AJ Bell YouInvest - refugee destinations

coyrls

Rollinghome wrote: »

On Alliance, one consideration would be that Alliance Trust Savings is still losing money and there's a constant call from AT shareholders to dispose of it. It was largely Katherine Garrett Cox's pet project and with her gone that's more likely to happen. They do have a track-record though of trying to treat clients fairly - many of whom will be AT shareholders.

http://www.dailyrecord.co.uk/business/company-results-forecasts/alliance-trust-savings-reports-return-8600663

GiacomoP

grey_gym_sock wrote: »

that's for a taxable account. but if you're looking for an ISA with no holding charges when you don't hold funds, there are fewer choices:

- iweb (except that there is now a fee of £200 to open your first non-SIPP account with iweb)
- saga share direct (only available to over 50s)
- svs xo
- td direct (no fee if you meet any of a number of criteria, e.g. if account is worth £5,100)
- x-o.co.uk

I would add Interactive investors but they have a very bad reputation according to contributors on other threads.
Anyway if you only hold cash or shares and no funds you'll pay 30£ at most. You need more than 6 years of custody charges before paying as much as iWeb asks you in a lump sum as opening fee. And none guarantees you that iWeb will not increase its fees in the next 6 years.
An ISA with TD has no admin fees but it costs you about 2.5£ a trade more than AJ Bell. So if you trade more than once a month than you're still better off with AJB.

I understand that you were paying no custody/admin fees before but it's not as bad as you may think or am I missing something?

grey_gym_sock

GiacomoP wrote: »

I would add Interactive investors but they have a very bad reputation according to contributors on other threads.

i excluded them because they don't have "no holding charges when you don't hold funds" - they charge a minimum of £80 per year. that £80 also counts as pre-paid trading commissions, so you may regard the fixed cost as nil if you trade frequently enough. i'm thinking of infrequent traders.

Anyway if you only hold cash or shares and no funds you'll pay 30£ at most. You need more than 6 years of custody charges before paying as much as iWeb asks you in a lump sum as opening fee. And none guarantees you that iWeb will not increase its fees in the next 6 years.
An ISA with TD has no admin fees but it costs you about 2.5£ a trade more than AJ Bell. So if you trade more than once a month than you're still better off with AJB.

I understand that you were paying no custody/admin fees before but it's not as bad as you may think or am I missing something?

i agree: it's not that bad at all for people not holding funds.

and i wouldn't pay iweb £200 up front to get of of charges of £30 a year - 7 years is too long a pay-off time; i would generally look for a pay-off within 2 years for any switch.

i don't have an ISA with youinvest myself - i put up the info for people who do. i have a taxable account , which has the same increase in holding charges from nil to £30. though there is a bigger choice of no-holding-fee accounts with other provider for taxable than for an ISA.

my taxable account with youinvest happens to contain holdings which i won't keep forever, because they're individual corporate bonds, not shares. so my plan is that, when i come to sell them, and perhaps to switch to a newer corporate bond, i'll sell in the youinvest account, and buy in another provider's holding-charge-free account. it's not that bad to pay £30 a year, but if i can avoid it, why not?

BananaRepublic

I wonder what most people will do as a result of the new charges? Will most stay, or move? If most are referred to AJ Bell by an IFA, they might stay, unless the IFA actively says to move, but perhaps they only had a one off session with the IFA. I would have thought most DIY investors would seriously look to move.

bowlhead99

BananaRepublic wrote: »

I would have thought most DIY investors would seriously look to move.

You might think that, but people like you (and most of us on this board) take way more interest in this sort of stuff than the average person. And the fee change is largely affecting those who have large funds (as opposed to IT/ share/ ETF) balances, so even on this board there are plenty (including me) who are staying.

Some other poster mentioned it was a bit of a con for AJB to do a comparison to other "leading" DIY providers on their website which made them look good, as opposed to listing the absolute cheapest alternative option. However, the fact is that a huge amount of people do use those big DIY names -at greater expense than AJB - and so the idea that most DIY investors would seriously look to leave because of a fee rejig, is probably wide of the mark.

For example, AJB have told their customers that costs to hold funds in an ISA have gone up to 0.25% on funds (to £250k then 0.1% on next three quarter mill) while charging 0.25% capped at £30 on shares, ITs etc.

But Hargreaves Lansdown charges 0.45% on funds (to £250k then 0.25% on next three quarter mill) while charging 0.45% capped at £45 on shares etc. Hargreaves are able to retain over 800k customer relationships with that published pricing. Youinvest only have 100-150k customers total, so the idea that most of those customers will now look to leave them, when the most famous DIY platform charges double yet retains five times the customers... is not necessarily how it will shake out.

If they genuinely thought that most customers would look to leave them *and actually do it* they probably wouldn't have changed the fee to what they have; and they have!

Likely the type of customer that represents lazy, sticky revenue is what they want. That's just what anyone wants: the Holy Grail for a service provider. One way to narrow down your customer base to that, is to put up the fees and see who sticks. However, I'd contend that for a lot of customers (existing ones, or new ones in the market over coming years), their prices are not top tier and would not alienate *most* prospective customers.

For example, this thread has struggled to identify an obvious "go to" destination for Youinvest refugees - there is certainly no move which is an absolute no-brainer for "any type" of holding. It depends what you have; investors at large all have different types of holding and will find different providers' fee scales more or less accommodative.

So even if every Youinvest customer bothered to review their arrangements, many would find it OK.

BananaRepublic

bowlhead99 wrote: »

You might think that, but people like you (and most of us on this board) take way more interest in this sort of stuff than the average person.

I was wondering out loud rather than making definite statements. However, those who use YI might be assumed to be on the path to financial geekery. The father of my half brother and half sister took a keen interest in investments as they provided his income, but did not participate in forums. There are many such people that you do not hear from. But also see below.

bowlhead99 wrote: »

And the fee change is largely affecting those who have large funds (as opposed to IT/ share/ ETF) balances, so even on this board there are plenty (including me) who are staying.

Very true, I was implicitly referring to the larger investors, such as myself, rather than those with one ISA, for example, given that fees are no longer capped.

bowlhead99 wrote: »

Some other poster mentioned it was a bit of a con for AJB to do a comparison to other "leading" DIY providers on their website which made them look good, as opposed to listing the absolute cheapest alternative option. However, the fact is that a huge amount of people do use those big DIY names -at greater expense than AJB - and so the idea that most DIY investors would seriously look to leave because of a fee rejig, is probably wide of the mark.

That is a very good point, and probably does prove that most people are relatively insensitive to the charging structure. I would be curious to know why (presumably) so many larger investors stuck with HL et al, whether these are the IFA assisted people for example.

bowlhead99 wrote: »

For example, AJB have told their customers that costs to hold funds in an ISA have gone up to 0.25% on funds (to £250k then 0.1% on next three quarter mill) while charging 0.25% capped at £30 on shares, ITs etc.

But Hargreaves Lansdown charges 0.45% on funds (to £250k then 0.25% on next three quarter mill) while charging 0.45% capped at £45 on shares etc. Hargreaves are able to retain over 800k customer relationships with that published pricing. Youinvest only have 100-150k customers total, so the idea that most of those customers will now look to leave them, when the most famous DIY platform charges double yet retains five times the customers... is not necessarily how it will shake out.

If they genuinely thought that most customers would look to leave them *and actually do it* they probably wouldn't have changed the fee to what they have; and they have!

The truth is that often in business you trust your instincts, and they have made a judgement call which they think is correct. One might think that they have done some research into the nature of their customers, which means it might be a good decision from their point of view. Or it might be a decision based on instinct, which is not uncommon.

bowlhead99 wrote: »

Likely the type of customer that represents lazy, sticky revenue is what they want. That's just what anyone wants: the Holy Grail for a service provider. One way to narrow down your customer base to that, is to put up the fees and see who sticks. However, I'd contend that for a lot of customers (existing ones, or new ones in the market over coming years), their prices are not top tier and would not alienate *most* prospective customers.

For example, this thread has struggled to identify an obvious "go to" destination for Youinvest refugees - there is certainly no move which is an absolute no-brainer for "any type" of holding. It depends what you have; investors at large all have different types of holding and will find different providers' fee scales more or less accommodative.

So even if every Youinvest customer bothered to review their arrangements, many would find it OK.

Although you have made good points, a big selling point of YI over other companies was the pricing structure, so it is conceivable that most larger investors with YI could move as they are price sensitive. I suspect that will not be the case, but we shall see.