Wednesday, 10 August 2016

New Charges from AJ Bell

This week AJ Bell have announced new charges for their customers from 1st October 2016. The new charges apply to all types of account - SIPP, ISA, Dealing Account and Junior ISA.


I have held my sipp with AJ Bell for many years. The changes are as follows:

The tiered custody charge of between £5 and £25 per quarter will be abolished.

Charges for holding funds will be increased from 0.20% to 0.25%. Therefore, with a typical funds-only portfolio of say £50,000 the extra charges will be £25 p.a. I believe those with larger portfolios will take a hit as currently the charges are capped at £200 but with the new charges this cap will no longer apply and the 0.25% applies up to £250K then 0.10% up to £1m.

The dealing cost for buying/selling funds will be reduced from £4.95 to £1.50.

For those in drawdown who do not take an income, the £60 admin charge will be dropped.

The biggest change is for those holding shares, investment trusts and ETFs. At present they pay no platform costs apart from the dealing charges to buy/sell. Under the revised structure, they will pay a new custody charge of 0.25% but this will be capped at £25 per quarter.

So, those with a portfolio of shares, ITs and ETFs to the value of £40,000 or more will now pay an additional £100 per year. This option however may be worth looking at for those with larger fund-only portfolios who will be able to potentially save up to £500 p.a.


As with sipps, the dealing charges for funds is reduced to £1.50 which will make regular drip feeding more attractive. Platform charges for funds increases to 0.25% however, those with larger portfolios will be adversely affected as current charges are capped at £200..

A 0.25% new custody charge will also apply to portfolios holding shares, ITs and ETFs however this will be capped at a lower rate of £7.50 per quarter (£5 junior ISA) compared to the £25 for sipps.

So, those with a typical portfolio of £50,000 will pay an extra £25 per year for holding funds but will save £3.45 for each sale or purchase which could work out as a net saving for many. Those holding mainly shares etc. who currently escape the platform charges will now pay £30 per year extra.

The same charges will apply to the new Lifetime ISA when introduced in 2017.


It seems to me that the people most affected will be those with larger portfolios over say £100K holding mainly funds as their charges are currently capped at £200 per year for both ISA and SIPP. With the new charges they will pay 0.25% on their portfolios up to £250,000.

I have my flexi-drawdown SIPP and ISA with AJ Bell and hold a mixture of funds - Vanguard Life strategy & Vanguard UK Equity Income - investment trusts and shares. These days, I do not do a lot of dealing so the reduction in the charges for funds will make little difference. If I were building my portfolio, it would possibly be more attractive.

I have tended to hold mainly investment trusts in my sipp which had the added advantage of avoiding platform charges but the changes will mean it would be no more expensive to hold funds so I may well be looking at a switch into the Vanguard Lifestrategy for my SIPP.

With my ISA, I am slowly selling down my shares but hold a significant percentage of my portfolio in investment trusts. There will therefore be additional charges but these will be capped at a maximum of £30 per year so it’s not so big a deal.

Last year I opened a second ISA with Halifax Share Dealing for my funds as the platform charges were only £12.50 per year which seems like very good value for most portfolios where there will be little or no dealing. It will be interesting to see if there is any knock-on effect with other platforms.

Feel free to leave a comment below if you will be affected by the new charges.


15/8/16 Here's a link to a response from Andy Bell posted on the Motley Fool board


  1. Doesn't the removal of the SIPP charge cancel out the new shares charge?

    1. Mike,

      Yes, I think you are correct - the removal of the tiered custody charges which for most portfolios will be £100 p.a. will be cancelled out by the new charges of 0.25% capped at £100 p.a. for shares etc. Looks there will be some savings for the smaller portfolios below £40K.

  2. As the value of my SIPP is only small, my SIPP custody charge is currently £60 (£15/quarter), with my ISA and dealing account free of charge.

    After the fee changes, I will end up paying around the same amount in total - fees will be reduced for the SIPP but I will be charged for my ISA and dealing account.

    I guess I can live with paying a maximum of £30 a year for the ISA as AJ allows me to invest in ETFs cheaply at £1.50.

    The charge on the dealing account is annoying though, so I will look to gradually run that down, shifting shares/ITs between my SIPP and ISA where I can.

    Interesting about funds now being cheaper to invest in - might have to review this at a later date.

    1. weenie,

      Looks to be a small impact for you at current levels.

      The changes seem to be making more of a level playing field between funds and shares etc. but those with the larger funds-only portfolios will need to give the increased charges some serious consideration. Seems to be getting more along the HL approach with capped charges for shares etc but no cap on funds.

  3. This is a big problem for me as the 'majority' of my YouInvest SIPP are Vanguard OEIC's with a 'little' in ETF's. My annual expenses (ex any trading costs) will rise from £300 to over £600!

    This is the 2nd time they've changed their expense structure. Last time I accepted it, after trying to negotiate with YouInvest, but they've taken it a step to far this time. I'm assessing alternatives now.

    I'm wondering why they're trying to push away those with reasonable size portfolio's...

    1. RIT,

      Sorry to learn of your bad news. When I realised those investors with large portfolios in funds would take a hit with the new charges I was wondering how you might be affected. £300 per year extra is quite a big uplift to your annual charges %.

      I suppose it will make sense to consider a switch to a cheaper platform if you want to stay with the same funds. As you say, why do they not really want the larger fund portfolio clients - doesn't make much sense but I am sure Andy Bell will have looked carefully at all the angles.

      Good luck with your search for a better deal.

  4. Hi DIY,

    I watched this with interest. At present I use TD as I only have investment trusts, ETFs and shares held, so I only pay a dealing charge and nothing more. From next year I will be looking to find another alternative to spread my risk - I had it as far as Interactive and SelfTrade to keep my costs down (ETF only ISA) but it does make me wonder how they will change their rates in the future and the hassles of moving it around...

    I wait with interest...

    1. Robert,

      I have seen a few comments from investors who have recently moved to AJ Bell and now find the goalposts have moved and they are facing a big fee to move again. It may make sense to wait and see if there is any response from other platforms.

    2. Hi DIY,

      Spot on - I will do what I do best... sit on my hands for now and do nothing! :)
      London Rob

  5. This change is a mirror-image of a number of other platforms but I wonder if anyone can help clarify why funds have a higher fee/uncapped compared to shares (IT, ETF etc)?
    Surely their systems have the same 'links' for dividends/income, any corporate actions etc?
    It would appear there is more work involved in fund holdings than shares if charges are to be believed.

    1. Pete,

      I am not sure whether it costs the platforms more to offer funds compared to shares and ETFs. They are far more popular and if there is little to separate the big providers, I guess they can collectively get away with these uncapped fees.

      The market leading platform is FTSE listed Hargreaves Lansdown and AJ Bell now seem to be adopting a similar charging structure. Neil Woodford is an investor in AJ Bell which is currently a privately owned operation and I am speculating the new charges may be preparing the ground for a public listing? Time will tell...

  6. For the same 0.25% pa platform fee - albeit no maximum cap [or minimum charge for that matter] - I've noticed that Cavendish Online offer a reasonable range of investment trusts (and ETFs) and their dealing charges for those are just 0.10% (again no min/max).

    1. David,

      Yes, could be a decent option for some. I am not sure what ITs and ETFs are available but the dealing costs seem reasonable at 0.1% (£1.00 per £1,000). Also they do not offer benefits such as income drawdown so at some point investors would need to transfer out to another sipp provider which may be a hassle?