AJ Bell has pledged to plough more money into the technology underpinning its platform after its systems floundered during one of its busiest trading days on record.
Along with Hargreaves Lansdown and Fidelity Personal Investing, AJ Bell suffered outages across its platform on 9 November after a barrage of trading activity off the back of Joe Biden’s presidential win and positive Covid vaccine news from Pfizer/BioNTech resulting in millions to miss out on one of the biggest market rallies.
The meltdown prompted concerns that Britain’s biggest platforms might be struggling to maintain their operational resilience, which the Financial Conduct Authority has become increasingly worried about, as customer numbers exploded during the global pandemic.
Andy Bell addresses November meltdown
In the platform giant’s full year results CEO Andy Bell (pictured) said the ongoing market volatility and record dealing activity had presented operational challenges for the entire industry but said that overall, AJ Bell’s platform had “performed strongly in the year”.
Addressing the technical glitches early last month Bell said: “While the total number of real-time trades placed on our D2C platform on 9 November was one of the highest on record, some of our customers, regrettably, experienced intermittent service issues during the afternoon. A full service was restored by the end of the day as our real-time monitoring and alerting capabilities triggered corrective actions over the course of the afternoon.
“We have carried out a detailed root-cause analysis and taken additional steps since the incident to further strengthen the resilience of our platform during times of unexpected market activity and volatility.”
Bell went on to say that AJ Bell has been continually investing in its technology solution to keep pace with its climbing customer numbers. This year it poured £20.0m into technology costs, up 13% from 2019 when it spent £17.8m. During the period customers grew by a record 63,239 to 295,305, up 27% on 2019.
Months before the issues on 9 November Bell said the board had approved a “significant further investment in cloud-based technology” to ensure the “platform remains scalable”.
Website hiccups continue
However, on the day of its final results several customers flagged AJ Bell’s Youinvest platform was encountering problems once again.
“Bit of an own goal on the day of results to have your website down eh @AJBellYouinvest?” one person tweeted. “Not quite the ‘operational resilience has allowed us to deliver a high-quality service to our customers throughout the year’ your chairman wrote about…”
Portfolio Adviser reached out to AJ Bell about problems with its website on Thursday but did not hear back in time for publication.
On 24 November users also reported problems logging on to their accounts though AJ Bell said this situation was unrelated to the issues on 9 November and had only prevented a “small number of customers from logging in for a period of less than 10 minutes”.
AJ Bell hikes custody charges for shares
Aside from its technical hiccups, customers were grumbling earlier this week about AJ Bell deciding to hike the cap on Youinvest’s 0.25% platform charge for shares held in Sipps, Isas and Junior Isas.
From 1 January 2021 customers who hold shares in a Sipp or Junior Sipp will see their annual charges rise from £100 to £120 a year as AJ Bell replaces its existing £25 per quarter cap with a £10 per month cap.
The move affects customers holding shares of over £40,000 where the old £100 cap kicked in. The new £120 cap takes effect at £48,000.
Meanwhile custody charges for the Stocks and shares Isa, Lifetime Isa and dealing account will raise from £7.50 per quarter to £3.50 per month, while Junior Isa holders will see charges go up from £5 per quarter to £2.50 per month. This will result in the former’s annual charge cap increasing from £30 to £42 and the latter’s from £20 to £30.
The changes apply to Isa, Lisa and dealing account holders with over £12,000 in shares, with the £42 cap kicking in at £16,800, and Jisa holders with over £8,000 in shares, with the £30 cap coming into play at £12,000.
There is no change to custody charges for funds as fees are not capped.
Although custody charges have been increased, AJ Bell dropped pension drawdown charges and has lowered Sipp exit fees.
AJ Bell reported a 29% increase in profits to £48.m for the year ended 30 September 2020. Revenue was up 21% to £126.7m as assets under administration grew 8% to £56.5bn during the year.
Correction: An earlier version of this article implied AJ Bell was increasing its 0.25% share custody charge instead of the cap on the share custody charge and did not specify that only D2C customers would be impacted.
