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YouInvest (Formerly Sippdeal) by AJ Bell Review
The information in this hub is not updated daily. Always double check the information against the providers website. The opinions provided are my own and I am not affiliated with AJ Bell other than as a client.
The Not So Good
- No dividend reinvestment available
- Prohibitively high charges for low cost funds (excluding ETF's)
- High minimums for frequent trader discounts
- No annual administration fee
- Low dealing commissions
- Large selection of funds
- Helpful staff
- Transfer in offer and refer a friend available
A Peak into the Dealing Site
Overview by Investor Type
Access to ETF's but custody charge makes index funds much more expensive
Your spoiled for choice, with good discounts on offer but watch out for custody charges on some funds
Probably not the best provider for you
YouInvest is part of AJ Bell which is one of the biggest brokers in the UK. An interesting thing to bear in mind when comparing YouInvest to other brokers/platforms is that AJ Bell is often the company running other peoples services. For example at the time of writing Barclay's SIPP is run by AJ Bell. This is probably a good explanation of why YouInvest looks cheaper than many others. Another thing worth knowing is that AJ Bells’ biggest shareholder is Invesco Perpetual.
Every year I trawl through every stocks and shares ISA provider in Britain (I have a list) and decide which is the best for my needs. I've decided on YouInvest with Hargreaves Lansdown being a close runner up. I’d advise you to review your investment provider every year as the industry is becoming highly competitive and thus good deals can often be found by those who seek them out.
What I like
To be honest the number one reason that I moved to YouInvest is because they don’t charge an annual management charge (AMC). The importance of avoiding this fee cannot be underestimated. If you have a small portfolio and have to hand over 0.5% of it each year that can seriously reduce your returns over time. If you have a big portfolio and your charges are capped this may be less important but still worth saving on.
If you are a fund investor you will find that you get an insane number of funds to choose from (though watch out for the custody charge). As AJ Bell is a very large provider they are able to negotiate big discounts and offer rebates.
I’ve also found the staff to be well trained, professional and honest (no patter or excuses). Every time I’ve got in contact they have solved my problem and exceeded expectations. I’ve found their customer service to be almost on par with that of Hargreaves Lansdown (the best customer service I have ever experienced). Though I still would prefer it if they used an 0800 number as opposed to an 0845 number.
I also like the dealing site, the portfolio management tools and the research provided. They provide everything that you could reasonably need and, better still, the research is provided by Morningstar which is highly detailed and very reliable.
Finally when switching broker you should always look for perks or ways to lower switching costs. For a while AJ Bell was running a transfer in offer for ISA and SIPPS but I don’t know if it will still be active so I’d check the website for details. Also, at the time of writing they have a “refer a friend” which pays you £100 if you can get a friend to credit/transfer enough money into YouInvest.
What I don’t Like
Probably the biggest disadvantage in my opinion is the lack of a low cost dividend reinvestment plan. The consequence of this is that you have to sit on cash waiting for enough of your dividends to build up so that you can put in a trade (e.g. reinvesting a £100 dividend at current commissions would eat up 10% of the dividend so its uneconomical to do this). I also wish they would create a smart deal like Equiniti (where they pool trades together to offer a much lower commission) but that’s not a big deal (pun unintended). Just if anyone from AJ bell is reading this...
Another thing that potential investors should bear in mind is that YouInvest does not provide the same level of hand holding as other providers. For example HL has an in house research team, internet TV show, investment magazine and detailed investment research while YouInvest leaves to do all their own research with little support. But that’s not to say that their research services are bad – their research centre provides all you really need. YouInvest is aimed at slightly more sophisticated investors who are reasonable financially literate. When it comes to DIY investing YouInvest is about as DIY as it gets – which I’m totally fine with.
One class of people I would not recommend YouInvest to is very active traders as other brokers offer better frequent trader rates. One of the best to look into is Interactive Brokers. At the time of writing YouInvest requires that you place 10 trades in one month before you can get the frequent trader rate – at a cost of almost £100. But for the majority of sane investors (no sane person should trade more than 10 times per month) the brokerage fees at AJ Bell are very reasonable.
Another problem which is common to most providers is prohibitive fees charged on low cost funds such as those provided by Vanguard. To these they apply a “custody charge” which is very expensive and only economically viable for very large portfolios. I suspect this is to prevent you investing in funds which don’t pay AJ Bell any commission which is unsurprising as their not a charity. However, you can still of course invest in ETF’s (funds listed on a stock exchange) and you’ll only have to bay brokerage.
Note: also watch out for funds which have a custody charge and standard (1.5% or so) management fees.