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SJP sets out RDR pricing

David Bellamy 480

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. There will be an ongoing charge of between 2.1 per cent and 2.3 per cent.

SJP advisers will take 3 per cent up front and 0.5 per cent as an annual fee. Clients will have to pay through the products they invest in.

The firm is in discussions with HM Revenue & Customs about allowing vertically integrated firms to take adviser charges through unit trust investments without it counting as a capital gains tax disposal.

SJP chief executive David Bellamy sent a note to SJP advisers last week confirming the changes.

The note 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 details the script SJP advisers will use to explain the restricted advice proposition to clients.

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.”

Bloomsbury Financial Planning partner Jason Butler says: “SJP has not moved on from the mindset of a product provider.

“It is assuming that everybody who needs financial advice requires a product, which is not the case.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. “carefully selected and approved by St James’s Place and consequently guaranteed by them”.

    Carefully selected, my ass. I’d bet good money that a visit to any SJP partner to discuss pensions or investments is 99.9% certain to result in a recommendation to invest in an SJP product (probably an onshore Investment Bond), not to mention a recommendation to churn all one’s existing investments as well, and that any decent IFA could, without much difficulty, shoot such recommendations to pieces.

    We all know by what criteria SJP selects the products its partners recommend, amongst them certainly NOT low charges or a wide range of top quality funds. A few SJP funds are good, but the range as a whole is decidedly patchy.

    Provided that only products covered by the FSCS are recommended, any intermediary firm in the land can guarantee the products and services with which it provides its clients. I think I’ll start including a similar promise on all my adverts and stationery.

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