AJ Bell is launching an app with a 0.15% fee – a third of the price of Hargreaves Lansdown’s platform fee.
Dodl will launch in H1 2022 and offer investors a selection of 50 shares and 25 funds to invest in. It will offer a savings Isas, Lifetime Isas, pension and general investment accounts.
AJ Bell’s six low-cost multi-asset funds will be available on the app as well as its Responsible Growth fund.
In a press release, AJ Bell said its 0.15% fee places it among the lowest cost platforms on the market. It is a third of the price of Hargreaves Lansdown’s platform fee.
‘Half the price of your average robo’
Boring Money data shows the DIY investing market has grown to £360bn in assets under administration this year with one in 10 of those investors having only started in the last 12 months.
Around half of investors complete investing transactions on mobile, Boring Money said.
Boring Money chief executive Holly Mackay thought 50 shares and 25 funds would satisfy many people’s requirements and noted it comes 30 basis points cheaper than Hargreaves Lansdown.
“Subject to availability, it will also enable someone to hold a mainstream passive multi-asset fund such as Vanguard’s LifeStrategy, for a total cost of 0.37% a year,” Mackay said. “That’s half the price of your average robo, which arguably does a similar thing. It sounds like a really positive development to me.”
CWC Research director Clive Waller said the launch was excellent news. “The more serious options there are for investors, young and old, with large or small amounts, the better.”
Nutmeg, acquired by JP Morgan in June, would be Dodl’s biggest competitor, Waller said, although he also made note of Open Money. “It has a genuine focus on people with little capital and also has an advice option.”
Despite the app being positioned for newer investors, Mackay thought the bulk of interest off the back of today’s announcement would be affluent 40 and 50-somethings, with a relatively mainstream buy and hold portfolio.
Waller questioned whether AJ Bell would differentiate its D2C platform, YouInvest, in future to focus on more experienced investors.
See also: Can Lloyds stem the £10bn it bleeds to D2C platforms each year?
Dodl’s ‘friendly monsters’
Dodl has used “friendly monsters” in its branding (right) to show that investing doesn’t have to be scary, said AJ Bell chief executive Andy Bell.
“With a low annual charge of 0.15%, no trading commissions and all the main tax efficient products, Dodl will be amongst the cheapest and best value investment platforms in the market.
“Our friendly monsters will guide people through the investment process with no jargon and introduce them to an investment range that is easy to choose from and caters for the investment needs of the majority of people”
See also: See ya, squirrel – Nutmeg refreshes look as client base matures
