AJ Bell: Investing account review
AJ Bell: Investing account review
Good for
- Good choice of investments
- Low platform fees
- Easy-to-use, good for beginners
Bad for
- Share dealing fees are quite high
- Mobile app a tad simplistic
What's in this review
AJ Bell is a British investment platform, founded in 1995. The company has £70 billion of assets under administration, managing 400,000+ customers. It's TrustPilot score is an excellent 4.7 out of 5.
So how does AJ Bell's platform compare to other providers? And what about the fees? Let's explore.
What products does AJ Bell offer?
As you'd expect from a FTSE 250-listed firm, AJ Bell offers a wide range of investment choices, including funds based on appetite for risk. Ready-made portfolios are also available.
Let's take a closer look at the types of investment accounts offered by AJ Bell.
Stocks and Shares ISA
If you invest in a stocks and shares ISA, any returns you earn stay tax-free year-after-year. Just be mindful of the annual ISA allowance which, for the 2022/23 tax year, is £20,000.
If you want to invest within a tax-free wrapper, AJ Bell gives you a lot of options. You can choose to invest in funds, shares, investment trusts, and exchange-traded funds.
AJ Bell allows you to invest in one of its ready-made portfolios, or in a fund built by its experts. if you want to invest in an AJ Bell fund, there are nine to choose from. Six of its funds target growth, two target an income, while one fund aims to target 'responsible growth'. AJ Bell also lists funds from other providers.
Importantly, AJ Bell ISA's aren't flexible. This means you can't replace any funds you withdraw without impacting your annual ISA allowance. For example, if you deposit £20,000 into your account within the current tax year, but later withdraw £5,000 worth of investments, you won't be able to add anything else to your investment account until a new tax year begins.
You can open an AJ Bell stocks and shares ISA with a minimum of £500. AJ Bell's regular investing service allows you invest from £25 per month.
Junior ISA
A junior ISA allows you to invest on behalf of your child. Anything put into a Junior ISA is locked away until your child reaches 18. When they hit this milestone, the investment is theirs.
AJ Bell's Junior ISA allows you to invest up to £9,000 in the current tax year. You can buy and sell investments for your child from as little as £1.50.
The annual platform fee for AJ Bell's Junior ISA is 0.25%. AJ Bell's Junior ISA fees compare well to other platforms, such as Hargeaves Lansdown, which charges a 0.45% annual fee for holding its Junior ISA.
Lifetime ISA
A Lifetime (stocks and shares) ISA allows you to invest up to to £4,000 per year, and is open to those aged 18 to 39. The Government adds a 25% bonus to anything put into a Lifetime ISA, though the catch is that your investment must be used to purchase a first home, or for retirement (aged 60). If you wish to withdraw funds before aged 60, for any reason other than to buy your first home, a 25% withdrawal penalty will apply to the sum you take out.
With the AJ Bell Lifetime ISA you can buy shares from £1.50 and you won't be charged more than £9.95. Annual platform fees start from 0.25%.
There aren't a huge number of providers offering a Lifetime stocks and shares ISA, so AJ Bell's offering is pretty decent compared to other platforms.
Dealing account
AJ Bell's dealing account provides a huge choice of investments. From normal shares, funds, investment trusts, and bonds. Remember, this is a non-ISA account, so there's no limit on how much you can pay in. Just be mindful of any tax implications that may apply to your investments, such as share dividends tax.
When opening a dealing account with AJ Bell, you get access to its online research tools. These may be useful if you want some assistance with choosing your investments. However on its website, the provider warns that its dealing account is for those 'comfortable with making their own investment decisions', so bear this in mind.
AJ Bell's dealing account also makes it easy to invest regularly. You don't have to invest a lot either as the minimum regular investment required is just £25 per month. Given AJ Bell's reasonable dealing fees (from £1.50+ per trade), regular investments may be good option if you aren't looking to invest a lump sum.
Self-invested personal pension (SIPP)
A self-invested personal pension (SIPP) is a special type of pension. It has a tax-free 'wrapper,' allowing you to save for retirement in a tax-efficient manner. SIPPs are particularly popular with higher-rate taxpayers as the potential tax benefits for higher earners is magnified, compared to those in the lower tax brackets. You can contribute 100% of your annual income (up to the maximum annual allowance of £40,000) into a SIPP during each tax year.
AJ Bell was the UK's first provider to offer an online SIPP. The platform allows you to transfer in SIPP's from other providers, and customer reviews suggest AJ Bell handles this process well.
What fees apply to AJ Bell's account?
Fees charged by AJ Bell are pretty consistent across its range of products. You’ll never pay more than 0.25% to hold investments in your account. Plus, if you invest in shares, ETFs, or investment trusts, you won't pay more than £42 per year. There's no platform charge if you invest more than £500,000.
AJ Bell's share dealing fees range from £1.50 to £9.95, depending on the type of trade you make. Interestingly, the platform charges a low £1.50 fee for a regular online investment. This makes the platform appealing for those happy to invest a set amount each month.
| Investment amount | Annual charge |
|---|---|
| Up to £250,000 | 0.25% |
| £250,000 - £500,000 | 0.1% |
| £500,000+ | 0 |
Aside from charging an annual platform fee, AJ Bell also charges for each trade. Here are the fees to be aware of.
| Type of investment | Share dealing fee (per calendar mth) |
|---|---|
| Shares, bonds, ETFs, investment trusts | £9.95 for less than 10 trades per mth, £4.95 if you make 10+ trades per mth |
| Funds | £1.50 |
| Regular investment | £1.50 |
Why are fees important?
The total cost of your portfolio can heavily depend on your investing type. For example, if you're the type to passively invest your wealth, looking at accounts with low annual platform charges will probably be more important than individual share dealing fees. That's because passive investors are more likely to stick with funds, rather than opt to trade at regular intervals.
However, if you are the type to trade regularly, you should probably be more concerned with share dealing charges.
This is why, when it comes to investing, there isn't really one investing account suitable for all. Each platform has different charges and fees. Typically those that charge a high annual platform fee will have a lower share dealing charge. In contrast, those with a low platform fee often have high share dealing fees.
AJ Bell's platform fee of 0.25% makes it one of the cheapest around. Plus, if you've investments worth £250,000+, the fee drops to just 0.1%. This is much cheaper than rival, Hargreaves Lansdown, which charges a 0.25% platform fee on investments over £250,000, up to £1m, which only drops to 0.1% if you've over a million to invest.
Sadly, AJ Bell's share dealing fees aren't so cheap, with one-off trades costing almost £10. However, if you're likely to make more than 10 trades per month, you'll benefit from AJ Bell's lower price of £4.95 per trade. However if you're solely interested in cutting the cost of trades, then it's probably best to go with another provider.
How can you open and manage an AJ Bell account?
You can open an AJ Bell account online, or via its mobile app (for Android and iOS).
Is AJ Bell's app any good?
After downloading the AJ Bell app, the first thing that comes to mind is simplicity. The app makes it very easy to add funds to your account. Picking and choosing the right funds to invest in is also well signposted. If you want help to make your investing decisions, AJ Bell's AI tools are easily found within the app.
From a functionality perspective, the app runs very smoothly. However, it's fair to say that the app lacks a dazzling interface, unlike some other platforms. Touch, fingerprint, and face ID are all supported. As is the ability to set up two-factor authentication. So when it comes to security, the app can't be faulted.
Helpfully, the app stays away from jargon, which is why we can recommend it for investing newbies. If you have any issues, the provider has a dedicated support team which can be contacted on 0345 54 32 600. Access to a customer service helpline shouldn't be overlooked, especially as many platforms now prefer to concentrate solely on online chat support. Overall, we like AJ Bell's app, despite its lack of cutting edge visuals!
What do I need to be aware of when it comes to investing?
Regardless of the investment platform you use, always be mindful that your capital is at risk. Investments can rise and fall in value. Always do your own independent research. Investment platforms, accounts or services included on our website does not constitute an endorsement.
For stocks and shares ISAs, tax treatment for ISAs may change in future.