Is it better to use a face-to-face service through an SJP partner or paying lower rates using something like Wealthify, but with no advisor check-ins?

31 March 2022

Question by Marianne

Is it better to pay 3% on each investment for the first 3 years plus an ongoing charge of 0.5% of the total for a face-to-face service through an SJP partner... or is it better to pay lower rates using something like Wealthify, but with no advisor check-ins? Do the SJP fees sound reasonable in exchange for the human advisor?

Answered by Robert Powell

Hi Marianne,

It isn't possible to answer your question because what you need to know is what the effect of the charges will be on the investment after performance - and you don't know that until the performance has happened.

Using your figures, it might be at the end of year 1, you have had an SJP return of 6%, less 3% and 0.5%, totaling a net return of 2.5%.

On their website Wealthify state 'We charge a simple annual fee of 0.6% for managing your investments. Unlike traditional providers, we won’t charge you to deposit or withdraw money, transfer or close your Plan'. So if you return 3.5% with Wealthify less 0.6%, then your net return is 2.9%.

On this basis Wealthify net performance would be better even though the gross performance is lower.

However, with an adviser you will receive human interaction so focusing just on cost maybe be doing yourself a disservice. The adviser will discuss other areas of financial planning to you, maybe you could be more tax efficient or consider other areas? Having a personal available to talk to, bounce ideas off and help with any concerns can be invaluable.

Therefore, it isn't solely about the charges (I'm not saying they aren't important) but rather the service that is provided.

Now, that said, it is common knowledge in the industry about the SJP charging structure. Please be aware that SJP do have 'early withdrawal charges' on certain products in the first 6 years, so make sure you also consider the costs of entry and the costs of exit.

Hope that helps.



Answered by

Robert Powell

Senior Chartered Financial Adviser

I am originally from Epsom but now call Brighton home. I have been advising since 2011, qualified as a Chartered Financial Adviser and also hold the title Fellow of the Personal Finance Society.