AJ Bell

[Mike Dennis]

Please post in this thread any information/news you may have about this broker

[Cliff Weight]

My understanding of their services is

If the voting with a click of a button also applies to AGMs where there is not a Corporate Action – customers would need to send us a secure message with their votes.

Whether investors are notified or can ask to be notified when an annual report is published. (not just corporate actions.) – I am afraid there is no option to be notified when an annual report is published, even when requested.

They notify investors on the below:

– All EGM’s, no matter what the resolutions are
– All Annual General Meetings where there is a proposed Corporate Action in the resolutions

Above events can be voted on with a a secure message with their votes. If there is a corporate action then you can vote with a single click.

You can still cast your vote on other events by sending them a secure message with your votes.

It is free to vote and they do not levy any charges on your votes.

As for all AJ Bell investors who do not vote across all meetings (announced by us or not),the AJ Bell nominee do not vote at all.

[Mike Dennis]

Some interesting data from AJ Bell’s most recent trading update for quarter ending 31st December 2020.

Total platform customers closed at 298,053, up 31% over the last year and 6% in the quarter of which:-

o Advised customers of 112,308, up 12% over the last year and 3% in the quarter

o D2C customers of 185,745, up 46% over the last year and 8% in the quarter – this is their YouInvest (DIY) platform.

This looks like a new customer acquisition rate well above market rates. I can only assume market share is being grabbed at the expense of HL and others?

So, what is it that AJ Bell are doing right in their service offer?

[Douglas McNeil]

I have been with AJBell since pre IPO.
Excellent website.
Easy to login and use.
Research information on companies like share price history, reporting dates, dividends paid, Owners, Directors dealings easy to follow. Although there can be a few mistakes in the information you would probably cross check it. No worse than other sites.
Good at communicating when dividends are paid, contract notes ready and when corporate actions are pending via secure messages and reply via secure messages.
Information on top 50 buys and sell trades per day, week and month available. Access to Shares magazine every Thursday morning(8am). Easy to use for a Dealing and SIPP and ISA account. Low charges of £4.95 per trade. Recently have real time pricing for main FTSE shares if you wish.
My only other account, is with Barclays from about 1990. I use it less and less and will eventually stop using it. The website has changed three times with no obvious improvements. The new website includes Banking, Insurance etc. So useful if you are a banking customer and use the App.
Research information is lacking in value. It is difficult to find the contract notes and the data is poorly arranged. Logging in has now improved(I assume after complaints). If you need to contact someone re problem you seem to get the person that does not know the answer. I phoned very few times over the years but it was not easy getting an answer.
So I can only compare Barclays(I give them 2 out of 5) and AJBell (I give them 5 out of 5)

[Mike Dennis]

In reply to reply #16551

Thanks Douglas – that’s good to know. I have never used AJ Bell’s YouInvest platform but it sounds like they provide a reliable and fairly comprehensive service.

Out of curiosity, I just went on their website to check their pricing. It all seems quite mysterious in that you have to tell them what you intend to hold in shares and funds (unit trusts, OEICs and structured products) separately and how many trades of shares and funds you intend to execute per year before they will reveal their pricing structure. Having done this they revealed that their custody holding charges are a percentage of holdings and the charge is considerably more for funds than for the equivalent holding in shares. For example, the custody charge for £250k of shares is £120 pa but for the equivalent amount in funds it is £625 pa. There is no obvious reason why it should cost them over 5 times as much to hold clients’ funds as it does to hold their shares. HL have the same pricing structure and its one of the reasons I switched my largest portfolio out of HL and into ii a couple of years back. In competitive markets, prices ultimately tend to reflect underlying costs so I do think YouInvest and HL will both have to drop this arcane pricing structure at some point due to market pressures but they are clearly doing well enough at present not to feel any need to do so.

---

[Mark Bentley]

I’ve been with AJ Bell since 2002, when they were “SIPPDeal”. Overall, I find their customer service very good and, as Douglas says, most trades are executed efficiently and good documentation is provided.

Drawbacks are that they really offer only electronic trading for smallcap stocks. Generally when I try to execute a hard to place trade with their telephone service, their dealers only seem to use the same online facility I can use myself. When I first opened an account, they didn’t do the dealing themselves but outsourced to James Brearley, who could offer a proper telephone dealing service and discuss execution with market makers on your behalf. I also find their non-UK dealing facilities limited. Whilst I do hold one Canadian listed stock with them and can trade it fairly readily, there’s another large cap TSX stock (IVN) which they can’t deal for me – so I have to deal that one in my ISA with ii, who offer a very comprehensive international dealing service, offering direct access to a broad range of markets.

My SIPP with AJ Bell is now in drawdown and they process the monthly payments efficiently and at a reasonable annual cost.

Mike, for shares in a dealing account, the custody charges are capped at £42 p.a.: https://www.youinvest.co.uk/dealing-account/charges-and-rates You’re right about the fund costs, though.

[Douglas McNeil]

Mike
Thanks for reply. I checked over the details of my charges and downloaded a charge sheet. It said charges for shares are 0.25% but max of £3.50/month so max £42 per year.
Also funds are 0.25% up to £250k but 0.10% if £250k to £500k and less for larger funds. SIPP costs are higher. Hope this helps but not sure if the information is available without a login. Hope you can confirm this information if you wish to proceed.

[Mike Dennis]

In reply to reply #16561

Thanks Douglas and thanks Mark

---

[Marthin Mostert]

In reply to reply #16560

I agree with the positive comments made by Douglas and Mark. Unfortunately they do charge a % fee of fund holdings, unlike ii. Over the years I reduced the fund holdings in my portfolio as I prefer to invest in investment trusts and ETFs and it reduced my platform charges as there is a cap on direct share holdings, investment trusts and ETFs. But I agree with your comment that it doesn’t make sense to charge more for holding funds rather than direct share holdings or investment trusts.

I have a SIPP, ISA and Trading account with AJ Bell and unfortunately the charges are separate for each investment wrapper – unlike ii where you pay one flat fee for the ISA and Trading account.

I sometimes wonder if I’m an outlier for using two trading platforms – and therefore incurring higher costs? My reason for this is that the Financial Services Compensation Scheme only guarantees £50,000 of investments in the event that the platform provider goes bust and I don’t want to put all my eggs in one basket. Any comments or suggestions about this? I wonder of SIGnet or ShareSoc has taken this up with the FSCS? (I joined SIGnet only recently)

---

[Mark Bentley]

Hi Marthin,

You’ll be pleased to hear that the FSCS compensation limit was raised to £85,000 for investments in 2019, to match the protection for savings. See https://www.fscs.org.uk/what-we-cover/investments/.

Note also that ShareSoc is a campaigning organisation, whereas SIGnet is not. SIGnet’s sole focus is on investor groups but, following the merger between SIGnet and ShareSoc, SIGnet members are also associate members of ShareSoc by virtue of the their SIGnet membership and so can raise their concerns with ShareSoc.

Raising the compensation limit further is a double edged sword. Whilst, obviously, an increased limit would offer more protection for investors with larger accounts, it is not cost free. Payouts by the FSCS are funded by a levy on the firms they cover. That levy has been increasing steeply in recent years. See https://www.fscs.org.uk/media/press/2021/may/21-22-levy-forecast/. Those additional costs are likely to be passed on through higher fees from brokers/platforms, ultimately.

I have been assisting shareholders from a number of collapsed brokerage firms, notably Beaufort and SVS. It is reassuring that, despite the collapse, pretty much all client assets were recovered and the FSCS only had to fund the costs of the Special Administration for those firms and their clients. ShareSoc pushed for those costs to be distributed equally between all affected client accounts. That resulted in the cost per account being well below the FSCS compensation limit and hence being fully covered. The chief exception was in rare cases where clients held large amounts of cash in their accounts, because the Special Administration Regime (SAR) requires administration costs for the recovery of cash to be distributed pro-rata to the cash amount for each client.

I am planning to launch a campaign for reform of the SAR for ShareSoc in the near future, as the current regime is excessively slow and costly IMO (as well as containing the cash anomaly).

The FCA monitors the safe custody and segregation of client assets closely, requiring (at least) monthly reconciliation reports and annual independent audits from brokers/platforms. For this reason a loss of client assets is highly unlikely, even when a broker collapses.

Best,
Mark

[Mike Dennis]

I note that final results for AJ Bell are out today and they are reporting healthy growth rates in both advised and DIY customers. Makes interesting reading although I haven’t yet had time to go through all the details to see what it all means – https://www.investegate.co.uk/aj-bell-plc–ajb-/rns/year-end-trading-update/202110210700037268P/

[Author]

Posts