St James’s Place has confirmed its post-RDR charging structure will see clients charged an initial fee of 4.5 per cent for bonds and 5 per cent for unit trusts, for advice and fund management, with an ongoing charge of between 2.1 per cent and 2.3 per cent.
A note was sent from chief executive David Bellamy to SJP advisers this week confirming the changes which will see advisers receive 3 per cent from the initial charge and 0.5 per cent ongoing.
SJP has also confirmed it will be closing its Money Market bond, whole of life plans, stakeholder pension, Section 32 regular investment facility for unit trusts and the SJP Annuity Service. SJP says the products closed represent less than 1 per cent of new business.
The note also confirms the firm’s view that the bond adviser charge will have to form part of the 5 per cent annual withdrawal limit. For unit trusts, the firm warns that HMRC will view the charge as a capital gains disposal, although it is in talks with HMRC about a “pragmatic approach” given there is no sale of the underlying units due to SJP’s vertically integrated structure.
The note also confirms the script SJP advisers will have to use to notify clients that they are receiving restricted advice. It reads: “As a partner of St. James’s Place my advice is restricted to those products and services that have been carefully selected and approved by St. James’s Place and consequently is guaranteed by them.”