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SJP clients offered free advice by IFA amid concerns over charges


An IFA is offering free advice to St James’s Place clients to see if the funds they are in are suitable for them.

Liverpool-based Millen Capital founding partner Angus Millen posted a note on LinkedIn last weekend criticising SJP’s charges and informing anyone with money with the firm to get in touch for a review of their SJP funds.

The note reads: “6% exit penalties?! 5% Initial charges on every £1 you invest?!

“If you, or anyone you know, has money in SJP products contact us today and we’ll put you through our complimentary 3 A’s process…

“We’ll audit, analyse and advise you on your SJP funds and what your next move should be based on what’s in your best interests.”

The note references a report by The Sunday Times into SJP’s fees, in which clients criticised the transparency and structure of the advice giant’s fees.

Millen said this was “more evidence that SJP take your trousers down when it comes to charges and fees.”

SJP told the Sunday Times that “all SJP clients are clearly made aware of charges before becoming a client.”

A spokesman said at the time: “The results of our 2016 client survey, which attracted more than 33,000 responses, showed that 98 per cent felt SJP offered excellent, reasonable or good value for money and 95 per cent would recommend SJP.”

Millen was unavailable for comment at the time of publication of this story.

An SJP spokesman said that the Sunday Times article was currently the subject of a legal complaint, and that it would be inappropriate to comment further.



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SJP-owned DFM looks to break £2.5bn AUM in UK expansion

Rowan Dartington chairman Graham Coxell says the discretionary fund manager is on track to see its assets increase to £2.5bn next year and that non-organic growth will be on the agenda as its UK expansion continues. The firm, which was acquired by St James’s Place in 2015, broke through £1.5bn assets under management earlier this […]


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There are 43 comments at the moment, we would love to hear your opinion too.

  1. Can’t agree. Think this is a dangerous precedent to set. Whilst I don’t agree with SJP charging structure it is what it is and clients have the choice to pay it or not. To criticise one another in public doesn’t help the profession; leave it to the media and let investors decide for themselves.

    • Agree Kevin. The focus on SJP’s unique charging approach (as well as other unique areas in their model) continues to be in the media; aren’t customers getting the message? We are all adults here and clients have to take some responsibility in understanding what they are signing up to. I would focus on my own business and clients and not get involved.

    • Yup I’m with Kevin on this one…it is actually starting to really annoy me when I hear people slating SJP; from what I can see they have thousands of happy customers and given their size they probably do more collectively to raise awareness of the industry then any one other firm. I’ve never won a ex-SJP client on fees, its always been about service. If we just attack fees it is potentially a race to the bottom and offering services for fees risks perception that there is little value / you are desperate for work.

  2. Talk about put your head in the noose, if this leads to lots of switching and ditching… the FCA will only be to pleased to kick the chair out from under your feet !

  3. Neil F Liversidge 23rd January 2017 at 11:41 am

    I can’t agree with you Kevin. SJP are not team players. They’re not in the slighted interested in the advice sectors as a whole; they’ve never supported APFA and the deal they cut with the regulator about how they disclose their charges is highly dubious to say the least. I’ve come across a number of people who are convinced that SJP’s advice is ‘free’ on the basis of verbals wirth their SJP adviser, likewise I’ve had more than one solicitor over the years insist that their SJP contact is independent. That’s how a lot of their guys still apparently describe themselves in conversation, apparently, they just don’t put it in writing. Go for it Angus.

  4. On what grounds is the Sunday Times article the subject of a legal complaint I wonder? Is this what the high SJP charges enable them to do – pull anyone or anything that questions them through the courts or legal process? Nice business model if you can get it I suppose but surely a very dated one. All we hear about is transparency and choice for the consumer (not to mention TCF) but not so for those of SJP – as long as they fill in the nice little questionnaires about how happy they are being none the wiser then all is fine

    • Does anyone remember how Equitable Life would threaten any adviser who was critical of them with legal action? I recollect that clients were (verbally) led to believe so much that was not repeated in all the paperwork they (usually subsequently) received and guess where many of their salesmen ended up. This is a total coincidence of course with regards to any of the current misgivings that are voiced regarding any other firm trading at this time.

      Interesting to see how litigious SJP will become should S40 of the Crime and Courts Act come into force, I wonder, is Max Mosley a client?!

  5. Why provide such a valuable service for free?

    • It could be to do a lot of folks knowing the price but the value and in the case of SJP clients one may be of the opinion that it could be the reverse.

      We all need some form of marketing strategy Nick and they all have a cost. It would seem that Angus has decided to offer his 3 ‘As’ process as his.

    • Anyone might think A N Other IFA had a suite of similar but coincidentally cheaper funds and investment vehicles available…

  6. It’s all very well to claim that “all SJP clients are clearly made aware of [their] charges before becoming a client” but we can bet our boots that no comparison with the charges of any other, similar products is presented (only a genuine IFA would do so and those of SJP would almost certainly compare very poorly) and we’ve all read numerous reports of SJP clients saying that they don’t actually understand them.

    Whenever I’ve compared the charges and funds of a client’s existing SJP stuff with the best alternatives, the results have been a foregone conclusion. Yet the FCA stands by and does nothing. We wonder why but get no answers.

  7. It gets better. Today I learned SJP advisers, who don’t even complete attitude to risk profile reports with clients, can rebalance clients portfolios at a their time of choosing without client agreement. Since when have SJP advisers also been dsicretionary managers? Again, just clearly highlighting the difference between SJP compliance requirements and the rest of the industry. They also don’t need to given written annual review reports.

    • I’m sorry, and I rarely criticise others comments, but eveything in this comment is completely false. I am an SJP Partner and we do complete ATR reports, we only rebalance with client agreement to keep risk tolerance in line and all clients receive annual, and mostly more frequent, annual statements.

  8. I think the point is that very few consumers understand the industry charging model and critically the long term impact of those charges on their return. We have asked the FCA to provide a simple colour coded guide to charges, green up to 1%, amber up to 2% and red over 2% (In a really BIG stripe across all the documentation) so a consumer will at least be alerted to a potentially high charging model and maybe seek another opinion.The consumer will not be aware, I don’t believe, that they could have the same type of tax wrapper and potentially exactly the same fund manager for a lower price because the data they are given, signed off by the regulator, gives them no chance of making that choice. Jamie Oliver tried to do it with teaspoons replacing recommended daily allowances for sugar on foods. Like Nick, I also can’t think that devaluing advice by making it free is the route to go down to attempt to address the issue.

  9. I believe today’s terminology is ‘post-truth’

  10. What I think is more prudent is the training and qualifications of SJP advisors. In-house exams with open book is not what should be happening, but it does!

  11. When I first saw the headline
    First question I thought what the hell is he playing at Glad to see so many agree
    Second question If you highlight charges (product provider and fee/commission ) clients at some stage will question your charges
    Thirdly is this the right advice the exit penalty is of 6% is only triggered on exit How can you justify that enhanced performance perhaps coupled with cheaper wrapper
    Spoke to your compliance department or PI provider about this action

  12. Perhaps the full details of the case need highlighting first before aspersions are cast ?

    In my 30 years + in this industry I have seen numerous cases of ” bad advice ” given by IFA’s purely to line their own pockets.

    How does 6% upfront commission with a 1% renewal sound ?? – came across one of those last year from an IFA – client had no idea !!

  13. Why o why do you all believe such utter rubbish! SJP do not have an initial charge and exit penalties it is one or the other not both!! If you all research this well for your clients god help Them!!!!

    • Agree it was a common practice since the 80’s I recall you could have this charging structure with Abbey life on there pensions
      Once I advised a client who had one of these contracts paying monthly My advice was ton continue with the contract and consider if they wanted to increse there plan dvising a client

  14. Why can’t you focus on running your own businesses. Some sensible comments here, hope Millen has deep pockets for what’s around the corner for him

  15. Sorry sticky fingers on my Blackberry
    I will re write my comment

    Agree it was a common practice since the 80’s I recall you could have this charging structure with Abbey EPP maximum contribution plan on there pensions
    Once I advised a client who had one of these contracts paying monthly My advice was to continue with the contract and consider if they wanted to increase there plan pay single payments to another plan or consider topping up if they wanted pay monthly with another arrangement
    Guess what I was asked to go and meet them again and they had Direct Sales regional Manger in the office from another company They told me my advice was not very good and that they going to cancel the plan and go into a SIPP to get better performance
    They wrote to my Managing Director to complain
    They must be near retirement age now Wonder if they have the slightest clue they given up 10% Guaranteed Annuity

  16. There’s a few unnecessarily harsh comments here. Millen is doing what we all do – analysing a client’s circumstances and existing contracts, establishing whether they are suitable and cost-effective and considering the implications of moving them if they are unsuitable. We all take advantage of a bit of press coverage to stimulate interest in our services, whether it’s the proposed removal of tax relief on pensions, the passive vs active debate, or independent vs restricted.

    I would, however, be careful about offering “free advice.” By all means give the client’s existing contracts the once-over and point out some aspects for further discussion, but “advice” implies that the adviser will take on all of the responsibilities for reviewing the client’s circumstances in full, researching and implementing new contracts. It’s impossible to do this for free unless this work is being subsidised in other ways, which isn’t in the spirit of adviser charging.

    However, the biggest problem with SJP’s charging structure is that the bundled charging structure doesn’t allow the client to stop paying SJP for advice and start paying an impartial adviser of their choice. If clients could do this, they wouldn’t need to pay a 6% exit charge to take on-going advice elsewhere and the current furore over SJPs charges would be greatly diminished.

  17. Various aspects of SJP’s proposition that I’m not keen on. For the sake
    of balance however they don’t have initial charges & exit penalties. It’s one or the other, never both.

    Initial charges of 5% are max. Lots of SJP guys do discount heavily from 5% (some don’t though)

    TER’s are about 1.75% on average for wrapper, funds & ongoing advice.

    They’re also by far the bigger contributer to the FSCS levy, despite never having sold any of the products the people are being compensated for.

  18. This is indeed my understanding, which then begs the question ‘how is Tim possible under RDR to have initial charges but 100% net allocation? I thought that this was exactly what RDR was designed to put a stop to. Its commission isn’t it?!!

  19. I thought SJP advoce was already “free” as they receive commission /percentage fees for selling their product. I would be extremely concerned where any Indepndent Adviser ( or restricted adviser or Tied Agent ) offerred free advice ? e.g Bank Building Society such as HSBC, and sub Standard Life product, along with the Nation “wide” boys – where the “hook”, ( and sinker) is preferred to the provision of good sound advice. One example of advice on offer form Nationwide (as authorised “advisers”) is to sell a pension plan, creating tax for the client – and loss of tax relief – then flog them a Nationwide cash account – due to their “low risk profile”, whilst selling them a stocks and shares ISA ? Good service or commission orientated product flogging by this Bank – which claims to be ” Mutual ?” But then claims by Sub Standard Life to be “looking after clients best interests”. What many advisers appear to forget is SJP are providing an all round service . It is easy to pick out one area of their service ( usually based on cost ) many times without proper examination – and I wonder how many Advisers would stand up to such scrutiny ? The best way forward is Fee based advice open, transparent and agreed with the client up front. The clients can decide if the ” advice on offer ” offers ” Real Value for Money ? ” or is it just a means of transferring client money – into the hands of an ” adviser” without any true worth ? Good advice does not come cheap – and Good advice is never free ! Be cynical if someone offers free advice – it would appear someone is “sponsoring” them in the background – which is not always transparent e.g CON servative Party funds. In my opinion Sponsors introduce bias !

  20. What’s the betting that 95% of the funds will be unsuitable for the client and they will be persuaded to transfer their business to Angus.

    Amazing lead generation. Dangerous method.

  21. Sorry, but just to clear up my comment, can anyone tell me; does the exit penalty contract, which has 100% net initial allocation, reduce its allocation from 100% if there is a payment of an adviser fee, or is this paid by other means?

    • Payment to the adviser is always paid by SJP and is not taken out of the client pot. Therefore if an ERC is in place the allocation is always 100%. If the adviser chooses to apply discounted terms you cannot apply an increased allocation so the ERC period is reduced instead. Same with plans that have an upfront cost. Whilst the maximum is 5% this can be discounted by the asviser as they see fit, down to 0% if appropriate. Thus, a standard ISA for £15240 would in most occasions, attract a fee of 5%, an investment for £300,000 would not. For example, I recently placed an investment for £300,000 and the IFA cost was £9,500. I offered a rate of 2% as I was happy to discount terms for that particular client.

  22. With SJP, the allocation will be 100% gross regardless of what level of initial fee taken. If they take less than 3% (cost to client 4.5%), then the 6% sliding scale exit charge which is used to cover the initial charge, is reduced.
    Post RDR , Initial commission at SJP has been re-named as Initial Advisor charge (IAC) and fund-based renewal as on-going advice fee (OAF).The products etc didn’t change . A new pension is being piloted at present with new charges which when given to all SJP Partners may well shut the door on the exit -penalties scenario , with an internal “no-cost” transfer from old plan to new. Interestingly the arrangement is a more expensive plan as OAF goes up from 0.25% to 0.5%pa !
    Our friend offering the free-advice has clearly worked out that under RDR, for post RDR cases only, he can get the client to turn-off the OAF being paid to the SJP advisor and replace it with his own fees (totally in-line with RDR rules). Once requested, SJP write to the client asking them to re-affirm that they don’t want to deal with the SJP Partner ( basically giving that Partner the chance to get back in with his client) and asking them to sign a form. SJP act on the form by adding units to the clients funds equivalent in value to the OAF (they do this as to change the AMC on a case by case basis would cost millions in IT costs). Yes I am Ex-SJP and I am an IFA who has done this with several old clients.

    • Thanks John, hoped somebody could clarify things. So, if the initial advice charge is not taken from the investment allocation, then it is a form of factored sales-related commission, as they do not pay ‘salaries’ to partners (do they?).

      I thought that this was banned under RDR, so exactly how are SJP getting away with it and why have no other product providers grasped the nettle and tried similar, or argued against this practise? (I think know the reason for this, its because they are not bothered!).

      • How/why the regulator allows SJP to operate a charging structure from which it’s banned other providers is a question that has been asked many times, yet no answer has ever been forthcoming. On the basis that most investments should be approached with a minimum time horizon of five years, I would like to be able to offer my clients the choice available with SJP pension plans and investment bonds. For those who remain invested for at least six years, a tapered scale of early exit charges (all other factors being competitive) tends to be better.

        So, on the basis that SJP partners are allowed to offer this choice, whilst others are not, suggests that the regulator has allowed SJP a competitive advantage which others are denied. With that there is surely something wrong and one has to ask why APFA, for example, appears not to have raised formally with the regulator what amounts to a blatant tilting of the playing field in favour of SJP.

  23. Dear, dear. This thread both amuses and annoys me at the same time. I even see the poor old Equitable get a slating too. IFA sour grapes after all this time? Equitable’s client base of Accountants, Solicitors, Barristers, Company Directors and other professionals must have all been pretty dense to have been duped for over 200 years. SJP have a similar professional and mass affluent client base. They must be pretty stupid too. The fact is, the clients of both these companies know what they are getting themselves into. They’re knowledgable and switched on. They did/do push back on charges. The bottom line is the value for money overall they’re getting. They value their SJP Partners advice (most are highly qualified by the way) and believe it’s worth paying for. They value excellent service and regular reviews (which they get). They also know that SJPs investment management approach is compelling and delivers excellent results, regardless of charges. Oh, and most clearly DO understand what those overall charges are. The KIIDs/KFDs and illustrations set these out very clearly – and separate out the advice cost element.

    • Hello Anon.
      I can well remember the number of clients placed into Equitable Life contracts because their salesmen ( or accountant) told them they didn’t pay commission. They certainly DID pay commission, but not to independent advisers. This was one reason why IFAs wouldn’t use them; the other being their parlous capital adequacy and reserves position. In fact, Equitable Life’s salesforce (for thats what it was) was known to be one of the highest paid in the industry.
      Plenty of people thought they’d be clever and avoid a pesky and expensive IFA, and use Equitable Life. That short term gain has proven to be hugely expensive in the long run.

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