Are St. James's Place Charges High? | ABC Money (2024)

Whether it’s your pension, stocks, or other types of investments, you have a lot of options for growing your wealth in the long term. Many investors prefer to save time and money by outsourcing the management of their investments to professional firms like St. James’s Place (SJP).

Financial advisers like St. James’s Place help clients across the world plan for retirement, grow their money, and more. But their services don’t come free: Like most other advisers on the market, SJP charges fees in exchange for its expertise and hands-on assistance.

Annual fees add up, and some people wonder, “Are St. James’s Place charges high?” A little research reveals that SJP’s charges are well within the industry average.

Are St. James’s Place Charges High?

In a separate independent report by Ernst & Young LLP, the firm conducted a like-for-like comparison between SJP and 18 similar firms in the U.K. This independent report showed that SJP’s charges are typical for its balanced portfolio of funds over a period of ten years.

How SJP Charges Work

When you invest with SJP, you pay 4.5% of your initial investment which will be used to pay for advice, and then an annual charge of 0.5% will be charged for the ongoing advice and the relationship with your adviser. The ongoing charge F is the charge for SJP’s services, including investment research, fund selection, and monitoring. It also includes SJP’s administrative costs and financial planning services.

There is also an external fund manager charge.SJP funds have external fund managers that charge additional fees. This charge covers their research, risk management, and reporting. Depending on how you invest, you may also pay a performance fee if the manager outperforms the fund’s goals, but that will be spelled out in your agreement with SJP.

Additionally, there are product charges. These are fees based on the type of products in which you invest. Investment bonds and pensions have an initial product charge of 1.5% of your initial investment and an annual management charge of 1% (SJP waives this for the first six years). Individual savings accounts and unit trusts have a 0.5% initial product charge, as well as potential ongoing fund-related charges, depending on how you invest.

In other words, the ongoing charge is a single percentage that tells you what you pay for administration, financial advice, product charges, fund manager charges, and more.

Why Critics Say Fees Are Worth It

Among SJP’s customers, 80% say it’s excellent or good value for the money, and an additional 15% say it’s “reasonable” value for the money. Although it charges fees, SJP’s wide-ranging services are worth the expense. They allow SJP clients to make the most of tax advice, inheritance planning, investing advice, and more.

SJP’s charges aren’t considered high, which is good news. Experts consider its offerings a good deal for the money, so although you’re paying market rates with SJP, you get a lot of value.

Passing Savings on to Clients

Like many respected businesses, SJP takes proactive cost-cutting measures and passes the savings on to its clients. For example, SJP leverages economies of scale to cut down the fees it pays to external fund managers. SJP is able to negotiate competitive rates thanks to its sheer size, which helps it reduce costs. By outsourcing fund management, SJP is able to reduce its internal costs and speed up time to value for its clients, too.

SJP also cuts its fees by tiering charges. The more a fund grows, the more the charges for that fund can reduce over time. SJP’s team looks at the market regularly to look for opportunities to negotiate lower rates when possible.

Customised Financial Advice

Partnering with a financial adviser can create a lot of additional value for your investments, which is another reason why critics laud SJP. In fact, according to a report by the International Longevity Centre U.K., people who use a financial adviser are £47,000 (around $57,300) better off in retirement.

SJP’s financial advisers don’t dole out the same advice to every client. They get to know your long-term goals and craft a plan to make the most of your financial situation.

In many ways, SJP’s financial advice is the company’s crown jewel. It delivers more value to SJP clients in the form of high-quality service. SJP puts clients front and center. It doesn’t manage money for large external entities or incentivize its managers to recommend specific funds. SJP promises an adviser is looking out for your interests at every turn.

Taxes are difficult to navigate on your own, but fortunately, an adviser could help you optimise your money to maximize tax relief and allowances available to you.

Any reputable adviser will welcome regular meetings. A financial adviser meets with you regularly to keep track of your goals and course-correct as needed. If you need additional confidence or help balancing risks and rewards, an SJP adviser can diversify your portfolio to help you achieve your goals.

Solid Track Record and Disciplined Approach

It’s getting harder and harder to protect yourself from online scams and illegitimate investments. That’s why quality firms like SJP can help protect your money from scammers. Where you invest can have a big impact on your financial future. It’s crucial to consider reputation, experience, and fees before settling on a financial adviser. St. James’s Place’s market-range charges and reputation indicate that it’s a trustworthy organisation.

Photo by Olga Lioncat