Splitting your money is not the same as splitting your risk

Let's say you have a St. James's Place pension and an old workplace pension from a previous job, with no contributions still going in. We've talked it through, and the SJP one is working harder for you: better fund choice, better forecasted outcome. Maybe the sensible thing is to bring the old pension across.

You know that. I know that. But you hesitate, because moving it across would mean all your pension money sits in one place.

This conversation comes up most weeks, in one form or another. The phrase I often hear is, "I don't want all my eggs in one basket."

I completely understand the instinct. "Splitting the risk" feels like the sensible thing to do, and I'd never dismiss it.

But in reality, even if all of your money was with SJP, it wouldn't be all in one place. Diversification and protection are built in. 
 
And you might be putting it more at risk by having it in places that aren't looking after it. Let me explain.

Transferring pensions from other providers is not always appropriate and so does not work in all cases. We would rarely look at transferring as a first option and would only recommend in exceptional circumstances. Considerations such as guarantees and other benefits would need to be viewed to ensure suitability.

A different way to look at it

Imagine for a moment you're shopping at Selfridges. You don't buy clothes made by Selfridges. You buy Burberry, or Paul Smith, or Mulberry, or Margaret Howell: different brands, all under one roof.

Selfridges has chosen which brands to carry, because each one offers something the others don't. They have different aesthetics, different price points, different signature pieces. There's no overlap. That's the point of having them all there.

And within each brand, there's a full range. Burberry isn't just trench coats; It's jackets, knitwear, trousers, scarves, leather goods. Different fabrics, different weights, designed for different seasons and different occasions.

That's the closest comparison I have to how investing with SJP works.

We've chosen the funds we offer deliberately. Each fund is different from the others, no overlap. And each fund is itself diversified across asset class, sector, geographical location, and fund manager style.
 
For example, two managers working within the same asset class can take very different approaches. One may focus on high-quality growth companies with strong earnings momentum. Another may take a value-oriented approach, looking for companies they believe are undervalued in the market.

In periods of strong economic growth, when investors favour innovation and earnings growth, the growth-focused manager may outperform. In periods of higher inflation, rising interest rates or market uncertainty, value-oriented companies may perform more strongly.

By combining complementary styles within the same fund, we aim to reduce reliance on any one market outcome and produce a more balanced return over the long term.

So, when you have your money in three SJP funds, each one is independently diversified and was chosen because it does something the others don't.

None of this removes investment risk. Diversification is there to manage those ups and downs rather than remove them, which is why investing tends to suit money you can leave in place for a number of years, but you need to consider that the value of any investment can fall as well as rise, which means you could get back less than you put in.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Where the comparison runs out

And here's where the Selfridges analogy comes to an end.

If Selfridges shut its doors tomorrow (heaven forbid), the brands inside would carry on trading, but you'd be left with whatever you'd already bought, with limited recourse. There's no statutory protection sitting underneath the relationship between you and Selfridges.

But there is protection sitting underneath your investments with SJP. Pensions and UK bonds held with SJP are both covered by the Financial Services Compensation Scheme in full, without an upper limit. Unit trusts and ISAs are protected at 100% on the first £85,000, and cash held through SJP's cash management platform, powered by Flagstone, at 100% on the first £120,000 per institution.

The investments themselves are held separately from SJP as a company, under regulatory rules designed for exactly this concern. The whole arrangement sits inside a framework overseen by the Financial Conduct Authority, built specifically around the question of what happens to your money if something happens to the firm holding it.

Please note that the services provided by Flagstone are separate and distinct to those offered by St. James's Place.

When having money elsewhere is the right answer

All of that said, there are situations where I'd recommend keeping money outside SJP.

Day-to-day banking sits outside this. Your current account, the money you use for bills and groceries, lives at a high street bank. That's not what SJP is for.

Cash savings and your emergency fund are a different question. SJP clients can access Flagstone, a cash platform offering instant access at competitive rates, with FSCS protection sitting underneath. So, if you'd like that money in one place too, there's a way to do it without giving up access or return.

And occasionally, a client wants to manage a portion of their wealth themselves. I have clients who do exactly that, and where it's a conscious choice rather than a worry about putting too much in one place, it's a perfectly reasonable decision.

What I'd push back on is the reflex, the idea that splitting your money across providers is the safer thing by default. It isn't.  

The harder question

Here's another problem I see often: a client tells me they don't want too much money in one place, but they are holding most of their wealth in places where no one is advising them.

They have ISAs that have been sitting in the same funds for a decade, workplace pensions on default allocations, and hundreds of thousands of pounds split across three different banks because it "felt safer" to spread it out.

Nothing about that is more diversified. The funds inside those products are often holding the same underlying assets as the next provider's funds. 

And the bigger problem is that no one is looking. No one is asking whether the allocation still fits. No one is rebalancing when markets move. No one is checking whether the wrappers are still tax efficient as the rules change.

Often, the only money that's being regularly reviewed is the part that sits within SJP.

The real question

So, if you choose to invest more of your money with SJP, you don't need to worry about having all your eggs in one basket. Because if your basket IS SJP, the eggs inside are already well diversified, and the basket itself has protections built in.

Here's the real question you need to ask: "Is my money being looked after?"

About the author

Laura Joyce is a financial planner specialising in comprehensive financial strategies for professionals and families in the Bristol area. With expertise in inheritance tax planning, intergenerational wealth, and strategic financial management, Laura helps clients create clarity, confidence, and balance in their financial lives.