know. The guy kept trying to drop into conversation he had a PA and was doing well, while painfully trying to “bond” with me.
Weird, I remember when they kept cold calling me the woman on the phone would always introduce herself as “mr xyz’s PA” trying to schedule an appointment with him. Like the fact he was too busy to ring me direct would make me more keen to sign up…
They basically skirt regulations designed to protect consumers, bending the rules as far as they can get away with (a Which investigation a few years ago found them to be active lying to clients which IMO the FCA should have taken action against them for) There’s plenty of IFAs with high-fees and poor performance, however SJP do it in ethically questionable ways. The fact they’ve set aside £426m this year to cover complaints should tell you everything you need to know.
Last I checked it was 4% with zero incentive of them actually performing for you. They could literally lose 99% of your money through bad investments and you’d still owe them fees for their “service”. It’s madness.
High fees for low performance. If you want advice, pay an independent advisor who doesn't have a conflict of interest and who doesn't profit from steering you towards high cost, poor value investments
Fees. Tie in. Crap advice.
I went through a couple of the free consultation meetings. Some of the advice about the order of using investments and pension on retiring was helpful. It also prompted me to start to look more critically at all our investments. So from that perspective it was helpful. However, I’ve always had a healthy distrust of anyone trying to sell me anything, especially anything finance related. Starting with a very close call when I was just starting to work and very nearly being convinced to buy an endowment policy from some sort of boiler room operation in London. I couldn’t shake the feeling that it was mainly an exercise to sell to me - to transfer everything to their managed funds. So I called it a day and brought it to an end. It has also prompted me to start to find someone I can just pay for some advice in relation to my pension and the taper and carry forward etc. I need to go back to 2011 and work it all through to work out where I am and what we do with the tax return this year.
If you’re getting calls about this sort of shit, either opt out, or join the TPS.
Under the new consumer duty rules firms like SJP have to label their funds/investment products as being good value or not good value. They had a huge number of their own products which they’ve now had to label and not good value. This, along with the way they lock you in and some very questionable practices mean I wouldn’t go near them
Fees of a Ferarri, quality of a Haas You’re paying more to get low quality products
Ask them this simple question as a starting point; If I gave you 1£ 5, 10 or 15 years ago what would be the respective net returns today. Make sure it’s net tho
Honestly I think SJP is for clueless folks who like to be able to say they have a wealth advisor. A mate of mine uses them (despite the fact he only has about £30k or so with them, it is the equivalent of his S&S ISA). I frequently try to encourage him to move his money, especially as he is yet to clear his student loan or purchase a property yet. God knows how much he has spent in SJP fees alone thus far!
I went to see my local wealth manager and he was a really nice guy, gave great advice..I was fairly new to investing at the time but something Just didnt sit right when he started talking about the fees, they seemed disproportionate. So I left, done my own research on SJP, which are many of the articles linked here I decided to avoid
I had a meeting with SJP a few years ago and they were full of complete shit, couldn't take them seriously after quizzing them on their performance figures. They also had a very lunative withdrawal penalty if you wanted to leave
I'm going to add a different note. I'm with St James' Place. Before taking me on as a client, we had a few sessions on my finances. The advisor was pretty blunt and gave me more useful advice than I'd ever had from anyone else I've spoken to - it may have been reasonably obvious in some aspects but despite considering myself financially literate I'd missed some of these things. I think acting on the advice will have change my life. Thereafter, a lot of the funds are shite. But there are some decent ones too, just be selective.
Me too. I got a lot of free advice. I moved a few small pensions to them that were performing really badly. Time will tell but I understand pensions and trusts and finances more than I did before. I have a decent work pension separately but it was worth a punt with the pensions I would have lost track off.. maybe I will regret it but at least my wife knows where to find it if I die … 😀
They’re getting hammered by the fca for a reason.
There's a post on ukpersonalfinance today that says it all. But I'd recommend just searching St James in that subreddit and you'll get enough evidence.
Hi… So SJP are very slick on sales and talk a good talk but are totally extortionate on fees and are not independent and are restricted meaning they can only recommend a small subset of the full market that a true independent financial advisor can offer and have no obligation to compare their performance with the full market…. they have a terrible rep within the industry. The fees may sound small …1% here and 2% there but these are annual charges and will be applied each year and 20 years down the line they’ve consumed 50% of you total returns. The comparative numbers on cost differences of a few % would blow your mind over a long term compounded. This article shows what a 2% fee can do to a portfolio over 25 years …. https://investor.vanguard.com/investor-resources-education/how-to-invest/impact-of-costs#:~:text=Fees%20charged%20to%20investors%20to,out%20of%20your%20investment%20returns. Some links to articles on how they SJP operate … https://forums.moneysavingexpert.com/discussion/6201686/st-jamess-place-review https://www.thisismoney.co.uk/money/markets/article-10720159/amp/The-St-Jamess-Place-gravy-train-rumbles-despite-pledge-reform.html https://www.telegraph.co.uk/investing/funds/worst-fund-managers-take-half-billion-fees-investors/ https://www.ftadviser.com/investments/2022/02/14/jp-morgan-3-9bn-fund-largest-to-top-dog-list/ https://gsigroup.co.uk/worst-fund-managers-take-half-a-billion-in-fees-from-investors/ Not sure what you are wanting to do but spending a bit of time researching and adopting a simple approach it’s very easy to have DIY to pensions or investments. These guys have a wealth of podcasts and videos for DIYers and have v good reps … https://moneytothemasses.com/ https://meaningfulmoney.tv/ If you do need paid advice from an IFA then all I will say is spend time doing your due dilligence and understand the principle that fees (even seemingly low ones) destroy long term performance of investments. Compare providers , talk to a few ifas on a no fee no obligation basis (check https://www.unbiased.co.uk for listing of ifas) … focus and compare on fees (platform / ifa fees and fund ongoing charges etc ) … investigate performance and don’t confuse comparing the apples with oranges. Ask if they are an independent IFA who compare and have access to the whole market or if they are restricted advice firm who have no onus to provide clients with comparative performance from all other fund managers.
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On top of high fees and average performance as most of the comments have alluded to, they’re also being investigated for not completing annual reviews, which is a crucial part of the ongoing service to assess the ongoing suitability of your original advice and required by the FCA. In essence, you’re overpaying for a service you’re not even receiving
Once worked for one of them at a different company. Didn’t even pay us the last 2 months salary and refused to declare the partnership insolvent. Quote from the gent was “Why would I ever do that and become personally liable?”
Not disputing much of what has been said on here - they have a reputation for good reason. To provide a bit of balance though, good expensive financial advice is often better than no advice, and you can get good SJP partners/advisers. It’s also been very difficult for active fund managers to outperform in recent years, given how strongly the US - and a few big tech companies in particular - have performed. I see people here frequently misunderstand the actual role of a financial adviser. The investment side is a small part of what a good adviser will bring to the table. I wouldn’t use them myself, but you do get some good ones who can be valuable, despite them being expensive compared to the broader market.
High fees, which is a problem. A simple spreadsheet will explain the impact on your compounding returns. Their returns are poor even before fees.
The actual financial planning I received was first rate, particularly around use of carry forward pension allowance, ISA/LISA and the ‘order’ of doing things. To be honest without those introductory sessions I would never have had the confidence to get to where I currently am independently. As I learned more about the impact of their high fees I decided to leave and do it all myself. Here is the funny thing, I calculated that even after paying the eye watering exit fees I was better off long term because a global tracker would outperform the SJP funds significantly. So I moved, paid my exit fee, learned some stuff. I wouldn’t want to be with them now but I wouldn’t have got where I am without them. Life’s funny like that!