We are paying 3% on annual investments and c.2% per year of fund value in charge - is this reasonable?

09 February 2022

Question by Andrew

We are paying 3% on annual investments (was 5% for first 3 years) and approx 2% per year of fund value in charges with St James Place. The investments are performing well but we think the charges are excessive and greedy. Could you offer an opinion please?

Answered by Dan Willers

Hello Andrew,

Thank you for reaching out via Boring Money. That's a great question and you are right to challenge the fees you are paying. No matter what it is in life you are paying for, whether it be a new car, or even your gas and electric, you want value for money. You could argue even more so with investing, as wealth it was you work so hard to accumulate. My first question to you is, what value to you feel you are getting from your adviser and St James's Place?

You should expect to be seeing your adviser at least once if not twice a year for in-depth reviews. These reviews should focus on you, your circumstances, your financial aspirations and then your investments. Are they doing what they should be, are they on track to help you achieve your financial objectives, are you invested appropriately versus your investment risk profile. Does your adviser make you feel like they have your best interest at heart. Are they there when you need them. If you can answer yes to all these questions, then you have a great adviser. That said, you are still paying with the sounds of it above average even for a first class service.

To be more specific about fees which is the point to your question, the initial fee's you have paid over the first 3 years are high compared to averages across the industry. Even 3% per annum is on the expensive side. On average you will see financial advisers charge anywhere between 0.5% to 1% per annum of the funds they look after as their fee. The other charges then relate to your investments. Total fees (adviser and investments) in the region of 1.8% to 2.5% per annum are what you should be looking to pay. I will caveat that with it depending on your circumstances and the complexity of the advice / planning you need.

I actually look after a number of clients who have been previously invested with St James's Place, and charges have often been a concern for those clients. I would be more than happy to have a further chat with you about this to see if I can help add any additional value to your current investments and potentially save on costs. Don't hesitate to get in touch if you feel this would be of interest for you.

I hope this has answered your questions sufficiently?

All the best and take care.

Dan Willers

Answered by

Dan Willers

Chartered Financial Planner

I've been in financial services for more than 18 years and have been with my current firm, Robertson Baxter, for six years. I specialise in investments, pensions, tax planning protection and estate planning, but first and foremost focus on building long-term relationships with my clients.