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SJP under fire again over charges and exit fees


Clients of St James’s Place have attacked the firm over what they say is an opaque charging structure and punitive levels of exit fees.

The Sunday Times was asked to examine what retired solicitor Arnold Rosen had been charged by SJP between 2009 and 2015 after Rosen could not work out the level of charges himself. SJP says he was given a breakdown of the charges in 2015.

He told the newspaper: “I could not understand what they were charging me. Why is it so difficult to read what just six years’ worth of investment had cost me? It is too opaque for a pensioner to understand. It should not be rocket science.”

Rosen’s fund grew from £280,000 to £391,490 over the six-year period. The Sunday Times says he paid a total of £36,119 over that time. Rosen also paid £3,056 to James Hay for administering an old Sipp, which would have cost £95 to close.

Rosen left SJP in 2015 after three years of trying to understand the charges, citing a lack of transparency.

Another SJP client, who wished to remain anonymous, faces an exit fee of almost £20,000 to leave the company.

SJP operates early exit charges of up to 6 per cent, with clients paying the charge upfront. This reduces by 1 per cent a year over the first six years.

The client said: “We have all paid over the odds before, but it doesn’t feel any better when the person who advised you is someone you considered a friend.

“Ultimately, I am left with the strong feeling that I have been taken for a ride. That is clearly my own fault for being too trusting and not investigating this carefully enough. But it leaves a particularly bad taste in my mouth.”

SJP told the Sunday Times: “All SJP clients are clearly made aware of charges before becoming a client.

“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.”

The Sunday Times first investigated SJP’s charging structure in 2015.



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There are 49 comments at the moment, we would love to hear your opinion too.

  1. Brilliant work from our beloved regulator! Back in those racy old commission driven days, if an investment plan was cancelled during the (usually) 2 year commission accrual period, the adviser would have pro-rata commission clawed back and would be out of pocket. Since the RDR and the introduction of ‘Customer Agreed Remuneration’, SJP have engineered it so it is now the client who pays for cancelling their investment plans, yet their claw-back period is 6 years – that’s 3 times longer! Good work!

  2. A completely different set of (opaque) rules and charges, including eye-watering commissions for the SJP ‘Partners’.
    Whereas the IFA community would be chastized and hauled over the coals by the FCA if we ever dared to try and apply such an agreement with our clients!

  3. Never been present at an SJP client meeting so cannot comment on how clearly the exit charges are explained however any “Yes, Prime Minister” fans will remember how Sir Humphrey showed how easy it is to get the answers you want from a survey – it just depends on how you pose the questions! 98%, really? If I was a cynic that raises the next question – how were these clients ‘attracted’ to respond to the survey, was there filtering in terms of which clients were surveyed – by the company or the adviser? What were the reasons for the many complaints they have had over the last year or two, as reported here in 2016?

  4. All you comments have one thing in common, ignorance, hopefully you do better research before making recommendation – I doubt it

    • Are you with SJP by any chance?

    • Clearly you have taken offence at the earlier comments, Peter, but this is just what most of us have found when we have come across clients of SJP. You may well be different to many of those, having only been with them since June last year (according to the FCA Register). However, even the quote ‘…..98 per cent felt SJP offered excellent, reasonable or good value for money’ is skewed statement. So it could be that 98% of those questioned stated that they thought the fees were ‘reasonable’ rather than excellent or good, and even then, what did they have to compare them with to come to that conclusion. That may be a better definition of ignorance than your assumption.

    • Peter, you are a wag. Fancy trying to persuade us that you don’t check what you write by missing an ‘r’ off ‘your’ and an ‘a’ between ‘making’ and ‘recommendation’ !

  5. I think the FCA should first survey SJP clients to find out how much they understand their charging system. We know that the clients we have with SJP do not fully understand it. That is not fair. I know SJP state that clients now what they are paying but not only is this not true – our research – but they do not understand the implications.
    Secondly it cannot be right in any circumstances that a client should have to pay any exit fee because of a change in circumstances or legislation or a change of heart. The RDR was supposed to get rid of trail or renewal and more importantly allow clients to switch it off. Exit penalties, charges or whatever – time has shown that they are a hangover from the past.
    Come on FCA, properly SJP clients and find out what they understand about their charges – not what they have been told.

  6. Maybe 98% thought the charges were reasonable because they couldn’t actually understand what they really are??!!

  7. SJP has in its deck an extremely handy (and, dare I say it, covetable) card. On one side its says FCA. On the other its says GET OUT OF JAIL FREE. Wouldn’t we all like one of those?

  8. Quite simply do I want an IFA to Charge me an up front fee or deduct it from my investment or do I want to have all my money invested by SJP, but face paying the fee as an exit charge if I take it out within the first six years? Merits in both options for different people. Is one right and the other wrong – not in my opinion so long as an individual is aware of how it works.

  9. So if a client wishes to take their tax free cash from age 55 but still within the six years will they still be penalised on that withdrawal?

  10. Can someone with an hour to spare put an FOI request in to the FCA to ask how many of their senior management have previously worked at SJP and also how many have returned to SJP after a stint in the watchtower. I have met several already who seem to jump from one gravy train to the other, spiraling their careers upwards in cahoots with the very people they are meant to be regulating.

  11. I didn’t have my tape recorder to hand this summer when I met one of the Heads of ## Complaints at SJP. I joked that they must be busy to which they scoffed ‘Why would that be?’ When I explained to them the reason for £3m of pension transfers that month that my firm took from SJP (with no exit penalties as these were old and for a fee of £2000) was mainly the opaque nature of their high investment charges and the impact this had on the Critical Yield and long term value of the pension plan for the client- she poured scorn on me and proudly declared: “We can justify those charges because we can guarantee the fund performance is going to be excellent” I laughed so hard I didn’t have time to get you all a tape recording before she scampered off. I am so sorry.

  12. I have sat in on several SJP client reviews with the clients whilst the SJP rep (for that is what they are) goes through the wonderful performance figures. I have then showed on FE Analytics that the said funds are not that wonderful and are in fact in the main altered mirror funds and that the charges are high. Sadly all five clients are stuck with SJP as they are in bonds with horrendous charges to get out. The rep when asked any question in regard to what is in the script always states the same, “I will have to ask my back office about that”. Stunning really and yet the FCA looks the other way. Like the old adage states “its not what you know but who you know” I guess.

  13. Martin, a very good question and how would drawdown work within the same six year period, would there be an issue if the returns did not match the income taken? To Peter Kerans – please enlighten us ignorant IFAs and, when you do that, what about bond withdrawals too? Many thanks.

  14. CDL, I think Peter has decided to withdraw back into the fur lined trench he raised his head out of earlier.

    • But you have got to admire the quality of the paper and the font they use! Sat in a seminar a few months ago where one of their recruitment guys stood there and said that the “independent v restricted argument was dead as the clients couldn’t tell the difference” – now that really speaks volumes about them.

  15. Nobody is commenting on how you get what you pay for. I wouldn’t take my expensive car to a local independent garage. I’d take it to a main dealer. I prefer to shop in John Lewis than Arkwrights open all hours. And I’d much rather travel with kuoni than a little travel agent. It baffles me why IFAs constantly seem to be jealous of a large well established and trusted by their clients company such as SJP. And before you all assume, as IFAs tend to, I’m a client that used to work in banking. I like SJP, I like my adviser. Stop attacking them.

    • Whittington Dick 16th October 2017 at 5:17 pm

      Sorry, Nm, but O M G.

      You can get a loan from M&S at 1.7% APR or you can go to a payday loan company at 1281% APR. The latter costs eye-wateringly more, but you’re still borrowing the same thing; money. You’re talking about value, and SJP are not exactly known for offering value, unless you think nicely watermarked paper and the Chauffer driven Porche Cayenne the adviser arrived in means you’re getting a cracking deal. Has it not occurred to you that the number and nature of the comments are because there’s a very good reason? SJP are highly trained in persuasive sales techniques. Quite a number of their client’s are actually terrified of their SJP adviser and wouldn’t dare cross them; it’s almost like they’ve been hypnotised. Others just like to say to their ‘friends’ “well of course I’m with St James’s Place, y’know”, which brings us to OMG again. Strewth.

  16. NM so you like shopping in Waitrose but getting Lidl quality food? That’s what you get with SJP. I am pleased that you like your adviser and the firm, I too have had first hand experience of dealing with SJP partners in a professional capacity. The adviser that I got to know well has around 60 clients, works part time, drives round in a top of the range BMW lives in a leafy suburb of London. I hope the client’s he services are benefiting for the same standard of living.

    I had a chance to become an SJP partner, when I saw how ridiculous their charges are I ran a mile. I couldn’t look a customer in the eye and justify an up front fee of 4%+ let alone the ridiculous exit fees.

  17. @NM
    Well good to see the old proverb still holds true:
    “There’s none so blind as those who will not see”
    At least open your mind to an alternative to SJP, you might surprise yourself and also I suspect be a lot wealthier

    • So the main driver of joining SJP is to increase one’s personal wealth, is it? No, it’s the guaranteed practice buy out deal upon retirement and not having to worry about the lack of any longstop.

  18. I must admit I thought the FCA abolished exit fees with RDR, apart from SJP. In the previous commission world, I recommended some bonds with exit fees in the first 5yrs, but then, there was no upfront fee or charge either so clients liked that. After all no adviser should be recommending any asset backed investment for less than a medium term horizon, which I see as 5yrs plus. Respectable upfront fees now geared to the amount invested still works ok. I could justify 5% on a small lump sum, but not on £1m

  19. They (as we all can) charge what the bloody hell they like, FFS get over yourselves for crying out loud.

    If Mr Rosen would prefer lower charges rather than the £1,500 average or so, he has made per mth on his investment (from how it reads after charges) I suggest go put his money under the pillow it can stay there for a lifetime free of charge.

    • Or he could have invested his money in a world class multi asset fund such as Trojan made a 70% return, and £36,000 richer for not paying SJP’s fees.

      As IFA’s we should never be so arrogant as to think the customer doesn’t have the ability to do their own research. Yes we have the right to charge a reasonable fee, but wholesale ripping the preverbial out of client’s assets through excessive charging doesn’t our industry any good reputation wise.

      Remember most people see SJP as IFA’s……..

      • Your recomendation is with hindsight. I could advise better by 100% than Trojan, destinations for funds, after the event.

      • Sanjay, horses for courses, you put 10 different advisers in a room you will get 10 different investment styles and funds, 10 different charging styles and costs, 10 different risk profiles to fund choice and so on and so on
        SJP like or hate them, run a business they make the choice of what to charge to cover their cost and make a profit, I run a business and I do exactly the same, and at the end of the day its about charging what is right for you and your business and quite frankly bog all to do with you or any-one else.

        The consumer has a choice if they feel its to expensive odds on they will walk away and find some-one more akin to their spending requirement.

        And as far as I am aware SJP work within the rules (nudging the boundary’s maybe) so people need to look into the reasons why advice is so expensive ?

  20. But their seminars are great ……

  21. Sanjaysanjay…

    It’s wrong of you to make assumptions on my behalf. The quality of my investments are superb. The quality of my adviser is the best I’ve come across in almost 45 years of working in banking and being an investor and I include friends and colleagues in that list by the way. You’ve completely missed the point. I get what I pay for. My adviser doesn’t drive around a leafy suburb of London. He doesn’t drive a BMW. And so far as I can tell, works hard for a living. He comes and sees me where and when I ask and doesn’t my charge a meeting fee or anything like that as it’s all included in my package. I’m invited to financial briefings, events and above all, I have utter peace of mind. Something I don’t get from the local IFA who keeps banging the drum on charges.

    I knew what the charges were before I commenced my investments, and whilst it was a risk on my part that I had to leave my investments for 6 years, if I knew I needed it before then, I wouldn’t have commenced it. I didn’t pay an exit fee as I’m happy and therefore didn’t have to.

    I fear you’ll never understand snajaysanjay. And whilst we’re on assumptions, I assume you’re an IFA, I assume you charge hardly anything, merely advising clients for the love of the profession, I assume you drive a 10 year old Fiesta. I assume you live, not in a leafy suburb of London but because you are ‘honest to goodness’ and decided to live in a bedsit in a council estate..?

    No – I thought not.

    Finally, can I just say how utterly unsurprised I am that a solicitor (Mr Rosen) is complaining about something – anything..! He’s a solicitor for goodness sake. That’s what they do. Is it not greed, if he isn’t happy with the return and SJP, I assume that – maybe – an IFA has turned
    his attention to better returns etc… The grass isn’t always greener as they say.

    • NM you talk about assumptions ohh dear. Yes I do live in a leafy part of London and no I am not an IFA (but I have worked in the industry for over 2 decades), nor do I drive round in a Fiesta, Robin Reliant or Triumph Toledo. I am going to be writing an article about charging in the Financial Services Industry as a feature on my website, unfortunately if you don’t understand how much you are being overcharged there is not a lot I can do, but that won’t stop me giving SJP a big thumbs down. Fair play to you sharing your wealth with your adviser though.

  22. What this boils down to is that SJP seem to enjoy a special exemption from the regulatory requirement that charges should be clear, fair and not misleading. It’s all very well for SJP to state that Mr Rosen was given a breakdown of the charges in 2015 but still, despite being a retired solicitor and therefore, one may assume, of above average intellect, he couldn’t make sense of them. So they obviously weren’t clear and, if they really were, as claimed by the Sunday Times, a total of £36,119 over a period of six years, hardly fair either. And on what basis, other than having been misled, can Mr Rosen have been persuaded to accept charges of £3,056 for the administration of old SIPP, which would have cost a mere £95 to close? What, if any, was the rationale for retaining it?

  23. I think what this article and the comments exposes are some uncomfortable truths:

    1. The large majority of clients are not cost aware or sensitive however much we’d like to think they are.
    2. Most clients are incapable of comparing costs, charges and associated products and services in a meaningful way even if they wanted to.
    3. The client’s perception of their adviser and the service they see and receive is more important than anything else, including costs, products and services.
    4. SJP stretch the RDR charging rules to their limit but don’t break them. Don’t blame SJP, blame poor drafting of the rules.
    5. IFAs could do the same as SJP if they chose to.

    • Re point 5, can IFAs charge 3% up front without a deduction from the clients capital and impose a 6%/5%/4%/3%/2%/1% “early withdrawal charge” on pensions and Bonds?

      TCF Outcome 6 (remember them?) – consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

      And if, as SJP appears to be saying, these penalties are advice charges not product charges, why do their Unit Trust range not have the same charging structure?

  24. Looking at Mr Rosen’s circumstances from a different angle (and assuming that the SJP product in which he was advised to invest was a PP of some sort ~ the article doesn’t say), six years of charges at about £3,000 p.a. to maintain his old James Hay SIPP comes out at about half the charges under the SJP product over the same period.

    Now, SJP claim that before recommending any investment into one of their own plans, they investigate whether or not it would be better for the client to add to what he already has. Again, assuming the new SJP product was indeed a PP, it would have been very considerably less expensive for Mr Rosen to have topped up his James Hay SIPP and the fact that he invested instead in a new SJP product cost him twice as much. So what investigation was undertaken?

  25. We were up against SJP for a £300,000 bond. We lost because the SJP adviser rebated his “fee” of £9000 to the client.

  26. I think that the whole market is on the brink of massive change when it comes to fees and charges. The media will continue to delve and ask uncomfortable questions and IFAs will not be immune.
    Check out this new Guide which explains the issues as we see

  27. All these “anti SJP” comments do make me chuckle. Personally I never attack IFAs, or indeed any other professional, for how they run their business. Advice is not free and it should not be expected to be so. Personally, and of course I’m with SJP, I think our model is quite clear and I always explain it to the client very clearly and explicitly. For ongoing service the TER covers all costs in a single figure, including the provision of ongoing advice, so clients do not have to work it out themselves by adding together the various components of the advisory process – platform, managment and adviser costs. For non-pension and non-bond business the cost of advice is taken up-front via a deduction from the investment, just as it is in IFA world, with no exit fee. With pension and bonds there is no explicit charge upfront,with costs of advice recovered over a number of years via the TER, and the early repayment charge ensures these costs are recovered. When we construct recommendations for clients we would generally use a number of wrappers to provide the client solution and the pay to the adviser is the same irrespective of which wrapper is used so there is no bias or other undue incentive. In all cases we are free to apply discounted terms as we deem fit. I cannot see how any of this is unclear, not transparent, opaque or otherwise unclear. It seems to be that others are happy to criticise our model out of some misplaced sense of envy. Whilst I can’t speak for SJP as a whole I can certainly speak for my clients who are extremely satisfied with the service that I provide.

  28. Lets also not forget that this in a journo article that is probably economic with the detail in order to present a better story!! It makes no specific mention that was in conjunction with a pre-RDR product where upfront charges, ongoing charges and exit fees were allowed and no different to many advisers recommending similar. (And probably considerably less than solicitors charge!!!!!). It makes no mention of the 52% growth on investment (including charges) or the clients attitude to risk when considering how good or bad this was (albeit with hindsight). As ever with clients complaints, often after a falling out with their adviser (and often the clients fault), the waters can be muddied – no mention of anything FOS related……

  29. Andrew Cartlidge 23rd January 2017 at 5:42 pm

    St James’s Place appears to have enjoyed a highly privileged regulatory position, perhaps due to its backing from powerful interests. The FCA seems frightened of reining in an organisation which includes both Lord Weinberg and Lord Rothschild as significant personal or corporate backers. Despite his personal business interests, Lord Weinberg was actually placed in charge of one vital retail investment review. His role was to pontificate – not to be questioned. The trenchant consumer lobby has been very slow to air criticism of SJP, but perhaps consumers have given them no cause to? The company’s very obvious misuse of the term ‘partner’ is offensive. It must be intended to mislead, otherwise St James’s Place (a FTSE 100 company) could not find the term useful – yet the ‘partners’ of SJP are not actually partners of anything. As a partner of a firm that IS a partnership I have complained formally to the FCA about St James’s Place abuse of the term – but the FCA will do nothing about it. I doubt from their replies that the person I dealt with there even understood the significance of the point. I know from experience that clients of SJP often believe themselves to be dealing with a ‘partner’ of the business in a literal legal sense. SJP’s headed paper correctly acknowledges the title to be a ‘marketing term’ in small letters at the bottom – but how can such an inaccurate description of actual legal status possibly be ‘true, fair and not misleading’ as the FCA supposedly requires of regulated firms? As the term ‘partner’ has definite legal significance in a business context its misuse by SJP is untrue because their representatives are not ‘partners’, unfair for the same reason and therefore highly misleading. The FCA will do nothing – because if SJP warrants something that is UNTRUE, UNFAIR AND MISLEADING the FCA grants them special licence. If describing a regulated individual to be something he/she is not is (according to the FCA) not ‘untrue, unfair or misleading’ it is difficult to comprehend what is? No wonder there have been so many scandals in retail financial services with the bar set as low as this by our regulator and the thousands it employs.

  30. “For ongoing service the TER covers all costs in a single figure, including the provision of ongoing advice, so clients do not have to work it out themselves by adding together the various components of the advisory process – platform, managment and adviser costs.”

    Imagine if any other advice firm decided to bundle up its charges into a single fee. This is what RDR and the subsequent platform and investment charge review was designed to combat. SJP should be forced to unbundle its charges immediately and for clients to choose which parts of a service they wish to take.

  31. “For ongoing service the TER covers all costs in a single figure, including the provision of ongoing advice, so clients do not have to work it out themselves by adding together the various components of the advisory process – platform, managment and adviser costs.”

    Imagine if any other advice firm decided to bundle up its charges into a single fee. This is what RDR and the subsequent platform and investment charge review was designed to combat. SJP should be forced to unbundle its charges immediately and allow clients to choose which parts of a service they wish to take.

  32. Just happened to come across this thread by accident and NO… I have not been told what fees I have to pay with SJP, and if I have I do not understand them at all.

  33. I am a SJP customer having given them a six figure lump sum to invest in An ISA for my wife and I, with transfers from a Unit Trust Feeder each year. I have the paperwork with the fees which seem to be about 5% in year one and an average of about 2.2% each year thereafter. My biggest gripe is that on an ongoing basis I can’t see where those costs are deducted from my funds and am not sighted on the detail around other costs, such as when Feeder funds are sold and then re-purchased for the ISA. My wife has an ISA (2015) with HL which is doing better (self selected funds -could just be lucky so far) but at least I can see where every penny is going, or indeed coming from. I have at least 4 more years with SJP and not impressed. Not enough clarity, and no ease of access to information.

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