AJ Bell will halve fees for buying and selling ETFs, shares, investment trusts and bonds as part of a range of cost reductions next year.
The costs customers pay to trade exchange-traded instruments on its direct-to-consumer platform will be slashed from £9.95 to £5.00 per trade, effective 1 April 2024.
Dealing charges for frequent traders – those placing 10 or more trades in the preceding month – will be cut from £4.95 to £3.50 per trade.
The platform added it would also reduce the annual custody fees for some higher net worth accounts using its funds and shares service.
Charge tier | Current charges | Reduced charges from 1 April 2024 |
Assets up to £500k | 0.20% | 0.20% |
Assets from £500k to £1m | 0.20% | 0.175% |
Assets from £1m to £1.5m | 0.15% | 0.15% |
Assets from £1.5m to £2m | 0.10% | 0.075% |
Assets over £2m | 0.00% to 0.025% | 0.00% |
Effective from the same date, AJ Bell will increase interest rates on cash across the board in SIPP drawdown accounts as well as ISA and SIPP accumulation accounts with balances exceeding £100,000.
ISA | SIPP (accumulation) | SIPP (drawdown) | ||||||
First £10,000 | £10,000 to £100,000 | £100,000+ | First £10,000 | £10,000 to £100,000 | £100,000+ | First £10,000 | £10,000 to £100,000 | £100,000+ |
1.95% | 2.45% | 2.70% | 3.2% | 3.70% | 3.95% | 3.45% | 3.95% | 4.45% |
The news coincides with the Financial Conduct Authority (FCA) finding some platform operators and advisers retain some of the interest earned on customer client balances “which may not reasonably reflect the cost to firms of managing the cash”.
The UK’s financial watchdog said firms have until 29 February 2024 to ensure they are providing fair value customers and “if they do not, we will intervene,” the regulator said in a statement on Tuesday.
Commenting on the fee and interest overhauls, Michael Summersgill, CEO of AJ Bell, said: “Our philosophy has always been to share our economies of scale with customers as we grow – an approach that is very much aligned with the consumer duty.
“We have been planning these latest pricing changes for some time. Now we have clarity from the regulator, we are pleased to confirm another significant package of pricing changes which will benefit our customers to the tune of £14m a year.
“The financial impact is fully factored into the guidance we provided in our annual results last week and our enhanced competitive position puts us in a great place to continue to grow our market share.”
The news follows AJ Bell launching low-fee, commission-free investment investment app, Dodl, for UK investors last year, offering access to 30 funds and ETFs.
