AJ Bell slashes investment management fees

AJ Bell slashes investment management fees

AJ Bell is to take the management of its managed portfolio service (MPS) in-house and as a result cut the fees by 40 per cent.

The price cut came into effect on 1 February 2018 and sees the annual management charge reduce from 0.25 per cent plus VAT to 0.15 per cent + VAT.  

AJ Bell has five portfolios in its managed portfolio service, with ongoing charges ranging from 0.15 per cent to 0.18 per cent, depending on risk levels, with the total cost of ownership being between 0.33 and 0.36 per cent.

Article continues after advert

At the same time, AJ Bell has brought the asset allocation decision for the managed portfolio service in-house, to be benchmarked against Distribution Technology’s Dynamic Planner Risk Ratings.

The portfolios will use the Dynamic Planner ‘risk targeted’ approach rather than the ‘risk rated’ approach to focus the portfolios on consistently targeting the right level of volatility.

Kevin Doran, chief investment officer and managing director at AJ Bell Investments said: “Our aim with the MPS is to deliver a high quality investment solution to advisers, whilst leading the market on price.  

"We’ve been focusing on making our investment process as efficient as possible and are able to pass the cost savings back to advisers and their clients in the form of lower annual fees.

“We also know that many advisers value Distribution Technology’s Gold Badge risk targeted solutions and so we will be moving to those in order to give greater certainty that the portfolios will always remain within the targeted volatility ranges.  

"This should make it easier for advisers to use the portfolios within their existing business processes and ensure there are no nasty surprises.”