Mathematicians - AJ Bell & H. Lansdown for S&S L-ISAs

B0bbyEwing

At what point/balance does AJ Bell become cheaper than H. Lansdown for a lifetime ISA? 

This is assuming the same funds in each. 
Funds not shares. 

I know they're both at the same charge of 0.25% with HL capping at £45yr with AJ at £3.50mo.

AJ have a £1.50 dealing charge whereas HL are free. 

But for this question I don't buy on a monthly basis. I see what I can afford each year & put that in in 1 transaction. 

This question is being asked for 2 people at differing points. One looking to open from scratch (& making annual contributions) and the other with just over £20k in their pot, looking to see who it's cheaper to hold with (also annual contributions). 

kimwp

I don't think either of them cap their fund charges.

Albermarle

If you invested in OEIC funds, neither platform has a cap.
So the only difference is AJ Bells £1.50 dealing charge, which I think they are going to scrap anyway.

Alexland

The 0.20% difference (between HL's 0.45% and AJ Bell's 0.25%) on an account with just the first year £4+1k invested is worth £10 pa so if you can make a single £4k contribution then it's cheaper to pay the 2 x £1.50 trade costs at AJ Bell to invest the £4k contribution and later the £1k bonus. Assuming you are using an accumulating OEIC fund remembering to leave enough cash to pay fees until you can next contribute (or you can ask AJ Bell to take fees from the dealing account).

Once the account gets big enough to use capping with ETFs etc then the ongoing costs are similar (£45 vs £42 pa) however the adhoc trade costs are £11.95 at HL versus £5 at AJ Bell.

I previously held my LISA at HL (and Nutmeg before that as they were first to launch a S&S LISA product) and transferred it to AJ Bell a few years ago for slightly lower costs and the service is just as good maybe even better.

For a small LISA, with limited choice of OEIC funds only, then it may be better to go with AJ Bell's Dodl at 0.15% (min £1 pm) but no capping.

B0bbyEwing

Looks like I misread this morning when I was having a look. Seems it's on shares where it's capped not funds. 

Also what makes you think AJ are going to scrap their £1.50 fee? 

ColdIron

Alexland said:

The 0.20% difference (between HL's 0.45% and AJ Bell's 0.25%) on an account with just the £4+1k invested is worth £10 pa so if you can make a single £4k contribution then it's cheaper to pay the 2 x £1.50 trade costs at AJ Bell to invest the £4k contribution and later the £1k bonus

HL's charge for OEICs in a LISA is 0.25%

however the adhoc trade costs are £11.95 at HL versus £5 at AJ Bell.

Unless you use monthly investing when it's £0. I'm not sure what AJB charge

ColdIron

B0bbyEwing said:

Also what makes you think AJ are going to scrap their £1.50 fee? 

https://forums.moneysavingexpert.com/discussion/comment/81836732#Comment_81836732

Alexland

ColdIron said:

HL's charge for OEICs in a LISA is 0.25%

Aah yes I'd forgotten they reduced that in 2023, it was 0.45% when I was a customer.

ColdIron said:

Unless you use monthly investing when it's £0. I'm not sure what AJB charge

It's £1.50 for regular investing in ETFs etc at AJ Bell. One of the limitations when I was a HL customer was there was no way of regular investing from the cash balance it had to come from a DD which means the bonus investment would always be an £11.95 adhoc trade cost. Unsure if this is still the case at HL but it's possible at AJ Bell which was the main reason I moved my LISA although now the adhoc trade fee has reduced to £5 then I don't bother anymore as if the money is invested earlier it has more time to grow on average.

ColdIron

Yes good point. You still can't use monthly savings at HL from your cash balance unfortunately so you'd still need to take that second £11.95 on the chin