St James Place : Our recent announcement about future charges

• News

17 Oct 2023

4m read

Claire Blackwell

Chief Client and Reputation Officer

We recently announced some changes to our future charges. In this article we give a summary of what the changes are, when they will come into effect, and when more information will be available.

At a glance

On 17th October 2023, we announced that we are going to change the way we will charge our clients in the future.

These changes will ensure that St. James's Place continues to offer clients good value for money. They will also ensure that our charges are easy for you to compare, and simple to understand.

The most important thing to know is that nothing is changing immediately, and that generally, these changes will reduce existing clients' charges.

The changes will come into effect over the next two years. Between now and then, if you are already an SJP client, you will receive help and guidance around what's happening from your SJP Partner.

Here at St. James's Place, we advise over 900,000 clients, who collectively trust us to plan, grow and protect their financial futures.

Over our 33-year history, we have operated with charging structures that we are confident have served clients well.

We understand some people may have found it difficult to compare our charges with those of other providers. And while we feel it has served, and continues to serve, clients well, the Early Withdrawal Charge (EWC) structure could be simplified.

We have therefore decided to make some changes that will deliver further value for years to come.

What are the changes?

Currently, our charges are often expressed as an all-inclusive charge that combines the advice, product or platform, and fund charge. The planned changes will make it easy to compare charges for each of these elements across providers.

These are the main areas where things will be different in the future.

In 2025, our overall charging structure will change. This is because the way SJP sets out its charges has been different to other providers so we're changing this to ensure simplicity and comparability.

Ahead of the 2025 changes, in 2024, our fund charges will change for new and existing investments. The changes are based on taking a consistent approach across all investment products, to better align the price paid with the value received.

How our charging structure will change

There are three parts to the changes:

1. Replacing the Early Withdrawal Charge with an explicit initial charge on new Bond and Pension investments.

Our charges on Bonds and Pensions currently have an Early Withdrawal Charge instead of an explicit initial charge (as we have on our ISAs and Unit Trusts). Although we believe this has served clients well, it can seem complex and different from the charging structure for Unit Trusts and ISAs, so we will be removing it from our charges. The future charging structure will mean that new Bond and Pension investments will have an explicit initial charge and ongoing charges (as is already the case with our Unit Trust and ISA charges).

2. We will be separating our charges into component parts.

We are separating the charges to more clearly show their component parts - ensuring they're simple to understand and easy to compare with other offerings from other providers.

The components of the charges are:

- The advice charge,

- The product/platform charge,

- The fund charge.

3. Realigning the component charges.

These components of the charges have also been reviewed to ensure they more accurately align to where you get the most value.

When we refer to value, there are three areas that contribute most to client outcomes:

No existing client will pay higher ongoing charges on their existing investments as a result of separating out the charges, and for many the charges will indeed reduce. Within this change, some components of the charge will be higher, some will be lower than today.

How our fund charges will change

We continually monitor and review our products and charges. As part of this process, we are making some changes to the future fund charges.

The changes to future fund charges will result in some charges going up and some going down. The impact across SJP's fund range will be broadly neutral. The impact for you will differ based on the investment products you hold, as well as the funds you're invested in.

These changes will occur in 2024 and we will specifically communicate with all clients before making any changes.

When will the changes happen?

Nothing is changing now. This will all happen over a period of two years, with the fund charges changing in 2024, and the charging structure changing in mid-2025. So there is lots of time for clients to talk it all through with their SJP Partner and plan for the future you want. SJP will also be sending communications to clients throughout that time to explain the changes in more detail.

Things can change quickly, so if you experience a life-changing, or even just challenging, event which has an impact on your financial situation, you must speak with your SJP Partner as soon as you can. There is a range of support available to you, and together with your SJP Partner, we can make a plan.

If you have any questions about this, or to find out how these changes may impact you and your investments, please speak to your SJP Partner.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

About the author

About the author

Claire Blackwell is the Chief Client and Reputation Officer for St. James's Place. In this role Claire is responsible for ensuring that St. James's Place fully understands the evolving needs of clients, and that the SJP Partners are best placed to serve their clients through strong engagement and data. She is responsible for both the corporate brand proposition and all marketing services provided to the St. James's Place Partnership, which is a community of over 4,500 advisers. Claire chairs the St. James's Place Proposition Executive Committee which has oversight for all products and services made available to St. James's Place clients. She recently chaired the Executive Steering programme for ensuring that SJP is able to meet the requirements of Consumer Duty.