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Guide contents
Investment platform charges usually come in different types. This can make it tricky to work out how much you’ll pay overall.
Here we’ll explain how investment platform charges work – helping you understand what you’re paying for and how to compare different platforms.
Dealing charge
What is it?
A charge for buying or selling investments. Usually a fixed sum but can be a percentage of the amount you’re buying or selling. You’ll typically pay this charge at the same time you make your trade.
For the stockbroking services provided by your investment platform, who execute your trade for you.
What's AJ Bell's dealing charge?We like to keep our charges low and simple. That’s why it’s only £1.50 to buy and sell funds online, and £5.00 to buy and sell shares online. (If you make more than 10 share deals a month, your shares dealing charge drops to £3.50).
What else is this charge called?- Transaction fee
- Buy commission
- Equity dealing charge
Dealing charges are included in the contract total when you buy or sell an investment. We’ll collect your dealing charge at the point you place a deal.
Account charge
What is it?
A charge for using an investment platform. Usually, a percentage of the amount of assets you hold on the platform, but can be a fixed sum. For most platforms, it's a ‘per annum’ charge, and deducted monthly.
For the administration services your platform carries out. This includes holding your investments and cash, allowing online access to your portfolio, and generating reports and information to help you manage your investments.
What’s AJ Bell’s account charge?We look at the value of the investments in your account, and charge you 0.25% of that value divided by 12 each month. If you hold more than £250,000 in your account, your account charge will be even lower. We’ve put monthly caps across all our accounts to make sure that you never pay more than 0.25%.
There’s no account charge for cash you hold with us. You can find the monthly caps for each of our accounts in our charges and rates.
What else is this charge called?- Service charge
- Platform charge
- Platform management fee
- Custody fee
- Annual management fee
- Administration fee
- Ongoing platform fee
- Portfolio charge
We collect account charges monthly – usually within 20 business days of the month end. Our account charge is based on the mid-price value of your account’s investments on the last working day of the month.
We'll collect your account charge for your SIPP, ISA or Dealing account from the available cash you have in that account. So you need to make sure you’ve enough cash in each account to cover this charge when it’s due.
If you prefer, you can pay the account charges for all your accounts (SIPP, ISA etc) from the cash in your Dealing account. To set this up, make sure you've opened a Dealing account, then email customermaintenance@ajbell.co.uk to ask us to collect all your account charges from your Dealing account.
Charges for tax wrappers
What is it?
Some investment platforms charge you separately for the tax wrapper (i.e. SIPP or ISA etc.) in which you hold your investments. This can be fixed amount, or a percentage of the amount you hold in the wrapper.
For the service of administering your portfolio in your tax wrapper, each of which has different rules about tax and access.
What’s AJ Bell’s tax wrapper charge?We don't have a separate tax wrapper charge. The cap on our shares account charge varies per account, so you may pay more or less depending on the account you're using. You can see the monthly caps for each of our accounts by visiting our charges and rates.
What else is this charge called?- Wrapper charge
- Portfolio charge
- Investment wrapper charge
- Account ongoing charge
- Pension or ISA fee
This service is included in your standard account charge that you pay each month. There is no extra charge to pay.
Case study
Aida has a Stocks and shares ISA worth £55,000. This includes £25,000 in shares, and £30,000 in funds.
The table below shows what charges Aida would pay based on two share deals and four fund deals in a year.
|
Charge type |
Aida pays |
Annual total | |
|---|---|---|---|
|
Account charge |
Shares |
£3.50 per month |
£117.00 |
|
Funds |
£6.25 per month |
||
|
Dealing charge |
Share deals |
2 share deals at £5.00 each |
£ 16.00 |
|
Fund deals |
4 fund deals at £1.50 each |
||
|
£133.00 |
|||
For simplicity, we have not factored in investment growth to the above examples.
- Other charges
- What else you need to considerIs a charge ‘tiered’?
Some charges increase or decrease depending on the value of your account, or size of your transaction. This is known as a ‘tiered’ charge. For instance, an account worth £60,000 may incur a different charge rate than an account worth £600,000.
A tiered charge may also mean that different charge rates apply to the same account. At AJ Bell, we have a tiered annual funds account charge. For example, if you hold funds worth £500,000 in your account, you'll be charged 0.25% for the first £250,000 of your funds, and 0.10% for the second £250,000.
£s or percentages?Charges are usually expressed in terms of pounds or percentages. If your account is worth £100,000, a charge of ‘£200 a year’ or ‘0.2% per annum’ would come to the same amount.
We'll help you get investing
For over 25 years, AJ Bell has made investing simple and affordable. We’re a 5x Which? Recommended Provider, with an award-winning range of accounts.
Can we help?
If you’d like more information about AJ Bell’s accounts and services, get in touch with our friendly customer services team - we’re here to help.