AJ Bell Youinvest Review

1st Dec '20 by Ben Hobson

51 comments 1261 reads

Dear readers: This is my honest review of AJ Bell Youinvest as Stockopedia’s Markets Editor. Neither I nor Stockopedia have been incentivised to write this review, so what follows are my genuine thoughts on the service, having been a customer for a few years.

AJ Bell Youinvest is one of the fastest-growing stock market investment websites in the UK. It is also one of the largest, with nearly 300,000 people using it to manage their investments.

Its dealing fees aren’t the cheapest in the market, but they are cheaper than some of its major competitors. The trade-off for their competitive pricing is that their research offering and trading tools are not as powerful as some of its competitors. As part of its low-cost model, you’re in the driving seat when it comes to making investment decisions and placing your own trades.

Youinvest offers the range of accounts that you’d expect from a major investment platform. This includes tax-efficient Self Invested Personal Pensions (SIPPs), Stocks and Shares Individual Savings Accounts (ISAs), Lifetime ISAs, standard Dealing Accounts, and Junior SIPPs and ISAs. Among the securities available to trade on the platform are a wide range of UK and international equities, funds, investment trusts, exchange traded funds (ETFs) and bonds.

Commission and Fees

Each share dealing platform comes with different costs, and these can eat into your returns if you’re not careful. AJ Bell, like the majority of its competitors, charge no fee to set up an account, no fee for inactive (dormant) accounts and no fee for withdrawing or holding onto cash – which is a good start.

Dealing

Most investment platforms charge flat rate fees for buying and selling investments – Youinvest is no different. Depending on the investment and the trading frequency, those fees are:

Funds (including unit trusts and OEICs) online: £1.50 per deal
Shares (including investment trusts, ETFs, gilts and bonds) online: £9.95 per deal

Shares become cheaper to deal in (at £4.95) if you trade more than 10 times in the previous month.

How does this compare to the competition? Hargreaves Lansdown – the UK’s largest share dealing website – typically charges £11.95 for most deals. Interactive Investor, another competitor, charges £9.99 per month for an account, and then an additional £7.99 for dealing in shares, trusts and funds. Compared to this, if you’re primarily…

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Rusty2

13th Jan '21

Cant see anything about $10 commission. Yes 0.5% FX.

HL charge about £12 + 1% FX.

If I do 3 trades in previous month then it should just be 0.5%?

As I'm new, the fee is now £10 for US shares. Is the FX charged later as I can't see it on the transaction fees?

PLS1nve5t

My bad - your right it is £10 not $10 for a US trade.

Also that's the way I read it after 3 trades in a month, the following month is commission free and you only pay the 0.5% FX fee.

I wonder what they charge in month three if you do three or more "free" trades in month two.

If I was doing a lot of US trading then I would consider Charles Schwab but they don't do ISAs.

I want everything in an ISA.

Agree - there's no such think as a free lunch, though some can work out cheaper than others.

It should be the same as month 2.

simoan

That's fine. All of my US holdings are outside tax wrappers so I can claim back the WHT on my SA return and I can use my CGT allowance.

I like the look of Charles Schwab but can't see what the catch is? How do they make their money if you only trade US stocks and hold USD and so don't incur the 1% FX charge? The commision rates are very cheap and I can't see an annual "management" or "platform" fee of any kind... Does anyone know?

All the best, Si

Most US platforms are free or low fee and they are a US bank. They will make some on the spread, also I have read they can lend out money, that is not being traded. They will make money on other markets, I think they are more expensive if buy UK shares than say IG.

You are comparing them with UK/European based platforms. The catch is we are in the UK where they are few, if any, decent low cost platforms. I just hope the UK goes down the US path soon.

Thanks! So Schwab is more like the old TD Waterhouse account I used to have many years ago before they ditched UK customers and I had to move to their UK subsidiary for my US share dealing which was less than ideal. I'd settle for that - the old TDW US account was brilliant and ideal for my US trading needs. I have no interest holding UK shares in the same account.

I think I'll phone them tomorrow. Obviously, you'd not be protected by FCSC etc. if the funds are held offshore in a USD account, so I need to check what protection there is for non US nationals. Other than that I can't see a downside.

Thanks again, Si

Wilbraham

Back in the day (1999 like) I had a Schwab UK account, as did many - think it was called Frequent Traders Club. Worked well, low cost and efficient. Sadly trading volumes plummeted after the crash, and perhaps compliance costs rose, so they abandoned the UK offering in the early 2000s and switched us to Barclays, where I still am, though have started to realise and de-fund as it's a horrendous platform now and geared towards 'funds' (as are HL, AJB and most of the big players I believe).

Likewise I held an Options Direct account at that time. Again, nicely efficient and fine for US and UK securities (including US options of course). Sadly they were acquired by FXCM shortly before the GFC. FXCM maintained the platform for a few years though they really wanted Forex trades so they also abandoned their UK clients. We can't take for granted the longevity of any platform! I'm also with Charles Stanley Direct for my James Hay SIPP. Not cheap, but does what it says on the tin. However, a few years ago they were talking of ditching their execution-only platform to focus on 'advised' clients and other 'wealth management' enterprises (yucky term!).

I also held a Tradestation US account for a few years. I'm ashamed to admit I never made a single trade as I'd set it up for a Forex initiative that I never had the courage to begin in earnest!

My new money (ex-NS&I and other bank accounts paying < 0.5% pa now) is mainly being deployed into DeGiro. Can't really fault it. Low commissions, especially on US stocks at under $1 sometimes, with typically £2 for UK transactions around the £5k level, and has the big advantage that every overseas transaction (including dividends) is converted to GBP at the underlying spot rate. This really does simplify tax returns! Also I see they've recently added 500+ Hong Kong securities to the platform though I haven't dabbled there yet. So I think China is probably the only major developed market they don't cover. Cash is currently held in money market funds (which I believe have similar protection to other funds, and where you'd find a UK DC fund puts its members' cash holdings). However, they are due to introduce a deposit account soon, with standard EU protection limits. Execution is often instantaneous - none of this ''you have 15 seconds to decide if you really want to proceed'' nonsense, though I've found sometimes a UK trade is split over 3 or 4 tranches with marginally different prices; presumably they split it over more than one market maker?

My current decision is whether to bite the bullet and open an IG spread bet account. I've always regarded spread bets as a bit 'spivvy' but do see the attractions now. I once traded CFDs on advisory basis (does the name Zak Mir ring a bell?) and that was a massive disaster. My account monotonically decreased each day over 3 months until I called a halt.

fwiw, I'm not sure why the OP sings the praises of AJB - I have an ISA account with them but see nothing remarkable about the offering. Andy Bell has of course generated significant wealth for himself, just as the HL boys did!

There used to be a comprehensive platform comparison service called Lang Cat, but I fear it's gone 'professional' now and is aimed at intermediaries.

Skweeka

Having been with AJBell for just under a year for ISA and SIPP I have just instigated the transfer of my ISA from AJBell to IG and will follow up with my SIPP if IG provide a decent service. I have found getting on-line quotes from AJBell to be problematic and I also had an issue when I transferred my ISA and SIPP to them from HL which highlights IMO very poor customer service.

For those who may be interested this is what happened: The transfer from HL was protracted and I was locked out of dealing for several months and to expedite matters I ended up having to have phone conversations with both companies and even in once case passed a contact email address from one to the other. As the transfer was going to complete close to the end of the tax year I requested a cash withdrawal from my SIPP to take advantage of my tax allowance. I sent 2 secure messages which were acknowledged and made 1 phone call. The transfer completed before the tax year ended but AJBell failed to carry out my withdrawal instructions until I queried it by which time we were into the new tax year. I spoke to HMRC and was told the withdrawal could be moved to the previous year but the request would need to come from AJBell. To my surprise AJBell refused to do it and told me I would have to do it myself. I opened an official complaint with AJBell and asked them to compensate me for the lost tax which was about £300. After some back and forth they sent me a final 5 page printed letter which dismissed my complaint. As a final attempt to get the tax refunded I contacted AJBell back office staff directly via email (which I had from the transfer) to get details to pass to HMRC myself. When I told them why I wanted it I was told we can do that for you, you don't need to take any further action!!! If I could have billed AJBell for my time it would have far exceeded the money I was trying to recover.

wildshot

18th Jan '21

Thanks for the review of AJ Bell Youinvest Ben.

From a personal point of view I opened an ISA with them this tax year as a cost saving exercise. For many years I've been a paying subscriber to Shares magazine. However I found that if I held at least £4k in assets with AJ Bell then I had free access to the magazine. So I opened the account, invested in an Investment Trust I wanted to buy and now apart from that one off £10 dealing fee I only have annual custodian fees, which are a lot less that the £125pa I was paying each year for the mag.

I'm aware of the trading/access issues others have had last year during the market turmoil. This doesn't bother me much. My shares held by AJ Bell are planned as long term investments and I don't plan to be making many/any trades through the account.

The platform is much like Ben describes, some bells but not all whistles. Yet as others have pointed out if you have such as Stockopedia for research does it really matter?

sharw

Ben - a small correction - you say under the Dealing heading: "Interactive Investor, another competitor, charges £9.99 per month for an account, and then an additional £7.99 for dealing in shares, trusts and funds".

The a/c charge contains a free deal each month valid for 3 months so if you do 12 reasonably spaced deals each year then you effectively pay £2/month. ii becomes cheaper on 15 or more reasonably spaced deals a year.

Wayneskie

Just a couple of things for anybody considering AJ Bell that you should be aware of:

No Limit orders on US Stocks (not sure if this applies to other world stocks - I only have UK and US)

No Stop Loss orders on US Stocks (as above with other stocks).

Cancelled and re booked orders can take forever and even overnight if booked outside trading hours (makes updating your stop outside of trading hours very laborious).

Prices only become live when quotes are requested (although these quotes are generally within the widely advertised spread).

Contract notes can sometimes take forever. In fact a couple of my contract notes have never appeared at all.

I bought a newly listed UK share today Verici Dx (LON:VRCI) for which a Stop Loss is not available with AJ Bell (probably to do with liquidity - but it's a long shot buy anyway).

Minor quibbles buy could be important to some investors.

Mike888

In respect to fees, IG is hard to beat for ISA's, but its very much a trading platform, not a cosseting platform.

https://www.ig.com/uk/investme...

haydn parmenter

New to AJB but good so far except that there seems to be no SL facility on European stocks❓

19th Jan '21

This seems common on many UK platforms for foreign shares.

I see AJB has just got live prices.

haydn parmenter,

I refer you to my post just above.

herbie47

Do we know if this is true on IG's ISA?

I don't know about IG foreign shares stop loss as I have not bought any yet. But I don't tend to use stop losses anyway.

On the IG forum there are a few complaints about no stop losses.

HL don't have limited orders or stop losses on foreign shares.

Just checked and you can place limited orders, on US and European shares, on IG ISA platform, so I would expect you can place a stop loss also on those shares also, I don't if there is a delay on foreign share dealing or not. Seems it is not direct live quotes like the UK shares.

Re IG Herbie you are correct, they have stop loss, and guaranteed stop loss on their leveraged products but not on their physical shares platforms, ie ISA's.

Obviously a stop loss is pretty useless on large falls as you'll be taken out well below your expected limit, in this respect a guaranteed stop loss is very useful on their leveraged offering, albeit the margins can be so large on small caps that they tend to be pretty useless in practice.

My rule of thumb on speculative, smaller caps is to expect, on bad news, to lose upto 40% of that position. If that keeps me awake at night, then don't enter the trade or make it a size that I can sleep at night. Larger caps not such an issue, although years ago when Lamprell was a FTSE 100 company I got proper burnt on leverage. Your hardest lessons are always the most valuable. "When you don't get what you want, what you do get is experience"

AJ Bell Youinvest Review

Commission and Fees

Dealing

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Ben Hobson

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