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.”