New AJ Bell Youinvest charges

Simon_C_Brown

EdGasket wrote: »

or x-o no annual charge and £5.95 per trade; ISA or dealing only; no SIPPs.

Is this a platform or execution dealing only?

masonic

Simon_C_Brown wrote: »

Is this a platform or execution dealing only?

It's an execution only broker (UK market only). You would definitely need to switch to ITs and ETFs if you were going down this route.

greenglide

I wonder if any competition take advantage of this and offer to pay some or all of your transfer charges to get the business

The expensive ones probably will but the really competitive ones are surely unlikely to?

And others might be changing their pricing as well, frying pans and fires comes to mind.

pavane

bowlhead99 wrote: »

Yes, good luck splashing a banner on your front page saying that customers contributing £100pm to their ISA have to pay as much fees as if they had a £500k SIPP.

The reality is that the small customers who opened up their account this year want to get their account set up for free, which they think the business should do as an investment in the relationship, and they don't want to pay anything for exit fees because it's a breach of human rights and freedom, and they don't want to pay anything for their 48 purchases into two or three funds over the first couple of years because it's all done by computer, and the business had to buy the computer and premises and a workforce anyway, for the customers with the half million pound accounts (who might do a couple of fund switches over the same period).

And the big customers don't want to pay more for the account than the "little people" if they only want the same number of trades and statements as the little people...

This was in reply to what would be the fairest method. The cost is directly proportional to count and type of asset and nothing to do with the size of the assets. It was acknowledged this pricing model does not exist as such.

You are missing the point in your example. The complaints in this discussion here are about the major changes under the claims the changes are to be more transparent which several pointed out are not only more expensive but more complex. It is not about the expectations you're talking about, those small customers you talk of who want cheapest would not have chosen Youinvest in the first place, even before these changes.

Your ISA example is also irrelevant. Small or big portfolio, there are free ISA providers around. Other than those who prefer to combine multiple accounts with same provider or have certain platform needs, there is no reason to pay 30/year for a Youinvest ISA.

Jimjiminy100

Having calculated what affect the increase will have on £100k split between an ISA and dealing account I was surprised that it will only add circa £80 per year in extra charges but the recent announcement has made me realise that the total charges i.e .25% on all funds and .25% on all shares, IT's etc capped at £30 per year is a lot of money especially over a 10 year time frame lets say, compared to Halifax's £12.95 per year fixed fee and I only normally invest via monthly reg investment and Halifax is £2 pm compared to youinvests £1.50pm so not a massive difference! Just a shame to be leaving youinvest as I like them and the accessibility but its not worth £300+ per month!

bowlhead99

pavane wrote: »

This was in reply to what would be the fairest method. The cost is directly proportional to count and type of asset and nothing to do with the size of the assets. It was acknowledged this pricing model does not exist as such.

Yes, my point was that that pricing model does not exist because it is not feasible. The new investor starting from scratch investing in two funds wants to do almost 50 transactions over the first two years as he does a monthly buy of each fund. With his average balance of £1k over the first two years, he does not have the appetite or the capacity to pay the same level of fees as someone with a £500k SIPP who needs a few rebalancing trades.

As a side note, while the day to day operating cost is to do with activity volumes, it is not true that the cost of running the business is nothing to do with the size of the assets. Try telling that to your insurers or the FCA. And on a practical point, if a small human error is made on a trade, you can imagine a customer complaining, "I've been using you for years and have £500k with you so I expect impeccable service, what the hell are you doing with this dodgy trade that's cost me a few grand"; he is going to expect you to jump further and faster to fix his problem than someone where your error cost them 5p.

You are missing the point in your example. The complaints in this discussion here are about the major changes under the claims the changes are to be more transparent which several pointed out are not only more expensive but more complex.

I am not a fan of the changes either, although it won't really be any more expensive for me as I don't have much in the way of funds with them.

I can see some sort of rationale for making the charges broadly consistent across product types (albeit capping the shares custody fee at a lower level for ISAs than SIPPs, as ISAs tend to be smaller with less HMRC admin compliance than a pension wrapper). I can also imagine that in their survey, they had some respondents saying they didn't like paying a fiver a pop dealing fees on their funds when they were already paying an annual fee. So they increased the % annual fee and reduced the transaction fee. I would have preferred they didn't, as there are plenty of providers you could go to if you wanted a higher percentage annual fee in exchange for lower or zero transaction fees. That is the problem with surveying your customers, referendum style.

As a cynic, I completely agree that when a company says they are changing something to make it more 'consistent' or 'easier to understand', they are not doing it to make less money out of you. So for example if some people said "hey, why am I paying a fund custody fee when I don't pay a shares custody fee", it is certainly a more likely outcome that the 'consistent' solution will be to make them pay a shares custody fee too, rather than eliminate the funds custody fee. And likewise if they say 'why am I paying an annual SIPP custody fee but not an ISA custody fee'.

Frankly, if someone is moaning that things are 'more complex' because they are paying a tiered rate for funds custody... It's hardly rocket science is it. Yes, obviously if I have a lot of funds in a SIPP I would prefer to pay £100 plus 0.2% for £100k, then 0% thereafter, for my funds, instead of £0 + 0.25% for a quarter mill, then then 0.1% for the next three quarter mill, then 0.05% for the next mill, then 0% thereafter. The new fee structure will result in a higher fee. But no competent DIY investor is going to find this 'complex' to understand. The complaint is about the absolute level of fees compared to what they were, rather than the complexity.

For now, I'll be keeping Youinvest for my SIPP, and keeping TD for my main ISA. It does give me a quandary on moving my parents' ISAs from HL later this year though. I'd pretty much decided to move them to Youinvest to save an easy £200 a year each, but now the savings will not be as big as they were going to be. A fixed fee provider would make more sense, but the bargain-basement ones don't offer reimbursement of HL's exit fees.

EdSwippet

bowlhead99 wrote: »

Yes, my point was that that pricing model does not exist because it is not feasible. The new investor starting from scratch investing in two funds wants to do almost 50 transactions over the first two years as he does a monthly buy of each fund.

It's only 'infeasible' because such high-volume low-value investors have been cossetted by platforms, which actively facilitate this mode of building up an account by overcharging higher-value (and likely lower-volume) account holders accordingly. As a result anyone starting out now expects to be able to do this, even though it is uneconomical from a platform perspective. Of course, the platform's payoff arises once the investor is locked in (through overcharging on transfers out, in part) and assets rise.

Starting investors could easily reduce their trading volume from 48 to 16 over two years by trading quarterly rather than monthly. There would be no difference in long-term outcome. But facilitating this instead would not be as much to the benefit of the platform.

bowlhead99 wrote: »

Frankly, if someone is moaning that things are 'more complex' because they are paying a tiered rate for funds custody... It's hardly rocket science is it. ... The new fee structure will result in a higher fee. But no competent DIY investor is going to find this 'complex' to understand. The complaint is about the absolute level of fees compared to what they were, rather than the complexity.

Complaint is indeed about the fees rising, for some by a factor of ten or more, which seems to meet the definition of 'egregious'. But it is also about Youinvest claiming that the change is "easier to understand", when it clearly is not. Marketing spin does not equate to reality.

Eric_the_half_a_bee

bowlhead99 wrote: »

The cost is directly proportional to count and type of asset and nothing to do with the size of the assets. It was acknowledged this pricing model does not exist as such.

Yes, my point was that that pricing model does not exist because it is not feasible. The new investor starting from scratch investing in two funds wants to do almost 50 transactions over the first two years as he does a monthly buy of each fund. With his average balance of £1k over the first two years, he does not have the appetite or the capacity to pay the same level of fees as someone with a £500k SIPP who needs a few rebalancing trades.

The pricing model is not feasible, on the assumption that investors are limited to one pricing model throughout their investing lifetime. But they are not. What is to stop a new provider launching a flat rate pricing model at say £30 per line per year with a £400 minimum charge, to attract all the mature investors with portfolios over £500k? It would be a win-win for both.

talexuser

With up to 6 weeks transfer on ISAs perhaps, it's becoming time to make a decision. However frying pans and fires is apt, we don't know who else will be making "announcements" soon. I hope Snowman still updates his spreadsheet :beer:

rail.link

Do they charge for closing the account ?
Can't see anything in the charges section except for the £25 for each transfer out ?