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Exclusive: SJP chief reveals all on charges, FCA and the future of advice

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St James’s Place chief executive David Bellamy has sought to silence the company’s critics following a wave of negative publicity as he steps down after over 10 years at the helm.

In a rare and exclusive interview, Bellamy speaks frankly about SJP’s charging structure, the mechanics of the exit charge, and the firm’s relationship with the FCA.

He reflects on the changes he has seen within financial services over the 25 years SJP has been operating, and sets out his thinking on why the future looks bright for the advice market, as well as what lies ahead for the SJP business.

A brief history lesson

SJP began life in 1992 as a very different organisation to the one advisers know today. As J Rothschild Assurance, it was a life company selling products such as critical illness, income protection and personal retirement plans. In the years that followed it built up a direct salesforce, before changing its name to SJP and moving into the wealth management sector.

Since that move in 2000, funds under management have gone from £4.5bn to £75bn, overseen by a total of 69 fund managers. The number of advisers has gone from 1,000 sole traders from life company backgrounds to 3,415 advisers across 2,378 partner firms, who in turn employ a further 6,000 staff between them. It has a total of 550,000 clients across 300,000 households, and clients typically have individual assets of between £50,000 and £5m.

Over the last few years SJP has broadened its proposition further. It acquired ex-pat advice firm the Henley Group in 2014, which expanded the firm’s reach to Shanghai, Singapore and Hong Kong. This was followed by a £34m deal to buy stockbroker and discretionary fund manager Rowan Dartington, and last year’s acquisition of technical support services firm Technical Connection.

But as SJP’s profile has grown, so has the scrutiny of its business model, both among other advice firms and the national press.

‘We do not have exit charges’

In recent weeks SJP has attracted criticism from the Sunday Times, notably around the firm’s charging structure and specifically on the level of exit charges applied. SJP operates an exit charge of up to 6 per cent, which reduces by 1 per cent a year over the first six years. Money Marketing has previously reported how this charge sits outside of the FCA cap on early exit charges, which takes effect on 31 March and is set at 1 per cent.

Bellamy is keen to differentiate the SJP charging structure from the exit charges applied to legacy pension products and based on a client’s stated retirement age. He also objects to the terminology.

“We do not have exit charges. We took them out of our contracts two years ago, and while it cost us a lot of money we decided it was inappropriate and not right for today. We have a charging structure that effectively gives people the option to come in and invest in a pension or a bond, and they understand the charging structure is such that it funds the advice. It’s almost like a deferred advice charge. It’s structured on the basis of if you stay with us for six years, you will simply have paid your 1.5 per cent annual management charge.”

Bellamy says the company is not expecting clients to withdraw their investments within the first six years, and points out the average investment term for bonds is 14 years.

“It’s not an exit penalty, we call it very specifically an early withdrawal charge because it’s a means of funding the advice charge. This is something we think works for clients. Our shareholders effectively bear the brunt of that charging structure because if you look through our accounts, there is a period in which funds invested with us do not generate a return for shareholders for six years. That’s largely because the annual management charge is being used to fund the advice charges. I accept that it’s complicated, but it’s also innovative.”

One common criticism levelled at SJP is clients are overpaying for advice, and do so unknowingly. In response, Bellamy cites the firm’s annual client questionnaire which found that 82 of respondents rated value for money as good or excellent, and 97 per cent who say they would recommend SJP to others. SJP has also recently published its charges online in response to claims the firm was not transparent on its fees.

“Attracting £11.3bn in new assets last year is evidence of us doing something right. Our clients don’t complain about our charges.

“When people come to us and say either your charges aren’t clear, or they’re expensive, I don’t believe that’s the case. We offer value, otherwise clients wouldn’t stay with us. There is no point in this business doing what it does if it cannot attract clients, serve them well and keep them. That is what makes us a sustainable business.”

Bellamy says the attacks over SJP’s charges are at odds with other adviser charging practices in the market, particularly the increase in advice charges post-RDR.

“It is a bit rich. Our fee structures have been consistent throughout this period, and yet the adviser community has moved from 50 basis points for ongoing advice to 75 to 100bps. Some of the ways they’ve done that is by moving people from active funds to passive funds. That’s not good behaviour, but it’s pretty common. It is ironic that those people look into this organisation and cry foul.”

Away from charges, SJP has also come under fire for its incentive structure for partners with reports suggesting advisers are treated to lavish foreign trips and high-end jewellery.

Bellamy says advisers receive a “badge of office” for making partner, which is a pair of cufflinks with SJP’s logo. He adds incentive schemes are disclosed to clients and the FCA is aware of the incentives in place.

“It is disingenuous to say it’s all fancy dinners with Bill Clinton because we don’t do that. We do have big speakers. As people are aware, this year we had George Osborne. I won’t apologise for the fact we had an ex-chancellor of the exchequer come and talk to 6,500 people in a financial services business about Brexit, about the economy and about his view on what the future looked like. That seemed to me something that was quite educational. Unfortunately you don’t get thanked for getting someone with that kind of pedigree, you just get kicked around the place because he cost £40,000.”

He says the barrage of negative press has been hard to take given the language used.

“We were concerned about the first Sunday Times article because it talked about rip-offs. That suggests cheats and swindlers, and I have to say that got us a bit uptight. That was very personal. Talk to our clients about the value they get from this organisation and the relationship they have with us, and you will find the predominance of clients who are very happy. Why would people recommend us if they weren’t happy? We count former fund managers and economists among our clients. Do you really think they don’t understand the charging structure?”

Bellamy says clients see SJP as a business that is focused on returns and performance, and he is aware of clients disputing the picture being painted by the Sunday Times.

As for other advisers’ negative perception of SJP, Bellamy believes this comes down to a lack of understanding about how the business model works.

“There’s a bit of envy out there, and there’s a bit of ignorance to be honest as well. People don’t understand what we do. We’re delivering to clients industrial scale funds with retail characteristics. The result is we get wholesale rates and play that into the retail market. Most of the fund managers we deal with are cheaper than they would be on any other platform in the country. And all of that benefit is passed straight through to clients.

“We are described as restricted, vertically integrated, tied, and probably lots of other derogatory comments as well. We’re trying to do the best possible job we can for our clients, and it works, and we have a lot of satisfied clients. I don’t think there’s anything restricted about that.”

A special relationship?

There is a theory swirling in industry circles that given SJP’s size and scale, the company has a different kind of relationship with the FCA than other advice firms. Specifically, the story goes that because SJP pays so much into the regulatory system (£17.2m in Financial Services Compensation Scheme levies in 2016, and a further £20.1m in 2015) that somehow SJP has cut some sort of “deal” whereby the regulator looks the other way on issues such as charges.

Bellamy finds the idea absurd.

“If people think about this rationally, look at what’s happened to the banks over the last six to seven years. Billions have been taken out of the banks, and put back into society through fines and compensation for payment protection insurance. If anybody was putting into the system, the banks were, both by way of tax and regulatory fees.

“We’re relatively tiny by comparison. The notion that regulators would be at all influenced by these things is bizarre. We have a decent relationship with the regulator because they want the same things we do. They want clients to be looked after, and to be treated fairly and honestly, and be given a good service. That’s what we aspire to do.

“They will have no issue with different charging structures providing it satisfies the rules. And our charging structure satisfies the rules. They know that, and we know that. There is no deal.”

What the future holds

Earlier this week, Bellamy announced he would be stepping down as chief executive at the end of this year. By that time he will have spent 26 years as part of the SJP executive team, and 11 years at the helm. Subject to regulatory approval, he will be succeeded by chief financial officer Andrew Croft who in turn will be replaced by chief risk officer Craig Gentle.

Bellamy will stay on at SJP in an advisory capacity from next year, and will take on the role of non-executive chairman of the company’s international division.

He says SJP has started to grow the Henley Group business in Asia, and is also eyeing an expansion into the Middle East.

He says from both a personal and professional standpoint, the timing is right for him to step down.

“There are some milestones that have been hit. I am 65 next year, we are in our 25th year, and I’ve clocked over 10 years as chief executive. On the business front, we have a really strong team. Andy’s been on the board 12 years, and has 24 years with the business. I’ve done what I set out to do, and now feels like a good time.

“I claim a lot of personal pride in the business that is SJP. We started out with the three founders in the early 1990s, and being the guy that’s had the baton for the last 11 years, I feel good about where we are as a business. It isn’t every day you join a small team of people and 25 years later find yourself in a respected FTSE100 company and doing great things for stakeholders. The legacy for me is that complete picture, and being part of the team that made that happen.”

Bellamy says he is positive about the outlook for SJP, and the focus will be on investing in Asia, Rowan Dartington, its academy for new advisers, and investing in its back-office system which uses the Bluedoor technology through IFDS.

He adds: “The future for SJP may involve a bigger footprint internationally, and certainly involves a broader footprint in the wealth management market.”

David Bellamy on how the advice market will evolve

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Reflecting on 25 years in the financial services industry, outgoing SJP chief executive David Bellamy says the biggest shift in that time has been the move from defined benefit to defined contribution pension schemes and the emphasis on personal responsibility for saving for retirement.

He says following pension freedoms and initiatives such as the Financial Advice Market Review, there is an acceptance that an advice gap exists. He believes this is only going to get wider.

He says: “If you look at the stats from organisations like Datamonitor there will be more people with wealth, and more of them that have to take care of themselves. The scale of the market is going to get bigger, and that is going to accentuate the advice gap.

“Adviser numbers came down post-RDR and have since stabilised, and may even be going up a bit. I happen to think there will be a bigger advice community in the next five to 10 years than there is today.”

SJP attracts second careerists through its SJP Academy, and those going through training and taking exams to become an adviser have an average age of 38.

Around 100 people are expected to graduate this year, with a further 210 in training.

Bellamy says: “Other firms will do the same, and banks will come back into the advice market as well. I don’t worry about that because there is an advice gap.”

He believes the trend for providers taking stakes in distribution is because those firms recognise the importance of advice.

“This stampede towards DIY, I don’t know if it was truly about buying into the digital age, or whether this was for firms to reduce costs and disintermediate the market.

“Our clients are very capable people. They know their way around money, they just choose not to deal with it. They look at the world today and see it’s getting complicated and they want someone to do it for them.”

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Comments

There are 85 comments at the moment, we would love to hear your opinion too.

  1. “It’s not an exit penalty, we call it very specifically an early withdrawal charge” …. so it’s a penalty for exiting, or as I prefer to call it, an exit penalty! Dear oh dear… surely the FCA don’t buy this do they?

    • I have a large portfolio with St James’s Place and I find the fee structure very fair and the service excellent. I used to be an IFA locally but I found their service poor and all they were interested in was making initial commission and never seeing me again.
      Well done St James’s and please carry on!

      • Be open minded; there is clearly confirmation bias here. You should go to a database like vouchedfor, research a a few highly rated advisers and have some discussions, it doesnt costs anything.You should be able to achieve the following:
        – lower charges
        – more transparent charges
        – wider product range
        – wider fund range
        – better long term service
        – no exit fees
        Of course you may have to pay “early withdrawal charges”.

        If you dont look, you wont find.

        • Really – you seem to have missed one fundamental thing on your list……. good advice!!

          Been on both sides of the fence and seen it all in my 30 years in this business including in the last 6 months 6% initial and 1% trail on platform business both of which the client didn’t have explained to them by their local IFA !!

          What is not transparent about a sliding scale early withdrawal charge over 6 years that equates to 1.5%pa ?

          Be open minded I say and lets have some balance here shall we ?

      • Sound like an SJP advise ‘Dave’ – yeah its really fair if you want to pay 1% over the odds – you crack on pal with your ‘large’ portfolio

        • Jim. You are demonstrating pure ignorance. SJP bundle all costs together including advice fees when you look at their charges. Assuming you are an IFA and know what you are talking about, I ask you to add your product charges, platform charges, fund management charges and YOUR advice charge and see what number you arrive at. Not far off 1.5% I suspect

      • I have a portfolio with St James Place that I’m not happy with as the performance has been poor I haven’t seen my adviser since we first transferred the business to them even though I have called numerous times. I wasn’t aware of this early repayment charge for advice as I was also charged 3% upfront to transfer my pension. I have instructed an independent adviser who is moving me free of initial costs and 0.50% ongoing for an annual review. The pension will be a Supplier with A J Bell which is £200 plus vat per annum and 0.82% annual management charge for the portfolio. I can’t believe clients stay with St James Place as my experience has been dreadful.

      • Shinnig Example 1st March 2017 at 5:11 pm

        Dear oh dear Dave you must be lacking in something

    • Spot on Steve. As the late Alan Clark would have said, Mr Bellamy seems to be “economical with the actualité “

    • Totally agree Steve. What utter, utter spin doctor-ish nonsense. Makes him sound like a proper snake oil salesman.

  2. A reasonable overview of the business he leads. I don’t profess to fully understand their model but it must be good to continually deliver what they do for clients. Personally I have no connection with SJP and currently no desire to have one. However over the last few months most of the comments read like sour grapes and a little holier than thou. Good luck to Mr Bellamy and SJP.

  3. Groundhog Day – again! Apart from the name change and different terminology, what exactly is different?

  4. Can someone please explain why this way of paying for advice is not deemed banned ‘funded commission’ ??!! How can the FCA let them get away with this ?

    No wonder their ‘value surveys’ come out so well when clients don’t see any initial charge !

  5. did I read that something like 95% of client complaints are upheld (ie SJP pay out to settle)?

    That speaks volumes for their business practices and client satisfaction

    • I believe it was 96%

      • This was on the unit trust arm of SJP – not the advice arm, if I remember correctly the number of complaints upheld for the advice arm was around 44% (for investment complaints), although some of the upheld statistics for other products within SJP are just as concerning!

  6. So preFunded advice charges used to advance accelerated earnings to advisers and then even if the client decides they Don,t want ongoing advice or service and chooses to exit they will pay for it anyway. This smacks as a sharp practice and not in keeping with tcf principles . Were are the fca on this abuse. Answer no where because they are getting their cut

    • Ignorance again! The early withdrawal charge recoups the initial advice fee that has been paid to the Partner. This is exactly what would happen in IFA world as a client pays their initial advice feeup front whether they transfer or cash in their investment at any time after day 2.
      If a client doesn’t want ongoing advice, they can turn off the ongoing advice charge and they don’t pay for it. BUT SJP’s proposition is to provide initial and ongoing advice. We are not Hargreaves Lansdown (a great company by the way) where you know what you want and you buy it cheap.

  7. Julian Stevens 1st March 2017 at 9:44 am

    When is an exit penalty not an exit penalty? When it’s called instead an early withdrawal charge! If it’s that easy to dodge the FCA’s edict on this issue, why have all the other providers of bonds and pensions discarded them?

  8. This guy would make Tony Blair blush!
    Apart from all the SJP smoke & mirrors, he thinks that we put clients into passive just to suit ourselves – never would occur to him that its simply the best solution for the client, as all academic studies show.
    Yuk.

    • ALL ACADEMIC STUDIES? Bla bla bla. You look old enough to have advised for more than inthe post financial crash when frankly, anyone could make money. You will recall that markets faulter and crash so where will your clients be if you are simply hugging the index and not hunting out value?

  9. SJP are the undisputed experts at semantics and weasel words. I well recall a meeting at AIFA when they were trying (to my and a couple of others vehement opposition) to enlist them as members.

    The senior person who attended was asked about their approach to advice. He responded that in many cases they didn’t provide advice. Their people were led to say “Well if I were you I would do such and such” and this he maintained wasn’t advice. I had to retrieve my eyebrows from the ceiling.

  10. its commission nothing really changed from what I can see since days of Dunbar ! no initial client fee and exit penalty for 5/6 years is same as commission to me ?

    • Julian Stevens 1st March 2017 at 4:31 pm

      Darned right. SJP is a pre-RDR style sales organisation, pure and simple. What irks the rest of us is not SJP’s success but the fact that they present themselves as something they’re not and seem to have a special exemption from all sorts of regulatory rules by which the rest of us have to abide, not least the fundamental requirement to be clear, fair and not misleading.

  11. “It’s structured on the basis of if you stay with us for six years, you will simply have paid your 1.5 per cent annual management charge.”

    errgh – isn’t an AMC paid every year, not just for the first 6???

  12. its an exit charge – pure and simple – those fools that are clients and praise this deserve nothing better… or perhaps they deserve some education that you can pick up the same ‘products’ (or better) these salesman sell you for a fraction of the cost via a financial planner that has less shiny shoes

    • You sound like a brimouner Jim. “Those fools who are clients deserve nothing better” 550,000 fools? Arrogance beyond belief. I can see you in your back bedroom on your morale crusade right now. Sound like you are jealous of success

  13. John Obi Mikel 1st March 2017 at 2:04 pm

    disgrace to the industry – nothing but salesman flogging expesnvie products you can get elsewhere from less aggressive advisers that actually have the intelligence to advise.

    • That my friend is a very poor and unprofessional post !

    • Now this is going to turn nasty “John”! I am a Chartered Financial Planner, a Fellow of the PFS, a SOLLA authorised Adviser with over 30 years experience advising clients. Intelligent enough for you? Get your head out of your a*** and realise that you are not the only decent adviser out there…….if indeed you are

    • So John, you now say all SJP advisors are a disgrace, salesmen, aggressive and not intelligent? You do admit with your limited vocabulary that indeed IFA’s can be aggressive – albeit less so. I suggest that when you are in a position to make such comments through research or 1st hand experience that such posts ever warrant being published online.
      Get a life and take your so called moral high ground elsewhere.
      What a tool!

  14. 1. @grumpy oap – if I’m understanding it correctly (and no guarantee of that, as it’s fiendishly difficult to understand what is an advice charge and what is a fund management charge), the 1.5% is an AMC and therefore carries on after the first 6 years. I don’t think there is an establishment charge, which could have funded initial advice pre-RDR. But if the AMC is 1.5% and the exit charge effectively covers the initial advice then isn’t it funding free advice, which is not permitted post RDR. Or if it isn’t funding initial advice, then what is it paying for? I’m still a bit confused.

    2. Satisfaction surveys are a farce. It’s like car insurance companies or Wonga asking people who have just completed an online purchase / loan whether they found the process easy to use. Of course a large proportion of SJP clients say they are satisfied with their charges. If they weren’t, they would have gone elsewhere. The correct question should be personalised to the individual’s circumstances e.g. “Your total advice and fund management charges over the past year totalled £X & £Y. Do you feel this represents good value for money?”

    3. I get Bellamy re the shift towards passive investment. I’ve previously worked for two companies (both now defunct) who have changed to passive investment and dressed it up as being in the client’s interest to boost returns, whilst increasing advice charges correspondingly. I know that regulatory costs have increased and this is one way of keeping the client’s total costs lower, but I see what DB’s getting at. FTR, our business charges LESS for investment advice on passive portfolios than active.

  15. “the annual management charge is being used to fund the advice charges. I accept that it’s complicated, but it’s also innovative.”

    An opaque charging structure from the 1980’s is “innovative”?!?! This is just spin (to put it politely). He says things like “It’s almost like a deferred advice charge.” When it comes to advice charges, there shouldn’t be an “almost like” anything. What EXACTLY is it Mr Bellamy? Advice charges need to be explicit do they not? Then he says “When people come to us and say either your charges aren’t clear, or they’re expensive, I don’t believe that’s the case”. This contradicts his statement when he accepts that it’s complicated. Are the charges clear or are they complicated?

    Sorry Mr Bellamy, but nothing of what you have said on your charges stands up to scrutiny and this diminishes your legacy of making SJP a “success”.

    Couple of questions Mr Bellamy:

    1) If it funds the initial advice charge, why doesn’t the AMC reduce after the initial advice charge has been paid off?
    2) If you pay your sales reps 3%, why is there a 6% withdrawal charge in year 1, 5% in year 2 and 4% in year 3? Where does the other 3%/2%/1% go? Is that an advice charge too, or is it a product charge i.e. an exit charge?
    3) If you admit that it’s complicated shouldn’t you change it?

    TCF Outcome 3 – Consumers are provided with clear information and kept appropriately informed before, during and after the point of sale. Outcome 6 – Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint. The Chief Executive has made a public admission that their charges are complicated, so presumably the FCA will be heading down to their offices tomorrow to have a friendly chat?

    Finally, wording taken from the FCA webpage on TCF; “Customer feedback can help you identify where you are treating customers fairly and where improvements are needed. Remember that a satisfied customer is not necessarily being treated fairly.”

    • Julian Stevens 1st March 2017 at 4:33 pm

      It’s not an advice charge. It’s sales commission.

    • This would be my question too. If a client, through no fault or their own, is forced to exit an investment after 9 months, do they pay a 6% early withdrawal fee? If this is dressed up as covering advice costs how do the initial costs amount to 6%? Genuinely asking as I don’t follow. We charge an hourly rate and tell the client it is paid up front. Should they leave after 9 months so be it, we’ve already been paid for our advice.

    • Very good summary James. You missed Mr Bellamy’s comment on their restricted nature though “I don’t think there’s anything restricted about that.” he says…. so the man at the top doesn’t think his service is restricted, so what does he call it?
      I make a point about not belittling restricted services when explaining my status to clients as we may introduce to restricted firms to undertake pension transfer advice because we don’t have transfer permissions and many of the firms we would go to for this don’t advise on anything other than transfers.

  16. Good luck Mr Bellamy

  17. Looking at the SJP website, the retirement account has 4.5% initial advice charge, 1.5% initial product charge. I make that a 6% initial charge. You then have to allow a 5% bid offer spread on the pension fund purchase, so you end up with only 91.20% invested day 1 (96% x 95%). Moving to annual charges the website states 0.5% for ongoing advice, 1% product charge (waived in first 6 years if you stay invested) and then additional fund expenses, these varying as you would expect, but lets say 0.50% average on a medium risk…..Think Mr Bellamy needs to read his own website and learn the charges. It doesn’t seem complicated, but one thing for sure…..Very expensive!

  18. It is my understanding that an SJP client is unable to pay a “fee” for advice received, they have to pay through a product charge. So, where I would offer a fee payable irrespective of whether or not a product was provided and, as a result, all of the invested money could go into the product, with SJP this cannot be done. It was my understanding that, with RDR, we were all to be fee based and that this had to include the option of payment being made to an adviser irrespective of a product being provided and that the payment could be separated from that product, even if one was purchased. If this is still the case then I fail to see how it can be claimed that the FCA aren’t dealing with them in a different way to others. See Investment Bond taxation as the best example of how this might dis-advantage a client!

  19. Questions for the FCA to answer?? 1st March 2017 at 4:56 pm

    “That’s largely because the annual management charge is being used to fund the advice charges.”
    Crumbs. Cat and bag.
    Isn’t an “advice charge funded by the amc” actually exactly what old school commission was before it was banned. In EVERY respect? What exactly is different? This raises so many more questions than it answers.
    So what is the actual advice charge disclosed to the client? Is it 6%? Is it 6 lots of 1.5% maybe? What is it exactly? And if its less than 6%, then why does the client lose 6% if they exit in year 1 ?? Huh?!?!?
    When the amount of actual advice charge is disclosed to the client can they negotiate it?..if so how much does the amc fall by if its reduced?
    In fact how does the advice charge vary if e.g. a client simply wants to add a small amount to an existing plan and there is nowhere near as much initial “advice” work to do as with a brand new client? Presumably it falls as its an advice charge and nothing else so that would be “fair” to client?? – so how much does the amc fall by on the top up if it is now funding a lower advice charge? And is the (non) exit charge lower too??
    And what about the larger investor – do they really charge the SAME percentage “advice charge” no matter how large the investment? Or does the amc (wot is funding the advice charge) fall as the amount invested goes up? (you really cant justify charging the same percent advice charge on £1m as on £100k – even if its just the time saved filling in one form instead of ten!!)
    And how do they take a reduced “advice charge” if the client doesn’t want to proceed or implement, so there is no investment? Or are they only ever paid if a contract is opened? Again, isn’t that effectively commission rather than a professional advice charge?? And doesn’t that create bias to provide advice that ALWAYS involves implementing something? Do their clients have this potential conflict clearly disclosed upfront?? (maybe that doesn’t apply to restricted firms?)
    Maybe I’ve been under a rock for too long, but I’m quite shocked by this – its not the post RDR world I recognise and surely cant be what was intended by the changes?? Certainly not from the clients perspective???
    Does MM plan to raise any of this with the FCA?

  20. jonathan gamlin 1st March 2017 at 4:58 pm

    Interesting

    Saw a prospect yesterday who went with SJP last year , I saw the charges breakdown , 5% initial charge ( waived by adviser to match my quote ) ongoing charges on funds varying between 1.25 and 1.9 % including adviser fee , exit penalties reducing over 4 years to 0 from 4% .

    So if the adviser wants to they can adjust the fees to suit them and be competitive .
    I wasn’t overly impressed with fund performance or asset allocation .
    Client has potential DB transfer of £300,000 to be added to this pension , he’s been quoted £400 for TVAS and isn’t sure of costs from then onwards .
    I’ve told him if they do the lot and it’s good advice for the £400 then bite their arm off , as long as no initial charge and new exit penalty adjustment . Then in the future he can transfer the personal pension to me , no penalty , no advice liability for me !!
    He liked the idea but client inertia if it works out well with SJP and their thirty funds may win out !
    So SJP can play fair but I’m sorry , in the main you will pay up front and on exit and a fair price ongoing plus maybe transactional fees as and when , isa had no exit fee by the way .

    • DB transfer analysis for £400???? Something is wrong with their costing, how are they building in the price of risk to this? Maybe 6% initial on cash investments is funding the complicated stuff.

  21. Having been part of SJP I can confirm they paid for most “partners” and spouses plus provided spending money to have a holiday sorry conference abroad. That’s circa 4-5k people plus the employed SJP troops of which there are many. Do clients really know they are paying for that ?

  22. It shouldn’t come as a surprise that the clever (mis-)use of words has fooled a large number of people (ie SJP’d customer-base). Precisely the same thing happened at last year’s Referendum.
    Essentially the vast majority of people are quite stupid: the collective product of their parenting, the education system and the consumer-society we live in. And that ain’t gonna change any time soon.
    It’s little wonder that people get ripped-off by ALL types of industries (inc fin svs) given the shortage of intelligence within the populous.
    It’s a Dog-eat-Dog world in which the strong (ie more intelligent) will prey on the weak (ie the less intelligent). The likes of SJP et al will continue to ‘succeed’ on this basis all the while Bellamy and his ‘Partners’ refuse to adopt any form of moral compass and while the FCA continue to be spineless. But when they come to meet their maker, THEN justice will be delivered….

    • Julian Stevens 1st March 2017 at 6:38 pm

      What, if any, other organisation would/does the FCA allow to operate an SJP system of charging? Apart from allowing HL to impose nasty exit charges (and not just for early exit either), none that I can think of. It’s all very, very fishy.

    • Yeah, how did so many voters mistakenly and stupidly vote to stay within the EU? The question must have been too complex for them to grasp what they were doing.

    • When the lack of a reasoned, well balanced argument is lacking lets resort to unsubstantiated drivel. The lack of intelligence in the populous seems to of affected you, as well. You state that the people are being ripped off by ALL types of industries due to lack of intelligence in the populous. Can you list any of these industries and how they are ripping off the unintelligent? Can you site any examples of how the intelligent pray on the unintelligent? Could you explain how any employee of SJP lacks a moral compass and how you would like that moral compass to work? I started in Financial Services in 1972 and retired in 2015. During my time I worked as a Home Service Agent, Company Inspector, direct Sales Consulant, IFA ( for 22 years) and latterly as an SJP Partner. Your comments are completely without foundation and overall you paint an unprofessional image of Financial Services. You could give the readers of your rant a little bit more foundation if you give information of your current and past experience. From my experience I found SJP to be a throughly professional company where the clients interests are of paramount importance. The success they have achieved has resulted from 25 years providing clients with a top quality service, surely it is reasonable to believe that this has NOT resulted from intelligent Partners feeding off unintelligent clients.

    • Jesus! I’d hate to live in your cynical, arrogant, holier than though, no doubt left wing and patronising world. Has it occurred to you that people who have a different view, an acknowledgement that they need advice and are prepared to pay for it, voted OUT or Trump or anything else with which you don’t agree, are not necessarily stupid, they are just different to you. I have Barristers, Doctors, Lawyers, Senior Executives as clients. Are they stupid or the product of a poor education system? I agree that they are the product of their parents, who isn’t dumbo. Get back in your box and get a life. Apologies other readers, I don’t usually stoop to personal insults but this moron is what is exactly why people did vote OUT and Trump. Pompous elitism

  23. Who’s behind this firm? Did I see it was previously the Rothschild family? A 9% initial, but tapered, fee is what their documents should say! So if this is clawed back over 6 years, in year 7 the AMC should drop or are they like a phone company that continues to bill you for the phone after you’ve paid for it? Even they have started to clarify this little swindle of theirs.

  24. Having worked for St James Place for a number of years, I can confirm that the initial charge was 4.5% upfront this could be discounted if the adviser wanted to rebate some of his upfront fee. My experience this was hardly ever done unless in competition with an IFA. The client then would pay 1.5% annual management charge for the first 6 years then this reduces to 1% after 6 years. So in effect an additional 0.5% over 6 years 3% to cover costs which went to SJP. The funds carried an additional annual management charge depending on the funds varying from 0.2% to 0.95% this can be found at https://www1.sjp.co.uk/~/media/Files/S/sjp-group/document-library/bulletins/2017/SJP4767-V1-pension-charges-summary-0217.pdf . So yes its a lot more expensive especially compared to probably what most IFA’s charge which I know that seem to charge between 1% to 3% initial charge. Annual management charge is at most 2.45% in first six years then 1.95% with cheapest fund being 1.7% in first six years then 1.2%.

    on a £100,000 case thats £4,500 upfront charge and then £2450 per annum most expensive fund in first six years or £1700 per annum if using the cheapest with it reducing to £1950 per annum most expensive fund or £1200 per annum.

    Hope this helps ends.

    • Thanks Stephen, so just to clarify things, if the adviser takes their initial fee (at 4.5%), does the client still receive a 100% allocation to their investment (i.e. No upfront deduction from their funds?).

      • Steve D

        On the basis that your investments remain with us for 6 years, the effect of the above product and advice charges (excluding the charges for managing and maintaining underlying investments) combined is equivalent in total to a 1.5% annual management charge together with a charge which will apply to any amount withdrawn over the first six years on a reducing scale (6% in year 1 reducing to 1% in year 6).

        Simply answer is no reduction Day 1 as its taken over the six years hence the exit penalty charge. The product charge is similar to a platform charge and fund based built in so 1% covers our platform cost and ongoing 0.5%. In the first six years we charge 1.5% not 1% this covers the cost of the initial advice. This happens every time someone pays a new premium. Having been both sides our initial costs are funded over the first six years after six years we are charging 1% product charge plus fund management charge on average it works out around 1.6% per annum. Compare this to most IFAs that charge 0.35% platform, 0.7% annual management charge and 0.5% ongoing adviser charge so 1.55% so not much in it. I would say the big difference is we charge the client for every time they pay a contribution over the first six years where as most IFA’s wouldn’t charge for paying a single premium or increased their regular premium. So if you had a client paying single premiums every year then our increased charge becomes expensive as we are charging in effect 3% over the six years with our additional charge. This is the same if they increase their regular premium on just the increased amount. This is the same on pension and investment bond business. ISA’s we charge different as we do have a 5% initial charge with no exit charge and the annual management charge for the fund but these are typically 1.4% – 2%.

        • Simple question, simple answer… 100% net allocation after initial advice charge yes or no? I take it that it’s YES by the nature of your protracted reasoning!

  25. A bit like Lance Armstrong saying he did not take drugs, he is in denial, if you say it often enough you believe what you are saying.

  26. Advisor sour grapes…so boring now..clearly still no understanding of it..I moved from an IFA that charged 1% per annum for him, plus a platform charge of 0.6% plus a fund manger charge overall of 0.7% so 2.3% total to SJP in the same fund for a total of 1.7%. There is no bid offer spread..proof again that IFAs don’t understand it, Which by the way I also paid in the IFA world and as long as you stay for 6 years (aren’t we all long term investors?) you don’t pay for the initial advice costs that the advisor rightly has! It’s a great deal and the service is outstanding compared to the terrible (lack of) service in the IFA WORLD!

    • IFAs’ are not so concerned about the cost of competing for business, we don’t tend to find that happens very often (and I’m sure it’s the same for SJP), it’s just the matter of getting to the truth and why up front advice fees appear to be getting subsidised by the product provider, which is not permitted under RDR. Are the advisers therefore employed and on salaries and incentivised remuneration or are they self employed agents? These are the questions which don’t seem to be getting properly answered. If someone can tell me that the initial adviser fee is paid for upfront by deduction from the initial allocation or prior to allocation, as per RDR requirements, I will get back in my box!

    • Who pays 0.6% for a platform? We’re charging approx. 1.88% for a discretionary managed service, how does that compare to SJP?

  27. I’ve heard that the FCA/FSA now regret that they gave the OK to the way SJP get clients to ‘pay’ for advice, as they now realise that it involves product charges subsidising advice, which of course is not permitted post RDR. No wonder SJP are popular with clients because they effectively avoid having to disclose advice fees and get the client to pay for them explicitly. Innovative no, misleading yes

    • If the FCA does indeed regret having turned a blind eye to SJP’s practice of subsidising advice by way of product charges (or having finally been exposed for having done so), three questions arise:-

      1. Why did it do so?

      2. Does it intend doing anything about it? (Better late than never, albeit not much).

      3. If it doesn’t, why not?

      And, perhaps (yes, a fourth question), is this not an issue about which APFA (and perhaps the PFS) should be making as much noise as possible, not least asking the TSC to challenge the FCA about it? After all, whatever else we may think about the regulatory playing field, it should at the very least be level for all who have to play on it which, patently, it isn’t.

    • If the FCA does indeed regret having turned a blind eye to SJP continuing to pay its salesmen by way of product charges (or having finally been exposed as having done so), this raises three questions:-

      1. Why did it do so?

      2. Does it intend to do anything about it (better late then never)?

      3. Should not APFA (and perhaps the PFS) be urging the TSC challenge the FCA on this issue?

      I’ve not seen any SJP SR’s, though it would be interesting to know if (as are those issued by IFA’s required to) they set out explicitly and unambiguously the option for clients to pay any advice charges separately and independently from the costs included in the product.

      Whatever else we may think of the regulatory playing field, it should at the very least be level for all those required to play on it which, patently, it isn’t.

  28. Jesus gents, get a life. Expend the energy to your own businesses and don’t worry about what SJP (or anyone else for that matter) does as it won’t affect you. I know its good to let off steam now and again – God knows I do enough of it but there comes a time when one must really think “Why am I doing this? Have a nice day

  29. I seem to remember a few years ago IFA’s selling opaque Scottish Mutual WP Bonds with 7% upfront commission being paid to them????? It is easy to take the moral high ground and to conveniently forget the past now that it suits. Greenhouses and stones come to mind.

    • Agreed, but the industry was required to clean itself up. SJP included. The issue seems to be that it is not entirely clear whether or not SJP has actually cleaned itself up. Advisers are well within their rights to request a level playing field.

    • Julian Stevens 2nd March 2017 at 2:23 pm

      I never sold an Investment Bond with ANY provider (least of all Scottish Widows) for more than 4% commission and, if more was available (as it was from time to time when certain providers were looking to buy business) it was always ploughed back to enhance the allocation rate.

    • Difference is – they’ve changed in last few years but you don’t appear to have.

  30. FFS, get a life all of you. I can see those of you still young enough to have careers in financial service over the next 10yrs knocking on the door of SJP for jobs. It’s simples; clients trust SJP advisers more than IFA’s so get over it!

    • How so? Can you provide any evidence for that claim?

      Even in a small businesses I have completed customer satisfaction surveys. Guess what, our clients trust us and would recommend us to others.

  31. “That’s largely because the annual management charge is being used to fund the advice charges. I accept that it’s complicated, but it’s also innovative”. Erm, isn’t that exactly what the FCA have said you can’t do? Recent quarterly consultation on Vertically Integrated Firms confirmed “RDR requires VIFs to ensure that the charges for their advice service cover the costs of providing that service. These rules and guidance were intended to prevent VIFs rom subsidising the costs of advice through their product charges and securing an unfair competitive advantage in the provision of advice. FAMR agreed that he basic principles set out by the RDR remain valid”. I cannot understand why the FCA don’t do anything, unless it’s got something to do with funny handshakes…………………

  32. I’ve never read so much rubbish in my life. Has Bellamy pulled it off?

  33. New terminology doesn’t disguise reality. 30 years ago investments were sold with upfront charges which funded the initial commission. Life companies then played around with allocation rates, exit penalties, loyalty bonuses etc all of which disguised the true cost. It wasn’t really advice but financial sales and I can’t see what’s changed here really.

    So what was RDR really about?

  34. The client gets 100% allocation with SJP. I’m thinking of changing my client agreement document to say I won’t charge an initial charge, but you MUST pay on-going fees to me for 6 years. If you leave you will owe me x. Be great to see what the FCA make of that.

  35. Ross Glanfield 4th March 2017 at 3:10 pm

    If SJP have nothing to hide and are as proud of their organisation as some of the (anonymous) Partners claim, why not move to a transparent, up-front charging structure and compete on a level playing field with every other advice firm in the marketplace?

  36. do sjp offer a service where the end result is that none of their products are sold or a transfer of assets required? does every client have to buy/transfer a product just so they get paid? clients are waking up to the fact that planning is the most important thing to them and it doesn’t always lead to a product being sold. how about just planning and charging for your time?

  37. I see that Mr Bellamy has been taking a leaf from Trump’s book on ‘alternative facts’.

  38. The regulator may say that you create a barrier ….

  39. If SJP Partner commenting here is a real person and proud of being with SJP, one wonders why he won’t post using his real name? Seems very angry all the time as well.

  40. Wouldn’t surprise me at all if he was a bot Edward and maybe Anon too!!

  41. i westminsterwills.co.uk 26th July 2017 at 9:08 am

    When comparing whatis referred to as Non Disclosure Which and shamday times should look at pensions at Standard Life and their impact on successive Govts to engineer the cartel of their insurance industry for their benefit. A J Bell has a £ 29.95 charge to sell a fund or Inv Trust along with other charges. Many moons ago when Friends Life entered the Inv Bond market they have a five year reducing Clawback an early withdrawal charge. In building societies they have restricitons and removal of interest if withdrawn early. Scot Eq and others had early withdrawla penalties – becsue the product was designed for a specific term and it allows the provider to plan. What the Which Hunt does not report is the new products and services produced by SJP. Neither do they show the peace of mind the SJP servivice provides for clients. They call it client outcomes. We have seen professional firms like solicitotors become LLP (Limite Liability Partnerships ) andcosy up to accountants including ICAEW – for passing off business – and who have beconme the Government Agent the FCA’s latest Tied Agents and sales men and women and product floggers. The proble with misselling is it is just fraud – designed to deceive in endowments and pensions. The biggest criminal is the Government who have reclaimed tax form savers in pesnions schemes at an extraordinary rate – The Great British Pesnon Scheme Scms continue at the expense of the victims – those who choose to save in them ! aaUTO enrolment is Compulsory pensions. Compulsory pensions and auto enrolmentpensions are Crap Pensions and very bad value for maoney. Still that is Propoaganda of pensions. They are insecure unnatractive and The Trustees own the assets and can do anything they want with them – under current legislation – due to a lax or corrupt Government.

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