Latest news with #StJamessPlace
Khaleej Times
20-07-2025
- Business
- Khaleej Times
Foreign investors are warming to London's unloved stocks
Britain's stock market finally appears to be reversing years of underperformance against the rest of Europe, as a UK/U.S. trade deal, lighter regulation and cheap stocks deliver juicy returns that are starting to attract foreign investors. The FTSE 100 has gained nearly 10% this year to hit record highs this week, beating the STOXX 600, which is up 7.5%. On a year-to-date basis, London's blue-chip index has performed better than its European counterpart for the last six weeks, its longest such stretch since late 2022, when a weak pound beefed up revenues for the export-focused FTSE. This week, the financial regulator said it will roll out new rules to boost Britain's capital markets, while Chancellor Rachel Reeves told the financial industry to paint a less negative picture of UK stocks for would-be retail investors, as she seeks new ways to revive a stagnating economy. For foreign investors, the blue-chip index is already looking appealing given sterling's rally this year, while asset managers say the narrative around the UK is shifting. "We are seeing signs of big asset allocators coming back to the UK," Justin Onuekwusi, chief investment officer at St. James's Place. "I am talking about non-UK endowments, pension funds, asset owners, wealth managers who were all very underweight the UK post-Brexit," he said. In dollar terms, the FTSE-100 is up nearly 18% so far this year, set for the biggest dollar-denominated returns since 2009, compared with a 6% year-to-date gain in the SP 500, which has also hit record highs. The pound, up 7% this year against the dollar as investors turn away from U.S. assets in response to heightened U.S. policy uncertainty under U.S. President Donald Trump, acts as a headwind for FTSE constituents, 80% of whom get their revenues from overseas. Yet the index's wealth of large defensive companies, including healthcare, utilities and food retailers, help insulate it against swings in the underlying economy, like drugmaker AstraZeneca or supermarket chain Tesco It also has growth-sensitive resource stocks such as Anglo American and BP to tap into strength in oil, copper and gold. Britain meanwhile is one of the few economies facing less trade uncertainty with a U.S. trade deal in place. In contrast, the European Union faces the threat of 30% tariffs if there is no agreement by August 1. 'Tea and biscuit' "The UK stock market is the calming cup of tea and biscuit in an uncertain world. There's nothing fancy on offer, just reliable names that do their job day in, day out," AJ Bell investment analyst Dan Coatsworth said. Valuations for FTSE-100 companies have lagged those elsewhere in Europe for years. The 2016 Brexit vote accelerated that trend, with fewer companies using London to list their shares and fewer cropping up as MA targets, given the political and economic uncertainty that prevailed at the time. Now the UK market is catching up. The FTSE-100's 12-month forward price-to-earnings ratio of 12.5 is the highest for around five years, compared with 14.11 for the STOXX, the narrowest gap in around 18 months, LSEG data shows. The SP trades at a ratio of 23, a near-10 point premium to the FTSE, compared with under 2 points 10 years ago. "The relatively poor performance we've seen in the UK versus particularly the U.S. over the past two years has begun to unwind. We're in the foothills of that," Michael Stiasny, head of UK Equities, MG Investments, said, adding that the UK market has traded at a "significant discount". The pound is close to a four-year high against the dollar, but has weakened against the euro this year, offering a tailwind to the FTSE's big exporters. The EU is Britain's largest trading partner, accounting for 41% of exports in 2024, followed by the United States, with 22%, according to official data. It isn't all rosy. The British economy is flagging, inflation is well above the Bank of England's target of 2% and business activity and employment are slowing. Barclays data shows UK equities have seen a net outflow of $20 billion in 2025, although outflows have almost dried up in the last month, compared with Europe's year-to-date inflow of $13 billion and rapidly slowing inflows. Sebastian Raedler, head of European equity strategy and Bank of America Merrill Lynch, said he felt the FTSE's strong run was a function of the currency and in line with the rest of Europe. "Net-net, the FTSE has mildly outperformed, but I would say in an environment where there are a lot of big stories ... a 2% (out)performance of the UK this year would rank further down the radar from my perspective," he said, referring to the percentage gain in the FTSE in 2025 versus that of the STOXX.
Telegraph
17-07-2025
- Business
- Telegraph
It's no longer a rip-off, but I'd still never give my money to St James's Place
The two questions I get asked the most, once people realise what I do for a living, are 'Do you think I should invest in crypto?' and 'Can you recommend any financial advisers?'. My answer to the first question is, of course, that cryptocurrency is not an investment – but if you fancy a flutter, go for it, or stick a tenner on the horses. Paying for financial advice is anathema to a financial journalist. Avid readers of The Telegraph are well-armed to tackle the major personal finance questions: how much to save into a pension; what to invest your Isa in; where to find the best mortgage and savings rates; and how to cut your tax bill. There are some areas where you must, under the City watchdog's rules, speak to a regulated financial adviser – equity release, transferring a defined benefit pension and so on. But for other decisions, many people, perhaps the majority, don't have the time or inclination to work everything out themselves. The more complicated your finances, the more likely you would benefit from some hand-holding. Tax advice, in particular, can be invaluable, and a good adviser can save a client thousands of pounds quite easily. Which brings us to St James's Place, Britain's biggest wealth manager. It claims to have more than one million customers, and manages a record £190bn. Its target is the 'mass affluent', those with decent pensions and savings, but not the mega-wealthy. However, for years, it has been dogged by claims that its fees were high and opaque. It also operated a controversial 'early withdrawal charge', which could be as high as 6pc. In countless articles, it defended this charge, and claimed it wasn't an exit penalty, but simply a way of recouping fees it would otherwise forgo. St James's Place also claimed the charges offered 'strong client value', and that customers understood it (which was total nonsense – I could barely get my head around it). The issue came to a head last year when the wealth manager was forced to set aside £426m for compensation when it discovered some clients had not been receiving annual reviews from their 'partners', the name for its army of self-employed advisers. Clearly, it needed to change. This week, St James's Place finally confirmed a new charging model from August 26 that splits out the costs of advice, the product (pensions, bonds, Isas and so on) and fund management. This should make it far easier to compare St James's Place with other wealth management firms. The exit charge has been abolished for new customers. It has also lowered its initial fee, the charge applied when you first become a client. Previously, customers paid a whopping 4.5pc of the wealth they were handing over, plus an ongoing charge of 0.5pc. This has been replaced with a tiered initial fee of 3pc on the first £250,000, 2pc on the next £250,000 and 1pc above £500,000. The ongoing charge has risen to 0.8pc. St James's Place says a new client with £400,000 to invest would pay £10,500 as an initial advice fee, plus around £3,000 each year for ongoing financial advice. Product and fund fees are charged on top. Under the old model, the same £400,000 in a pension would have been charged £18,000 initially (but spread over six years) plus £1,900 ongoing each year. While the new charges are roughly in line with the rest of the industry, it still feels like a huge chunk of change to be handing over. And remember, with the kind of percentage fees commonly used by wealth managers and stockbrokers, if your investment grows, you pay more in fees. This is despite the fact that in many cases, your wealth is being inflated by global markets, not the skill of an adviser or fund manager. St James's Place is also what is known as a 'restricted' adviser, meaning it will only ever recommend certain solutions or investments. A true independent financial adviser can, in theory, recommend anything under the sun. My financial needs are simple. A stocks and shares Isa filled with passive tracker funds that cost pennies per year, and a company pension where I put in as much as I can afford. Increasingly, the cost of investing is coming down. Brokers such as Interactive Investor charge fixed fees, which can be incredibly cheap depending on how much you have saved. But there will always be people who need more help. The Financial Conduct Authority has finally recognised this, and is changing its rules to allow pension and Isa providers to offer basic advice to help people avoid the biggest mistakes. Currently, DIY platforms have been too scared of compensation claims to give so much as a nudge to customers. If you do want fully-fledged advice or wealth management, make sure you wholly understand what you're paying for in pounds and pence. Ask how many reviews you will get, and whether you should be in passive funds rather than expensive active ones. Lastly, haggle on the fees. The more money you have, the harder you can squeeze.
Times
15-07-2025
- Business
- Times
SJP's delayed cut to investment fees will kick in next month
St James's Place will begin the long-awaited overhaul of its prices next month, bringing in cheaper fees for some customers. After criticism of its charging structure, the UK's largest wealth manager initially said it would reduce fees and make them more transparent in October 2023, then later told staff that it would implement the changes in May this year. But the plans were postponed after pushback from its advisers, who said that there wasn't enough time to adapt their systems. St James's Place (SJP) has now said that the changes will take effect from August 26 and apply to more than one million investors, who use the firm to manage their savings and pensions. SJP's fees have been under scrutiny for years amid claims that they were opaque and could be expensive. Last year the company set aside £426 million to refund clients who had paid for advice that they never received. The decision to overhaul the charging structure came after the City watchdog, the Financial Conduct Authority (FCA), brought in new consumer duty rules which demand 'good outcomes' for clients. • From threats to inviting us to tea: SJP changes its tune (and fees) SJP is changing its initial advice fee of 4.5 per cent to a tiered structure: the first £250,000 will cost 3 per cent, the next £250,000 will have a fee of 2 per cent and anything over £500,000 will be 1 per cent. For example, if you had £400,000 you would pay 3 per cent on the first £250,000 (£7,500) and 2 per cent on the next £150,000 (£3,000). You would pay a total of £10,500 for the initial advice, which works out at 2.63 per cent. The firm's ongoing advice fee of 0.5 per cent — which typically pays for a yearly review — is increasing to 0.8 per cent. This is roughly in line with the rest of the industry, but will make things more expensive for loyal customers who will not benefit from the reduced cost of initial advice. SJP customers will also pay an ongoing product charge for their investments. Bonds and pensions cost 0.35 per cent a year, decreasing gradually for larger sums down to 0.25 per cent for any money over £3 million. Isas and unit trusts cost 0.27 per cent, decreasing gradually to 0.17 per cent on amounts over £3 million. The charges for fund management have also been reviewed. The amount charged varies but SJP said it ranges from 0.09-0.69 per cent for 95 per cent of its funds. As part of the overhaul, SJP has split its charges into three components: the advice charge, the product charge and the fund charge. While this makes it easier for new customers to work out what they are paying for, it means that comparing the new fees to the old system is complicated. Part of the controversy around SJP's old fees was their lack of transparency. • St James's Place bullied and belittled me, but I was right all along SJP said that a very small group of customers may end up paying more due to the prices of certain funds increasing during the restructure. The company said that moving to the new charging structure had required an 'extensive IT infrastructure build'. James Rainbow, the chief executive of SJP Wealth Management, said: 'We see the real value in the relationship between our clients and their advisers every day. These changes will make it much simpler to see just how competitive we are on a like-for-like basis for the fully personalised, trusted advice our advisers provide. 'It's a good thing for our advisers, our business and most importantly our clients, the majority of which will benefit from lower overall charges over their relationship with us.'
