AJ Bell - Transfer Out Fees Clarification

ok_cub2008

Good afternoon,
I'm looking to open my first Stocks & Shares ISA, and I have a very specific question about AJ Bell's fees.
I understand that there is a £1.50 charge for fund dealing, and a £25 charge per fund for transferring holdings out of AJ Bell.
I wanted to clarify if the £25 charge would apply to transferring amounts between funds within AJ Bell.
For example, say I had £2,000 each in 2 funds, and I wanted to move the entire balance out into a single new fund, would the fact I have completely divested from the first two funds, would that attract 2 x £25 charge, or would it be just 2 x £1.50 (or even 3 x £1.50 if the selling of the two funds, and buying into the new one counts as 3 fund dealing transactions).
The reason I ask is that people are warning that "AJ Bell is expensive if you want to transfer your money out of a lot of funds", but surely if you just consolidated your position into one fund before transferring out from AJ Bell completely you could avoid these multiple £25 charges.
Thanks in advance.

eskbanker

Transferring, in the context of ISAs, means moving from one platform to another, so that's where the £25 charges apply, but completely avoidable if you sell everything and transfer out as cash, which incurs no charge.  Having said that, transferring holdings in specie avoids being out of the market but there are often reports of the process taking months that way....

Moving from one fund to another within the platform would indeed be £1.50 for the sale and the same again for the purchase.

bowlhead99

The charge is if you are trying to move your holdings away from AJ Bell, not if you are simply looking to sell a holding A and buy a holding B at AJ Bell, or sell A and B and then buy C at AJ Bell. That buying and selling process simply costs £1.50 per sale transaction and £1.50 per purchase transaction, per fund.

The warning is simply saying that (e.g.) if you hold Fund A and B at AJBell and want to start having a different fund platform than AJ Bell look after those two fund holdings for you, AJ Bell will charge you to handle the re-registration process - whereby the funds move from being held on AJ Bell's platform to someone else's. 

Cash transfer to another ISA manager	No charge
Transfer out the underlying assets	£25 per holding

By contrast if you want to transfer your existing holdings of A and B *to* AJ Bell from somewhere else, they won't charge you and will set up your account for free. 

If you held A and B at AJ Bell and wanted to buy C at [different platform] you could sell the funds (£1.50 fee each) and transfer the resulting £4000 of cash proceeds to the other broker (with no charge to transfer the cash), where you buy C when the money arrives. But if you wanted to stay in the market during the time, you could have AJ Bell transfer the exact number of fund units of each fund you hold, over to the other platform, and then when those two fund holdings arrive at the new platform, you could have the new platform handle both the sale and the purchase.  But in that scenario you would need to pay AJ Bell £25 per holding to handle the transfer of the assets from their safe custody to the other platform's.  You might prefer to sell A and B at AJBell, buy C at AJ Bell, and then transfer C over, incurring only one £25 charge, but still being generally 'in the market' while the transfer goes through.

tropic_of_Username019

ok_cub2008 said:

For example, say I had £2,000 each in 2 funds, and I wanted to move the entire balance out into a single new fund, would the fact I have completely divested from the first two funds, would that attract 2 x £25 charge, or would it be just 2 x £1.50 (or even 3 x £1.50 if the selling of the two funds, and buying into the new one counts as 3 fund dealing transactions).

It would be 3 x £1.50.

And if you then transfer the new fund to another platform, that would be another £25.

Reducing the number of funds prior to a transfer could make sense. But beware that some funds have different prices for buying and selling, so there is a cost to sell them and buy them back later on. And you would also be paying £1.50 to sell each fund with AJ Bell, and an unknown amount to buy them back after transferring to another platform (i.e. depending on where you'd be moving to and how they charge).

Alexland

Is there any particular reason you would want to pay AJ Bell £1.50 to trade funds in an ISA when Cavendish resell the Fidelity platform at the same 0.25% ongoing charge but with no fund trade charges or exit fees? Are the funds you want not on Fidelity FundsNetwork?

https://www.cavendishonline.co.uk/isas-investments

We have 4 accounts with AJ Bell for the capped ETF fees but I wouldn't use them for traditional open ended funds.

cloud_dog

OP, if you are just starting out and if you are planing to invest monthly, as opposed to a one-off lump sum investment then I would consider running a general investment (not their ISA) account with Vanguard (investing in one of their funds or ETFs) and then periodically selling and moving the money in to an S&S ISA account, for example iWeb.  Whilst there would be a charge to invest (once), there wouldn't be any ongoing percentage based platform charges.