New AJ Bell Youinvest charges

itm2

If anyone in interested in trying to get our lawmakers to look into these type of practices, I've started a petition here to get the issue debated in parliament. If it reaches 10,00 signatures a response will be provided from the government. Petitions reaching 100,000 signatures are almost always debated, according to the government website.

Please feel free to add your name if you think this sort of thing needs to be reined in - e.g. at the very least abandoning exit charges and increasing the mandatory notice period (currently 30 days) in the wake of price increases:
https://petition.parliament.uk/petitions/164985/sponsors/hSHk7AEjiAkPmLgCMt

"End unscrupulous pricing practices in the financial services industry
In the last few years hundreds of thousands of individuals have been saving for retirement, and managing their retirement funds using online platforms. Currently these platforms can impose massive fee increases on their customers at only 30 days notice, while at the same time imposing exit charges.
Hargreaves Lansdown doubled their custody charge in 2014, and AJ Bell increased their custody charge in 2016 while removing the annual cap on these charges. The net effect was typically to increase the fees charged to customers by a minimum of 50%, and in many cases much more. Both companies impose exit charges for customers moving their accounts elsewhere. Moreover, transferring to another provider can take 6 months or more, while providers are currently only required to provide 30 days notice."

EdGasket

My charges have actually gone down with AJ Bell so while I have sympathy for the petition, I don't feel I can sign it as my charges have not risen by a minimum 50%; they've reduced by around 10% and once I take UFPLS, the charge has fallen from £75 to £25 per payment which is most welcome. Swings and roundabouts but tough on traditional fund investors.

itm2

EdGasket wrote: »

My charges have actually gone down with AJ Bell so while I have sympathy for the petition, I don't feel I can sign it as my charges have not risen by a minimum 50%; they've reduced by around 10% and once I take UFPLS, the charge has fallen from £75 to £25 per payment which is most welcome. Swings and roundabouts but tough on traditional fund investors.

Well, you don't need to be a victim to show support for others who are

alanobrien

Hmm, according to their calculator my charges have increased by 270%. Not sure i am prepared to pay them that much more for no tangible benefit.

Methinks in a fairer system there would be a legislative cap on the charges they are allowed to apply so the consumer had a choice/right to move on without exit charges. Maybe one day.........

Thrugelmir

alanobrien wrote: »

Methinks in a fairer system there would be a legislative cap on the charges they are allowed to apply so the consumer had a choice/right to move on without exit charges. Maybe one day.........

When did businesses become charities. Third parties imposing arbitrary
caps will simply reduce choice further. You'd soon get very upset if Government interfered in the companies you've invested in.

bowlhead99

itm2 wrote: »

Hargreaves Lansdown doubled their custody charge in 2014, and AJ Bell increased their custody charge in 2016 while removing the annual cap on these charges. The net effect was typically to increase the fees charged to customers by a minimum of 50%, and in many cases much more.

A problem people sometimes have when putting a petition together is that they are so incensed by an issue that they make unsubstantiated claims to draw attention to their point, which then causes others to not take them seriously.

Is it really true that the net effect of the HL and Youinvest price changes was "typically" an increase of "a minimum of 50%". Synonyms for "typically" would include "normally", "generally", "ordinarily". If you are going to say that, then it would have to be more likely than not, that a given customer's cost increase was at least 50%.

Actually HL claimed that over 80% of customers would see a decrease in overall fees when it introduced its new charges (which it did to comply with the FCA platform review when moving to clean priced funds, from dirty funds with a limited small rebate). I certainly didn't see their per-customer revenues jump 50% on introduction of the new structure ;they are a listed company and put their financial info in the public domain.

I don't know what Youinvest's customer mix is, but back in 2014 when the HL pricing hit the headlines, HL they said they had half a million clients and almost 60% of them had assets under £25k.

At Youinvest, it's true that a funds-only SIPP customer with £180k of funds on platform is going to face a 50% increase from £300 to £450 a year, as a result of the funds percentage increase and 'uncapping' that people are complaining about - and as we've seen on the forum, some will have greater increase than that ; but someone with £25k of funds and doing a few buys and sells is not really going to see big changes in the 50%+ range. My own SIPP with them is several times size that but it isn't Fund-heavy and so wont see much of an increase at all.

So, I would question whether it is fair to say that a typical customer faces a 50% fee hike and that Youinvest are literally trying to raise revenues by 50% (less defections).

If it is not fair to say that, then government are less likely to take the petition seriously even if the underlying theme is valid.
IMHO.

itm2

bowlhead99 wrote: »

A problem people sometimes have when putting a petition together is that they are so incensed by an issue that they make unsubstantiated claims to draw attention to their point, which then causes others to not take them seriously.

Is it really true that the net effect of the HL and Youinvest price changes was "typically" an increase of "a minimum of 50%". Synonyms for "typically" would include "normally", "generally", "ordinarily". If you are going to say that, then it would have to be more likely than not, that a given customer's cost increase was at least 50%.

Actually HL claimed that over 80% of customers would see a decrease in overall fees when it introduced its new charges (which it did to comply with the FCA platform review when moving to clean priced funds, from dirty funds with a limited small rebate). I certainly didn't see their per-customer revenues jump 50% on introduction of the new structure ;they are a listed company and put their financial info in the public domain.

I don't know what Youinvest's customer mix is, but back in 2014 when the HL pricing hit the headlines, HL they said they had half a million clients and almost 60% of them had assets under £25k.

At Youinvest, it's true that a funds-only SIPP customer with £180k of funds on platform is going to face a 50% increase from £300 to £450 a year, as a result of the funds percentage increase and 'uncapping' that people are complaining about - and as we've seen on the forum, some will have greater increase than that ; but someone with £25k of funds and doing a few buys and sells is not really going to see big changes in the 50%+ range. My own SIPP with them is several times size that but it isn't Fund-heavy and so wont see much of an increase at all.

So, I would question whether it is fair to say that a typical customer faces a 50% fee hike and that Youinvest are literally trying to raise revenues by 50% (less defections).

If it is not fair to say that, then government are less likely to take the petition seriously even if the underlying theme is valid.
IMHO.

Point taken. Hopefully the "typically" sentence doesn't completely negate the basic principle of the petition.

Thanks to those who have supported so far. I've had confirmation that the petition is being checked prior to full publication, having met the minimum number of signatories. Publication usually takes a week or less - I'll post a revised link if it changes.

I'm also penning a letter for my MP, but wasn't sure whether it would be better to send it to my local MP or to the PM's mailbox. Any views??

talexuser

I think I'm off to IWeb. Even with a £200 opening fee, £200 to move my funds, and £200 to move the dealing account, it will still be much cheaper than the first year at YouInvest under the new charges. Dividend re-investments will be half the price, fund changes will be more expensive at £5 rather than £1.50, but I rarely change funds, and they are all ACC anyway, and that would be totally insignificant compared to the custody charges.

I had considered XO for dealing, but need somewhere for the ISA funds, and once you've paid the one opening fee, dealing at IWeb is slightly cheaper anyway. If IWeb now raise their charges the transfer out is capped at £125, but I doubt anyone will be that much cheaper if we have a round of charges readjustment. I hope they don't have the rush of applications that led to the saga at II.

itm2

talexuser wrote: »

I hope they don't have the rush of applications that led to the saga at II.

I missed all that - what happened at II?

talexuser

https://forums.moneysavingexpert.com/discussion/4904374

you'll need a lot of time to read all that, but looking at a few pages at the middle and near the end should give a flavour of the experience