AJ Bell Review 2024: Pros & Cons

AJ Bell stands out as a prominent investment platform, boasting an extensive history since its establishment in 1995. Renowned for its user-friendly interface, competitive fees, and diverse investment options, the UK-based broker has garnered numerous industry awards over the years. Notably, it clinched titles such as "Best Share Dealing Platform" and "Best SIPP Provider" at the Shares Awards 2021, underscoring its excellence.

Originally launched in 2000 as "AJ Bell," the platform simplified its name to just "AJ Bell" in 2022. With a substantial customer base of over 480,000 and assets under management (AUM) exceeding £69 billion, AJ Bell has established itself as a trusted online brokerage and investing platform.

Despite its longevity in the market, AJ Bell continues to maintain its popularity, serving more than 400,000 customers with a collective investment value surpassing £75 billion. With a reputation for being low-cost, AJ Bell's longevity and significant user base make it a compelling subject of investigation for those assessing its actual cost-effectiveness.

What Products Does AJ Bell Offer?

• Dealing Account (General Investment Account - GIA):
  • AJ Bell's standard investment account, subject to Capital Gains Tax on profits exceeding £6,000 annually across all investments not inside an ISA.
• Stocks & Shares ISA:
  • Allows annual tax-free investment of up to £20,000, providing a favored option for investors seeking to shield their profits from taxation.
• Stocks & Shares Lifetime ISA:
  • Geared towards individuals under 40 saving for their first home, offering tax-free savings with a 25% government bonus on contributions, up to £4,000 per year.
• Junior ISA:
  • Enables parents or guardians to invest up to £9,000 per child annually in a tax-free savings account, supporting children under 18 in building savings for their future.
• Pension (Self-Invested Personal Pension - SIPP):
  • A SIPP that grants investors full control over their investment choices, featuring a 25% government bonus on contributions, with potential tax reclaims for higher-rate taxpayers.
• Junior SIPP:
  • Tailored for children under 18, allowing parents or guardians to invest on their behalf, contributing up to £3,600 each year to assist in saving for their retirement.
• Cash Savings Hub:
  • Offers a straightforward method for earning interest on cash holdings.

AJ Bell's diverse product range caters to various investment needs, from standard dealing accounts and tax-efficient ISAs to specialized options for lifetime savings, junior investors, and retirement planning. The platform's flexibility and cost-effectiveness, especially in the case of their SIPP, make it a noteworthy choice for a range of investors.

AJ Bell Fees Overview

• Account Fee:
  • Monthly fee for holding investments, typically 0.25% of the total investment value (0.10% above £250,000). For comparison, traditional broker Hargreaves Lansdown starts at 0.45%.
• Shares and ETFs Fees:
  • Account fee of 0.25% of share value (up to £3.50 per month for GIA and ISA, £10 per month for SIPP). Trade fees start at £9.95, reducing to £4.95 with 10+ trades in the previous month.
• Investment Fund Fees:
  • Fee based on the amount within a fund: 0.25% (up to £250,000), 0.10% (£250,001 to £500,000), free over £500,000. £1.50 dealing fee to buy a fund.
• Currency Conversion Fees:
  • Varies based on the investment amount: 0.75% (up to £10,000), 0.50% (£10,001 to £20,000), 0.25% (£20,000+).
• Other Fees:
  • No withdrawal/deposit or inactivity fees.

Platform Fee:

• GIA/ISA/LISA: 0.25% of the value of investments per year (£42 max).
• SIPP/JSIPP: 0.25% of the value of investments per year (£120 max).
• JISA: 0.25% of the value of investments per year (£30 max).
• Funds (all account types): 0.25% (£0 to £250,000), 0.1% (£250,000 to £500,000), free over £500,000.

Trade Fees:

• UK, US, and International Shares: £9.95 (£4.95 with 10+ trades in the previous month).
• Funds/ETFs: £1.50.

Foreign Exchange (FX) Fee:

• 0.75% up to £10,000, 0.5% £10,000 to £20,000, 0.25% over £20,000.

Additional Features:

• Regular investing available from £25/month, with commission dropping to £1.50.

Withdrawal/Deposit Fee:

• £0.

Inactivity Fee:

• £0.

Despite AJ Bell being considered one of the cheapest traditional brokers, its fee structure, especially for stock and share trades, may not be the most cost-effective for all investors. However, it could offer good value for those focused on funds or utilizing regular investing services. The suitability of AJ Bell's fee structure depends on individual investment preferences and strategies.

AJ Bell Safety Measures

AJ Bell is considered safe, backed by regulatory oversight and protective measures:

• Regulation by Financial Conduct Authority (FCA):
  • As a regulated broker, AJ Bell falls under the authority of the Financial Conduct Authority (FCA) , ensuring compliance with stringent financial regulations and safeguarding investors' interests.
• Financial Services Compensation Scheme (FSCS) Protection:
  • Customer funds with AJ Bell are covered by the Financial Services Compensation Scheme (FSCS) , providing compensation of up to £85,000 per person in the unlikely event of insolvency or business failure.
• Segregation of Customer Funds:
  • AJ Bell segregates customer funds in separate bank accounts that the company cannot access. This practice enhances the security of client assets, ensuring they remain separate and protected.
• London Stock Exchange Membership and Industry Affiliations:
  • AJ Bell is a member of the London Stock Exchange, further establishing its credibility. Additionally, the broker is affiliated with the Investment Association and the Pensions and Lifetime Savings Association, indicating commitment to industry standards and governance.

AJ Bell's dedication to regulatory compliance, industry affiliations, and robust security measures contributes to its reputation as a safe and trustworthy investment platform.

AJ Bell Customer Support Overview

• Availability: Phone support is available on weekdays (Monday to Friday) from 8 am to 5 pm, excluding bank holidays.
• Phone Support: Clients can directly speak with customer service representatives via phone, a relatively uncommon feature in the investment business.
• Email Support: For non-urgent queries, clients can email customerservices@ajbell.co.uk. The customer support team aims to respond within 2 working days.
• Online Help Centre: AJ Bell provides an extensive online help centre, offering FAQs, guides, and informative articles to address common queries.
• Live Chat: Clients have the option to engage in live chat on the website for real-time assistance.

AJ Bell's customer support is praised for its availability through various channels, including phone and live chat, which is not common in the investment industry. The online help centre further enhances accessibility, providing resources for self-assistance. Overall, AJ Bell is recognized for its responsive and multifaceted customer support system.

AJ Bell Pros

• Well Established: Founded in 1995, AJ Bell boasts a strong reputation and extensive experience in the investment industry.
• Cheapest Traditional Broker: Offers competitive fees, positioning itself as one of the most cost-effective traditional brokers available.
• Huge Range of Investment Options: Provides a diverse array of investment options to cater to various investor preferences and strategies.
• Self-Invested Personal Pension (SIPP): Offers a SIPP for individuals seeking greater control over their retirement savings.
• Great Customer Service: Highly praised for its customer service, including phone support, live chat, and an extensive online help centre.
• Quick and Easy Account Opening: Streamlined account opening process for quick and convenient access to investment services.
• Targeted at Smaller Portfolios: Particularly suitable for smaller portfolios, making investing accessible to a broad range of investors.
• User-Friendly Platform: Features a user-friendly interface designed for ease of navigation and portfolio management.
• Earn Interest on Cash Balances: Users can earn interest on cash balances held within their accounts, providing an additional benefit.

AJ Bell Cons

• Limited Product Range: The platform's product range is perceived as limited, potentially restricting investment options compared to some competitors.
• Research and Educational Resources Could be Improved: AJ Bell's research and educational resources are identified as areas that could be enhanced to provide more comprehensive support for investors.
• Percentage Fees Become More Expensive for Larger Portfolios: While AJ Bell is considered low-cost, the percentage-based fees may become more expensive for larger portfolios, impacting cost-effectiveness.
• More Expensive Than Modern Platforms: Despite being low-cost, AJ Bell is noted to potentially be more expensive than modern investment platforms, which could offer more competitive pricing structures.

Customer Reviews

AJ Bell garners high praise from customer reviews on Trustpilot , boasting an impressive rating of 4.7 stars from 5,098 reviews. The majority of users, constituting 74%, award the platform 5 stars, highlighting the efficiency and helpfulness of the customer service.

Final Thoughts on AJ Bell

AJ Bell emerges as a reputable and trustworthy investment platform with a commendable track record of serving customers well. It stands out as one of the cheapest traditional brokers, offering a user-friendly interface on both its app and website, making it easy for investors to manage their accounts and stay informed about market news.

While AJ Bell is competitively priced, especially for portfolios up to £100,000, investors should be aware of potential charges, such as the £1.50 per fund transaction fee. The platform's strength lies in its extensive range of investments and account options, from General Investment Accounts to pensions (SIPP), providing flexibility for various investor needs.

However, AJ Bell may not be the ideal choice for those seeking a broader product range that includes unconventional options like commodities, cryptocurrencies, or peer-to-peer lending. Investors looking for commission-free trading options on more modern platforms might find alternatives like eToro appealing.

In conclusion, AJ Bell remains a popular and award-winning choice, particularly for less active investors or those consolidating ISAs and SIPPs on one platform. Its competitive pricing, diverse investment options, and solid customer service contribute to its positive reputation in the industry.