AJ BELL Revised charges from October

Sjmb

From 1 October 2016 our charges for SIPPs, ISAs, Junior ISAs and Dealing accounts will be changing

One of the main attractions of AJ Bell Youinvest is our approach to transparent, fair and simple charges that caters for people at all stages of their investment journey.

Having carefully reviewed the charges all our customers are paying, we have decided to introduce a new charging structure which will be more consistent in approach across all our accounts. The new charging structure ensures that all customers are paying a fair price for the services they receive from us, irrespective of account or investment style.

We believe this will be easier to understand, whilst maintaining AJ Bell’s commitment to offering some of the lowest charges in the market.

We have created a simple Charges calculator that will help you to estimate your charges under the new structure and also to compare them with our largest competitors.

What are the changes?

We are removing the SIPP custody charge of between £5 and £25 per quarter (depending on the value of the SIPP)
We are removing the £50 plus VAT administration charge for customers in income drawdown where no income is being paid
We are simplifying our charges for paying pension lump sums including tax free lump sums. These will now cost £25 plus VAT
We are reducing our dealing charge for buying and selling funds from £4.95 to £1.50
We are introducing a custody charge for holding shares (including investment trusts, ETFs, gilts and bonds) of 0.25% per year of the value of the investments held. This is capped at £25 per quarter for a SIPP, £7.50 per quarter for an ISA and Dealing account and £5 per quarter for a Junior ISA. There is no custody charge for cash held in your account
We are changing our fund custody charge (which applies to unit trusts, OEICs and structured products) from 0.2% per year (maximum £50 per quarter) to a tiered structure based on the value of funds held:
0.25% per year for the first £250,000
0.10% per year for the next £250,000 to £1m
0.05% per year for the next £1m to £2m
0% over £2m
We can also confirm that our charges for a Lifetime ISA, which is scheduled to be available from 6 April 2017, will be the same as our new ISA charges.

The new charges come into effect from 1 October 2016.

Changes to interest rates

Following the recent cut in interest rates by the Monetary Policy Committee, we are changing the interest rates we pay on cash balances in your accounts to 0.05% on balances of £50,000 or more. We will pay no interest on balances below £50,000. The new rates come into effect on 9 September 2016.

banjodog

Does this mean custody charges on £200,000 SIPP funds will now be £500 per year rather than £100?

Eric_the_half_a_bee

Does this mean custody charges on £200,000 SIPP funds will now be £500 per year rather than £100?

I think the situation is as follows:

Current annual charge for £200,000 SIPP held in funds = £300

- "SIPP custody charge" of £100
- Fund charge of 0.20% (= £400), capped at £200

New annual charge for £200,000 SIPP held in funds = £500

- "SIPP custody charge" removed
- Fund charge of 0.25% (= £500), not capped

If you have a SIPP held in funds of more than £80,000, this means an increase in charges. For a large SIPP, this increase can be substantial.

But if you have a SIPP held in shares (including ETFs), or move to one, there is still a cap on charges so increases may be much less.

I think they may lose a lot of business; but of course competitors may follow suit.

banjodog

I have asked Youinvest to clarify, but will certainly look to switch (again)

Sjmb

Please let us know their reply. I have only just moved to them, so this is particularly annoying.

banjodog

Yep, confirmed by the calculator on their website. My charges have increased to £500, a huge percentage increase.

Algie

My SIPP charges are set to rise from £300 to £875.
I am reluctant to leave them, because I have been very happy with their service, but I shall probably be looking for another provider.

westv

Whenever a company puts "easier to understand" you know you'll pay more.

edinburgher

westv wrote: »

Whenever a company puts "easier to understand" you know you'll pay more.

I think I might actually pay less for my tiny SIPP, but I agree with your point entirely :rotfl:

somethingcorporate

Algie wrote: »

My SIPP charges are set to rise from £300 to £875.
I am reluctant to leave them, because I have been very happy with their service, but I shall probably be looking for another provider.

That's an obscene increase.

They deserve to lose customers if that is how they treat them, especially they customers with lots of money invested.

coyrls

Algie wrote: »

My SIPP charges are set to rise from £300 to £875.
I am reluctant to leave them, because I have been very happy with their service, but I shall probably be looking for another provider.

My SIPP charges in drawdown, will go from £400 to over £1,200. Like you I'm happy with their service but (after less than a year) I will have to move. Such a price increase amounts to a change of contract in my view and so I can't see how they can enforce their exit charges. I will be speaking to them when I'm feeling in a calmer mood.