AJ Bell has overhauled the charging structure on its YouInvest platform offered to UK advisers in order to simplify the way fees are calculated.
The fund platform charge, previously 0.2 per cent capped at £200, has been redone as a graduated model to encourages clients to invest more in the service.
Charges now begin at 0.25 per cent for up to £250,000 invested, then 0.1 per cent for the next £750,000, 0.05 per cent for the following £1m, and no charge for any amount over £2m invested.
However, the service has introduced a shares custody charge of 0.25 per cent capped at £100 per annum for pensions, £30 per annum for an Isa or Gia, and £20 per annum for a Junior Isa.
The pension wrapper charge, previously £20 to £100 per year depending on value, has been dropped, as has the £50 plus VAT charge for those taking drawdown but not income.
Fees for those looking to switch funds has also been slashed from £4.95 to £1.50.
The previous £100 per annum charge for regular lump sums on pensions or £75 plus VAT for a one off transaction has been simplified to £25 plus VAT, regardless of whether or not it’s a one time only change.
Simplifying the charging structure has been welcomed by advisers, although those with an Isa valued at less than £250,000 should expect to pay more for the service.
Jeannie Boyle, technical director and chartered financial planner at EQ Investors, said: “Reducing the number and amount of ad hoc fees for various pension transactions is good news, it can be tough for clients to work out how much they will actually pay when there are a number of different charges.
“We welcome more clarity on charges. A client with an ISA worth less than £250,000 will see their annual fee go from £200 to £625 – that’s a big increase and there’s no enhancements in service in return.”
The charging changes are unlikely to deter users from continuing with the service, according to Francis Klonowski, principle at Klonowski & Co.
He said: “A change of fee structure would not by itself cause me to change. In one way it’s a shame because it comes at a time when advisers like me are questioning our own previous reliance on percentage fees, moving instead to fixed fees. But the real test is the effect on clients.”
