Insider - May 2024

With a busy six months of regulatory changes and platform improvements behind us, and the announcement of a summer general election, this issue of Insider recaps the things we’ve been working on, what’s on the horizon and what they could all mean for you and your clients.

AJ Bell’s interim results

We recently announced AJ Bell’s interim results for the six-month period ended 31 March 2024, and I’m pleased to say it was yet another positive set of figures. Continued strong organic growth has resulted in a further 27,000 new customers pushing us past the half-million mark, and has attracted net inflows of £2.9 billion – taking our assets under administration to £80.3 billion. With increased revenue of £131.3 million, our profit before tax has grown to £61.4 million.

The foundation for our success has always come from the continued support that we receive from financial advisers up and down the UK. I would like to thank everyone that has contributed to this over the years; your business and continued support is much appreciated and never taken for granted.

Supporting you through regulatory change

The Government’s decision to scrap the LTA was a significant change that could have serious implications for your clients, now and in the future. To help you understand the new rules and how they could affect your clients, whether they’re planning to take pension payments or have already started, we have added a new LTA Transitional arrangements support page, featuring explainer articles, example scenarios, FAQs and more.

We’ve also added resources to our Techcentre – including short, easily digestible videos – to help you navigate the new post-LTA pensions landscape. I hope you find it all useful.

You may already know that some of the legislation was written incorrectly, creating potential tax implications for clients who request certain transfer, lump sum and death benefit payments. Like most SIPP providers, we’re following HMRC’s guidance on these payments until the legislation is amended – we’ll never block any request, but we’ll write to you and your client if they’re affected, explaining the implications of progressing or delaying their request to help them make a fully informed decision. We’ll also let you know as soon as the legislation has been corrected.

ISA complications

Amidst all the noise of the LTA abolition, you could be forgiven if the changes to the ISA regime passed you by. It’s an ongoing frustration that the rules, if anything, are becoming more complicated. With this in mind, we have written a summary of the short list of supporting changes we made to our Terms & Conditions, and you’ll find articles from our Technical experts on Infocentre.

We and other providers continue to press HMRC for clarity on the apparent conflicts between their guidance and the regulations for partial transfers of current year ISA subscriptions. The rule changes were implemented before HRMC’s reporting processes were adapted to accommodate the new flexibility, leaving customers exposed to potential over-reporting of their subscriptions.

We’ll keep you updated on progress, and hope to be able to accept the full range of transfers into our ISA soon.

General election

I’m sure many of you were as surprised as we were by Rishi Sunak’s announcement last week.

One benefit of a July election date might just be the limited scope for boundless speculation about what a change in government will mean for the usual suspects – allowances, tax free cash and tax regimes.

If the results of the recent local elections are any indication of the likely outcome, then we could be facing yet more significant changes to savings and tax policies that result in another round of changes for you, your clients and all product providers. As always, we’ll provide you with as much technical insight and guidance as we can when details emerge.

Changes to your support in the North West

With businesses continuing to flourish around the UK, we regularly review how best to support all adviser users of our platform around the regions. I’m delighted to announce that we have increased that support in the North West with the appointment of two Business Development Managers.

Jon Bowden is your contact for the northern area of the North West region, with Ryan Meredith supporting the South. Both Jon and Ryan are longstanding AJ Bell employees who bring a wealth of experience of the platform and all aspects of AJ Bell to the region and I know from speaking to them that they look forward to catching up and working with you.

Jon Bowden (left), Ryan Meredith (right)

You can find more information about Jon, Ryan and their support teams via their North West (North) and North West (South) support pages.

A streamlined client onboarding experience

Our new onboarding process has been built with significant feedback from advisers with the aim of making the process quicker and more efficient. We have removed the need to rekey client information multiple times, helping you to add new clients faster and giving you easy access to the key documents you’ll need as you go through the application process, such as KIIDs, transfer forms, and Terms & Conditions. We have also integrated investment-specific illustrations and pre-sale costs and charges disclosures.

You’ll find a step-by-step user guide to the new onboarding process here, and we’ll be in touch soon about some further enhancements to the process.

Enhanced platform functionality

In recent months, we’ve also:

• Reduced the minimum regular investment amount to just £2.50.
• Added new functionality enabling you to change clients’ nominated bank account details online.

You can find more details on our functionality page, and we’ll continue to write to you as we release new developments over the coming months.

Our super Customer Service Team

The buildup to tax year end was even busier than usual this year, thanks to both the end of the lifetime allowance, and the new ISA rules.

Despite these extra pressures, I’m pleased to say that our remarkable support teams met the challenge head on and did an amazing job. Here are some keys stats that show exactly how well the teams delivered over that hectic period:

We are proud of our record on service and will continue to invest in technology and our staff to ensure that we remain perfectly armed to maintain our performance and numbers like this.

Charges down; interest rates up

Over my years at AJ Bell I have lost count of the number of times we have reduced charges. A central pillar of our strategy has always been to create efficiencies that, where possible, are passed back to the customer in the shape of reduced charges. In case you missed it, the most recent example saw us reduce our charges in April – the changes included:

• a reduced annual custody charge of just 0.175% p.a. for assets between £500,000 and £1 million;
• a reduced annual custody charge of only 0.075% p.a. for assets between £1.5 million and £2 million;
• a custody charge capped at £2 million of assets;
• removal of the £60 plus VAT charge for in specie SIPP transfers into the F&SS; and
• removal of the £75 plus VAT charge for converting from an RIA to a SIPP.

We announced that your clients will be receiving higher interest payments, too. Starting from 1 April, they now earn the following rates on cash held in all AJ Bell Investcentre accounts:

• £0 to £10,000 – 2.60%
• £10,000 to £50,000 – 2.70%
• More than £50,000 – 3.40%

Third Party MPS additions

In response to popular demand, we’ve added more choice to our panel of third-party MPS providers, with PortfolioMetrix, Evelyn Partners and, most recently, EBI joining the service.

More additions are waiting in the wings, and will be announced as soon as they become available.

The Investment Asset

Our experienced in-house Investments Team produces a huge amount of useful, investment-related content. To make it easier for you search through and access this information we have brought it all together in one place – The Investment Asset – covering a range of topics from analysis of changing macro-economic trends to global market insights.

You’ll also find performance updates and key portfolio literature for our range of AJ Bell Funds and MPS portfolios. Our commitment to passing on savings from economies of scale means you and your clients can benefit from a capped OCF of just 0.31% on our funds, a competitive AMC of 0.15% for our Managed Portfolios and nil AMC on our platform-exclusive Money Market MPS portfolio.

If you haven’t already, why not take a look?