AJBell YouInvest Raising ISA & SIPP fees – what to do?

I got an email this week from AJBell YouInvest informing me that they would be raising the fees on ISAs, SIPPs (and investment accounts). Even the Junior Isas weren’t safe.

With other options like FreeTrade offering competitive alternatives, is this the time to move away from YouInvest?

A quick back story:

I used to use Hargreaves Lansdown but moved to YouInvest a few years ago to save money. HL charged £200 a year for the SIPP and YouInvest charged £100 – it’s an easy choice. Ironically, HL used to be considered low cost but their costs are looking competitive for 2001 not 2021.

Now, YouInvest think that £25 a quarter is too low and £10 a month is the right amount to charge. That’s an extra £20 a year for me (or about 0.01%) but it still riles me. The numbers are a bit worse for our other accounts (ISAs, LISA and SIPP) and the overall total increase in costs is around £12 a year for each ISA / LISA and £20 for each SIPP. In other words £98 a year extra or about 0.03%, or about 3 BP (basis points).

The SIPP has an shares custody charge (including investment trusts, ETFs, gilts and bonds) equivalent to 0.25% of the SIPP value – which is pretty good and tops out now at £10 / month meaning if you hold more than £60,000 you’ll pay £120 a year and no more. For a SIPP the rate is also 0.25% and the new limit will be £3.50 a month or £42 a year topping out at £16,800.

Why does 0.03% rile me so?

First of all, any increase in fees means less money in your pocket. £98 a year adds up. Furthermore, I don’t like this extra charge because the actual costs involved in holding and dealing shares are quite low. The profit per customer at AJBell is around £1000 a year and their operating margins are around 30% – very healthy numbers. So I don’t get why they need any more money from me? Last year’s accounts show a business that is increasing its revenue, customer base, margin and profits. I’ve read the latest YouInvest company accounts and they are not struggling. Why would they feel that this increase in fees is warranted when the trend in investment fees for fund and trading is heading towards zero. Increasing fees might mean an increase in revenue but it’ll scare people away – just like I was scared from HL to YouInvest, now I’m thinking of where else to go.

So what’s the alternative?

I suppose I can either suck it up or I can jump ship elsewhere. And at the moment FreeTrade have a promotion that means you can pick up a very nice bonus share (from between £40 to over £2,000) when they launch their SIPP. I’ve written about it here. Best of all, FreeTrade allows you to trade shares for much less than other platforms – YouInvest included. Even the regular investments at £1.50 (once a month on a limited range of stocks) starts to add up and cost you.

If you set-up an account with FreeTrade using this referral link then we can both get a free share – worth between £3 and £200 – which is pretty nice and any SIPP transfer share is on top of this.

Seems like a no brainer?

As I said before, I don’t know how I feel about my phone containing all of my money and I either fidget with it or a cybercriminal steals it. Maybe I’m just a luddite. The free share is a very tasty prospect and it would more than cover the costs of migrating to FreeTrade. In some ways, this modest increase is just the motivation to move and I suspect that many of YouInvest’s customers will do the same.

Vanilla, just plain vanilla

One of the attractions of the YouInvest platform was that it was basic, simple to use and not all singing and dancing. Creativity and novelty is great but when it comes to boring things like investments and pensions, sometimes vanilla is good after all; who wants a creative dentist with an abstract artistic streak when you are getting a filling?

So, I’m really torn between keeping things the way they are and migrating across. I know that Weenie and I have discussed this already and there are others in the same boat I’m sure.

Thanks, GFF

5 Comments

  1. Hi GFF,

    Focusing hard on fees is eminently sensible… but there comes a point when you have to value your own time and stick with a profitable and established firm like AJ Bell (which is therefore hopefully less likely to go under) rather than put everything into your phone with the new guy on the block who saves you a few basis points (for the moment). It is all about the fees, except when it isn’t…

    Keep up the good work!

    Guy

    Liked by 1 person

  2. I would stick with AJBell for now if it were me. I do like Freetrade, and write about it every month, but something about the platform at the moment is preventing moving any serious money across.

    Personally I wouldn’t be in the running for a top free share either if I moved over my pension so the bonus free share isn’t very attractive for all the hassle transferring would bring.

    Maybe Vanguard? 0.03% probably wouldn’t get me to move though – although you do raise a good point about YouInvest not struggling so why do they need to do this? I’d be interested in posing this question to them and seeing what they say.

    Liked by 1 person

  3. I got the same email and feel the same way, as I hold both a SIPP And LISA with AJ Bell. I chose them because I thought it would be a good long-term account, but now I’m not so sure anymore. Will probably stay for the moment, but keep an eye out for a better account in the future, possibly Vanguard.

    Liked by 2 people

  4. I’ve written to AJB to ask them to justify the hiking up of the ISA fees – expecting some standard corporate reply, if any.

    The increase in SIPP fees is annoying but I guess I can see why they done it – they’ve removed their drawdown fees, which even HL didn’t have.

    But an increase of 40% in the ISA fees is just a cash grab. Unfortunately, I’ve got too many holdings to liquidate and transfer (again, they charge for tranfser of holdings and even HL no longer does this) so I guess I’m stuck with them at the moment.

    One small consolation is that I got some of their shares when they IPO’d which are at +160%

    Liked by 2 people

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