SJP’s recent announcement about future charges
At a glance
On 17th October 2023, SJP announced that they are going to change the way they will charge 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 their 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 us.
St. James’s Place advise over 900,000 clients, who collectively trust them to plan, grow and protect their financial futures.
Over their 33-year history, they have operated with charging structures that they are confident have served clients well.
They understand some people may have found it difficult to compare their charges with those of other providers. And while they feel it has served, and continues to serve, clients well, the Early Withdrawal Charge (EWC) structure could be simplified.
SJP have therefore decided to make some changes that will deliver further value for years to come.
What are the changes?
Currently, SJP’s 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, SJP’s overall charging structure will change. This is because the way SJP sets out its charges has been different to other providers so they’re changing this to ensure simplicity and comparability.
Ahead of the 2025 changes, in 2024, SJP’s 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 SJP’s 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.
SJP charges on Bonds and Pensions currently have an Early Withdrawal Charge instead of an explicit initial charge (as they have on their ISAs and Unit Trusts). Although they believe this has served clients well, it can seem complex and different from the charging structure for Unit Trusts and ISAs, so will be removing it from their 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 the Unit Trust and ISA charges).
2. SJP will be separating their charges into component parts.
SJP 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 SJP 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 SJP’s fund charges will change
SJP continually monitor and review their products and charges. As part of this process, they 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 SJP 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 you to talk it all through with us 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 us as soon as you can. There is a range of support available to you, and 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 us.
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.
SJP Approved 17/10/2023