St. James's Place Share Discussion Threads

[muffster] 16/4/2024 13:18:02

Dex has it again.

[jgoldby] 16/4/2024 10:55:29

I don’t think clients can be expected to take responsibility for charges when there is sufficient evidence that Saint James‘s place advisers managers and even board members didn’t understand the charges

[tim 3] 16/4/2024 09:44:59

I think customers need to take some responsibility for understanding the charges.If you're not happy or don't understand it don't proceed.The charges were made very clear to me but not how they were implemented.

[dexdringle] 16/4/2024 09:27:43

JGoldby:

1. The additional cost isn't 0.6% per year. It's roughly half that. Simply check out the ongoing total fee difference between a pension (with no upfront fees) and and ISA (with upfront fees). The charge differential is in the Product Fee. The standard Product Fee is 1% and this includes the 'no upfront fee' loading. The Product Fee for an ISA is something like 0.7% or maybe even 0.6% with no loading to offset zero initial fee charged.

2. The charges from year 7 onwards are the same as for years 1 to 6. The client can move away at the end of year 6 with no penalties if they have a problem with that.

3. As an SJP adviser you know you could have waived most of the initial fees if you wanted to - and your client would have got a lower ongoing fee rate from day one. Then you don't have to worry about "year 7 onwards". Bottom line, you can't have your upfront fee from thin air without the client paying for it one way or another.

4. How do you think SJP should have organised their zero fee upfront model ? How would that even be possible without an overall fee loading and an exit fee to stop people immediately moving away after SJP had, say, done all the hard work on a multi pension consolidation/ DB transfer but hadn't been paid ?

5. Initial fees are going to have to be charged somewhere in the mix. Either up front or ongoing.

6. SJP field management are overpaid fly boy monkeys. There was no point in you trying to get sense out of them. You needed to talk to the backroom tech geeks.

7. You still haven't detailed the specifics of your gripes around the 'buyout' you decided, of your own volition, to do....

[the millipede] 16/4/2024 09:20:24

“Yes but SJP ‘guarantees217; the suitability of the advice given by its so-called partners.”

Thank you Jak, for correcting my error.

[the millipede] 16/4/2024 07:55:47

Without seeing the suitability report it is hard to know.

But if the investor planned to live abroad later in life, in a low tax jurisdiction, this investment could have been quite a good piece of tax planning. He could take tax deferred income now - up to 5% a year for 20 years - then pay all the income tax later based on wherever he was living. (Eg Bahamas = 0%, Barbados 0%, Jersey 20% etc).

It should be possible to structure it so investment and advice fees pale into insignificance against the tax saved. Whether that is what happened is another story!

I also would hope, given the very particular circumstances in which this bond might be advantageous, that there is some detailed documentation about why it was ever bought.

[muffster] 16/4/2024 07:12:45

Shouldn't he then go after his car leasing company, as he will be paying an extra charge, whilst never having to pay an initial fee for the car.Either an initial fee, thereby reducing your invested capital or an elevated ongoing fee, with 100% invested

[jgoldby] 16/4/2024 01:25:13

So the football story is interesting, the player may have paid standard fees of 6% deferred over the first 6 years with no change in fees in year 7. He may have paid more as the bond might have been off shore or even a specialist structure.

The fee will have been paid to SJP and he’s claiming against the wrong people especially as SJP provide the partners PI cover.

To get to £750,000 he’s likely to be claiming for the impact of the fees in terms of loss of growth, potentially he’s also claiming for the Tax lock which makes bonds very difficult to move especially if a trust structure was used.

I met with a chap called Frank Gorrie in September 2023 to discuss my concerns about over charging in year 7 onwards and considering he was the chief sales manager for the north of England all he could manage was to produce a leaflet and not engage in any way with the concern.

Knowing the way St James Place pitch the fees it’s easy to see how the client could have confused “we don’t take anything from your investment so it all gets invested” with “we don’t charge an initial fee”. If SJP said you will pay 0.6% per year more for the life of your investment as a result of the initial advice they might have a leg to stand on but that’s not something SJP advisers have demonstrated an understanding of and I stopped selling when I realised the situation.

[muffster] 15/4/2024 15:17:02

Dex you are the best contributor on here

[dexdringle] 15/4/2024 15:12:47

Just because a bloke is as thick as a haggis, and doesn't understand what he has bought, doesn't make it unsuitable advice.

[jakleeds] 15/4/2024 13:50:55

Yes but SJP ‘guarantees217; the suitability of the advice given by its so-called partners.

[the millipede] 15/4/2024 13:25:23

SJP won’t need to settle and are liable only for the asset management fees.

The situation for the adviser is likely different but his/her problems are a separate matter for that particular adviser partership, (which is not owned by SJP).

SJP might even have a claim against the adviser for any fees they refund.

[the millipede] 12/4/2024 16:44:40

It is weird to buy an investment bond without fully understanding what and why you are buying.

They have odd features - gains are taxed as income, so potentially at 45% rather than lower CGT rates. But you can withdraw up to 5% a year and defer the tax till you cash in, by which time your tax status might be different (eg after your football career is over).

Anyway will be interesting to follow this story and see what happens. A lot will likely depend on how good or bad the adviser’s file keeping is. Fees can certainly add up over 50 years and I agree advisers overall probably need to do more to justify recurring advice fees. (The recurring investment management fees are another matter of course).

[dexdringle] 12/4/2024 09:56:59

'Failure to ACCURATELY disclose fees'. They told him it would be 1.75% but it was actually 1.79% 🤣

[jakleeds] 12/4/2024 09:09:09

Ex-Man Utd footballer sues his former SJP adviser over £750k unclear fees
Chris Smalling is suing Klipp Wealth Management, a representative of SJP, for £750,000 after a failure to accurately disclose fees.
BY
JULIAN BOVILL
Ex-Man Utd footballer sues his former SJP adviser over £750k
Ex-Manchester United and England footballer Chris Smalling is suing his former financial adviser, with his lawyers alleging that the St James’s Place (SJP) partner the player used did not fully disclose the charges he would be paying.

Smalling, who currently plays for Italian side Roma, is seeking more than £750,000 in damages from London-based Klipp Wealth Management (KWM). His legal team claims that the defender has paid this much in fees over five years on investment bonds he made through KWM.

They also argue that Smalling was not made aware of the difficulties in exiting the product, and that the bond wrappers he was recommended were unsuitable for the player’s needs, since the total charge for the investments over their expected 50-year lifespan could have amounted to £97.9m, or nearly £2m per year. This fee figure includes investment growth and substantial contributions to the bond over 50 years.

[dexdringle] 11/4/2024 12:14:22

The company is currently in 'chastened' mode and seemingly embarrassed to start singing about the positives. This has to change.....

[the millipede] 11/4/2024 10:46:05

Moreover, default rate will likely remain low since advisers are tied to SJP. Their livelihood goes up in smoke if they fail to pay the loan back.

Adviser numbers are increasing and, more importantly, SJP reported £5.1bn capital net inflow last year while most asset managers saw net outflows.

Can’t help but notice the complaint rate/ refund of charges is not having a meaningful impact on the company’s cash position. The provision is likely overstated IMO.

[dexdringle] 11/4/2024 09:30:55

They do keep trying to spin this as a 'scary' story. SJP partners owe £900 million. Wooohoooo.

It isn't. The option (not obligation) for Partners to borrow money to buy clients from retiring Partners is brilliant. A proper exit strategy is a serious attraction to advisers joining SJP. And the chance to buy a ready packaged block of clients is also attractive (otherwise no one would do it).

How else are retiring Partners expected to exit ? When an IFA sells his client book, where does the buyer get the money from ?