AJBell LISA & charges

I have been thinking of starting a S&S LISA with AJBell. I can see that they charge a 0.25% custody fee, but if I was to invest in one fund using a monthly payment plan does that mean that as well as the 0.25% per annum I would also be paying £1.50 a month to buy into the fund?
Their charges page says there is no charge for having a monthly savings plan, but a £1.50 fee per trade. Is buying units every month classed as a trade?
I'd be looking to pay in £250 a month to get the gov bonus & intend to leave the money as a nest egg for retirement. As I understand it, I'd be paying the trade fee each month.
Is this right? & Would it be worth it to pay in in lump sums rather than monthly (every 3 months or so?) To lower the charges?
Or is it such small amount that it's not worth the hassle to avoid paying £12 a year in trade fees & losing 2 months of potential investment growth? After all, £1.50 X 12 is only £18 a year..... :rotfl:


  • BLB53
    BLB53 Posts: 1,583 Forumite
    Yes, you would pay £1.50 for each monthly purchase which is 0.6% so it would be cheaper to just do one annual lump sum which works out at 0.05%.

    On the other hand markets are at an all time high and if they fall over the coming year then a monthly drip feed would work better.

    Either way you will get the 25% uplift on your savings so I would not be too concerned.
  • Thank you for that swift & thorough response :) I did wonder if I was overthinking it way too much.
    My pension & S&S ISA is invested in all Global equities (I'm 36, so a long time to ride out market shocks) so I was thinking a single multi asset fund or a 40-85% shares type fund for this as I'll have growth just from the government top up.
  • I've done a bit of research and opted for the AJBell moderately adventurous passive fund, which has no trade fees for a regular investment & no 0.25% custody fee for the first 12 months. Although the fund charge is 0.5%.
    This is very much a pay in, get the free 25% uplift & forget it's there until I'm 60 ISA. :) So I'm not looking at doing any portfolio tweaking, just leaving it alone for 25 years.
  • Alexland
    Alexland Posts: 9,639
    First Anniversary Photogenic Name Dropper First Post
    edited 23 December 2017 at 1:48PM
    You understand the charges correctly - the 'free' monthly contribution is just to add cash into the account not to invest it which costs £1.50.

    In addition if you invest the bonus immediately that's another £1.50 per trade! You can delay investing the bonus each month next year until the monthly contribution occurs but it's hassle which I don't think you want.

    If investing monthly it may be cheaper to go with Nutmeg or HL in the early years (although HL has an exit fee) as they do not charge trade costs.

    Once the balance gets big enough after a few years the 0.20% saving on the AJ Bell platform compared to HL/Nutmeg us worth more than the trade fees.

    That's why I am with Nutmeg for now but intend to move in future. Also the Nutmeg average ETF costs are only 0.17% above the 0.45% platform fee. Even if you do go with AJ Bell now I don't see why you would pay 0.5% for their fund cost when you could get a multi asset fund from Vanguard, HSBC or L&G for between 0.2% and 0.3%

  • At the minute, I'm just getting started. I've looked at the L&G multi index 6 Acc, which is 0.31% ongoing charge, & then £1.50 a month trade fee & 0.25% platform fee.

    I've gone for the AJ Bell passive fund as there's no trade fees & no platform fee for 12 months, just 0.5% fund charge. & I also plan to pay in & invest extra money when I have it by debit card (aiming for that £4k limit) so no trade fees is a bonus, esp if the gov top up will be classed as a trade by itself. (I'm hoping I've not missed an "adding cash to the account charge" somewhere...)

    I'll reassess in a year when charges go up to 0.75% total & see if I'm looking to switch to a different fund then.

    I'll also be more likely to commit the full £333 a month in one go by Direct Debit then, so trade fees won't really matter.
  • Alexland
    Alexland Posts: 9,639
    First Anniversary Photogenic Name Dropper First Post
    The bonuses will almost certainly be added to your account as cash for you to invest.
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