Here we look at AJ Bell Youinvest – an investment platform offering stocks and shares ISAs, dealing accounts and a self-invested pension (SIPP).
Founded in 1995, AJ Bell is one of the leading investment platforms in the UK with around 380,000 customers and £73 billion in assets under management. Its online service, Youinvest, became the country’s first online self-invested pension (SIPP) provider when it launched in 2000.
As well as the SIPP, AJ Bell Youinvest offers stocks and shares ISAs and dealing accounts. Through these, you can invest in a wide range of funds, shares, investment trusts, and exchange traded funds (ETFs). You can choose a ready-made portfolio based on a level of risk you’re comfortable with, or – if you’re more experienced/willing to do the research – pick your own investments.
Although it is set up for the more confident investor, the AJ Bell Youinvest platform is easy to navigate and has some nice guides and articles.
For those who want to take a more ‘hands off’ approach to investing, there are nine passive fund options to choose from (including a Responsible Growth Fund – see below). If you’d rather pick your own investments, the ‘Favourite Funds’ list offers a useful filter tool which includes the option to choose “responsible” funds only.
Is it safe?
Yes. AJ Bell Youinvest is covered by the Financial Services Compensation Scheme (FSCS). This protects up to £85,000 of investments per person, per platform.
Note that you will not be compensated for investments falling in value, or if a company in which you hold shares goes bust. This is unless its poor performance resulted from bad advice given by a regulated Independent Financial Advisor that has also since gone bust.
Sustainable investing option
AJ Bell Youinvest offers a Responsible Growth Fund, which takes into account environmental, social and governance (ESG) factors and screens out companies connected to industries that harm the planet and society.
Matt Brennan, Head of Investment Management, says: “The Responsible Growth Fund offers the opportunity to make a difference through your investments without compromising on performance. We’ve done this by focussing on companies that are better positioned on ESG issues whilst excluding industries that are problematic. Like all AJ Bell funds, the Responsible Growth Fund is built on the ethos of simple, transparent, low cost investment. Like the rest of our range, it’s made up of passive investments.”
The Responsible Growth Fund is made up largely of Exchange Traded Funds, or ETFs. These ‘passive’ investments mean that the money goes into a basket of companies and essentially, the asset manager sits back and keeps watch. While this style of investing is cheaper than a more active approach, it is not necessarily as positively impactful.
If you are keen to pick your own investments for your portfolio, AJ Bell’s large range of funds includes a good selection of sustainable options. It’s ‘Favourite Fund’ list, which is hand-picked by experts as being most likely to bring you a steady profit, includes the BMO Responsible Sterling Corporate Bond, Liontrust Sustainable Future Global Growth, Liontrust Sustainable Future UK Growth, and Royal London Sustainable Leaders.
Unique selling points
- Favourite Fund list. Narrow your search by criteria such as investment goal, active or tracker, or “responsible” funds only. You’ll then be able to compare three-year returns, charges and yield for each fund.
The plus points
- Low minimum investment. Monthly contributions start from £25.
- Sustainable investments. While the Responsible Growth Fund takes a passive approach (you’ll need to weigh up the lower cost against a potentially lower positive impact), AJ Bell Youinvest also now offers some excellent active sustainable funds. The company says these were added in response to customer demand for more ethical options.
- Competitively priced. Likely to be among the cheapest online investment options for all portfolio sizes.
- Passive approach of ready-made portfolios. AJ Bell uses passive ETFs – otherwise known as index trackers – to invest across markets. As these funds are not ‘actively’ managed, it makes them cheap to run. However, the flipside of this is that it’s harder to achieve a high degree of positive impact, compared with funds that have managers that actively stock pick the right companies.
Cost of use
AJ Bell Youinvest charges a 0.25 per cent fee for shares (including investment trusts, ETFs, gilts and bonds) capped at a maximum of £3.50 per month.
The same fee applies to the first £250,000 of funds (including unit trusts, open-ended investment companies and structured products). This drops to 0.10 per cent on the value of funds between £250,000 and £1 million, and again to 0.05 per cent on the value of funds between £1 million and £2 million. Anything above £2 million is free.
You will be charged between £4.95 and £9.95 to trade shares and investment trusts online, depending on the frequency. It costs £1.50 to trade unit trusts and open-ended investment company funds online.
How do these costs compare to competitors?
AJ Bell Youinvest is likely to be among the cheapest options for small and medium portfolios, whether you trade funds or shares. It’s also fairly cheap for those with larger portfolios, although some fixed-free platforms such as Interactive Investor (see below) might work out a little cheaper.
Bestinvest charges a 0.4 per cent service fee on any investments up to £250,000 (0.3 per cent cent for SIPPs). This drops to 0.2 per cent service fee between £250,000 and £1 million, and anything above £1 million is free.
Hargreaves Lansdown charges an annual fund fee of 0.45 per cent up to £250,000. This goes down to 0.25 per cent on the portion of funds between £250,000 and £1 million, and 0.1 per cent on anything between £1 million and £2 million. Anything above that is free.
AJ Bell charges an annual platform fee of 0.25 per cent up to £250,000, 0.10 per cent for £250,000 to £1 million and anything over £2 million is free.
Interactive Investor charges a fixed fee of £9.99, £13.99 or £19.99 per month depending on the plan you choose. These fees include an unlimited amount of trades. This could make it cheaper for investors with larger portfolios.