AJ Bell regular saving and fees

point5clue

I'm looking with my oldest at him opening a LISA and making minimum £25pcm payments. AJ Bell seems to be the best value to hold the fund I want. I'm an iWEB man myself, so don't know whats possible on AJ Bell...

I'd normally suggest the VG Global All Cap for a long term investment, but from what I can read there would be a £1.50 charge on every transaction.

I think if we choose one of their 'Passive Funds' that there will be no trading fees. Charges are twice as high, but still only .25pc extra per annum compared with 6pc chopped off every payment.

Then we would switch the fund periodically - say once every other year.

Has anyone done anything similar ? Does my logic stand up to the scrutiny of the forum ?

ColdIron

The main benefit of the LISA is the 25% uplift. A percentage fee provider makes sense for low values so AJB ticks that box. The platform charges are less than a quid, but you're opting for their passive funds to avoid the killer £18 transaction charges. If you were to use HL the annual platform fee is still less than a quid for the first year and no dealing charges which would allow you to choose any fund you like. The combined platform charge and OCF between the Vanguard fund and AJB's in house funds more or less cancel each other out and for a sub £1 difference I wouldn't mess about and I'd opt to keep my options open for future fund choices and also the ability to swap cheaply (free). The OCF waiver at AJB only lasts for less than another 4 months so I'd be inclined to disregard it. Well that's my logic

aw77

If you choose the passive you will have to sell it to leave AJ Bell if you ever wanted to. There is a point when the £1.50 charges are worth it for the cheaper fees of AJ Bell versus the more expensive of HL, which depends on how much you plan to buy and sell. You could switch from HL to AJ Bell once you hit that point but then you might need to be out of the market for a period because I think HL maybe charge you to move money keeping it within the fund wrapper. Swings and roundabouts in my opinion.

aw77

p.s. Should add, that you could choose to do the £25x12 at once in the first few years to keep the fee at £1.50 per year, until you've reached the point at which HL would be more expensive. It might make some difference in terms of hedging bets and entering the market at different highs and lows, and hoping it will all average out, but then if it's only £25 at a time, how much difference does it really make?

stphnstevey

I choose AJ Bell over HGL as I use their regular investment fees to invest a lump sum in a tracker

AJ Bell had more of selection of ETFs through RI than HGL and seem to remember the fees worked out slightly less

Not quite what asked for, but just offering alternative which maybe cheaper

FatherAbraham

point5clue wrote: »

I'm looking with my oldest at him opening a LISA and making minimum £25pcm payments. AJ Bell seems to be the best value to hold the fund I want. I'm an iWEB man myself, so don't know whats possible on AJ Bell...

I'd normally suggest the VG Global All Cap for a long term investment, but from what I can read there would be a £1.50 charge on every transaction.

I think if we choose one of their 'Passive Funds' that there will be no trading fees. Charges are twice as high, but still only .25pc extra per annum compared with 6pc chopped off every payment.

Then we would switch the fund periodically - say once every other year.

Has anyone done anything similar ? Does my logic stand up to the scrutiny of the forum ?

Well, on an ordinary AJB ISA, the monthly contribution is quite distinct from any regular investment.

Hence, it would be possible to have a monthly contribution amount of £25, but a regular investment amount of £300. The regular investment would fail for the first eleven months, triggering ignorable messages from AJB about insufficient funds, then on the twelfth occasion, the investment would be made for £1.50, giving a relative trading fee of 0.5%.