AJ Bell launches a low-cost and easy to use guided investment service

The new guided investment service is easy to use and enables people to select a ready-made portfolio or build their own investment portfolio of low-cost tracker funds in just three clicks. 

The service is designed for investors who don’t want or can’t afford financial advice but are looking for better returns on their cash, while still managing risk and keeping costs low. These might be people who:

• want to access stock markets for the first time
• want to consolidate multiple small pension pots into one place with a consistent investment approach
• want to take advantage of the pension freedoms and need help with a clear investment strategy
• favour tracker funds over active management

Andy Bell, chief executive of AJ Bell, comments:

“People need to save more but are often put off by how daunting it is. Our goal with this new online guidance service is to take our customers on a simple journey ending in a diversified portfolio of low-cost tracker funds that is matched to their appetite for risk. This may be a stepping stone to full advice or DIY investing in the future but I think online guidance could be the catalyst to get a new generation of people saving.” 

How the service works:

The new service is available via AJ Bell Youinvest (www.youinvest.co.uk), one of the leading direct to consumer investment platforms, and consists of a Top Tracker list of 16 low cost funds that track a range of well-known market indices.

There are three ready-made Global Tracker Portfolios, each consisting of six funds that are drawn from AJ Bell’s Top Tracker list.  The ready-made portfolios cater for varying degrees of risk appetite – cautious, balanced and adventurous – and are designed with a medium to long term time horizon. Investors can hold the portfolios in their ISA, Junior ISA, SIPP or Dealing account.

Once they have been through the simple log-in process, customers can choose the portfolio which they feel matches the level of risk they want to take and purchase their portfolio in just three clicks.

AJ Bell will provide monthly portfolio updates, educational materials and regular commentary so investors can manage their portfolios to the best possible effect.

*Example portfolio costs for a balanced risk portfolio:
Initial dealing charges will be £29.70 in each case (£4.95 x 6 trades) and there is no ongoing AJ Bell Youinvest portfolio charge.

**When investing the full 2015/16 ISA allowance, the comparative costs of Hargreaves Lansdown’s Portfolio+ service are £278.89 pa (1.83% pa) and Fidelity’s HeadStart Portfolios £175.26 pa (1.15% pa). See pricing comparison below for further examples.

Example portfolio holdings:

Each market index is accessed by investing in a tracker fund that has been screened by AJ Bell on a number of criteria, primarily lowest cost.  This best of breed list of tracker funds is reviewed quarterly by AJ Bell’s investment committee.

Holly Mackay, founder of Boring Money, comments:

“Many people are put off investing by the absurd amount of choice and the complexity of it all. These portfolios offer a low-cost, quick and relatively simple way for less confident investors to get going. It’s an interesting development which starts to address a new type of potential investor who wants a convenient online solution with minimal choice and a competitive fee.”

Pricing comparisons:
Assumed £15,240 invested into a balanced portfolio within an ISA

These price comparisons are based on AJ Bell’s research using publicly available information only.