DIY investors rate Vanguard and AJ Bell top for value and service

Vanguard and AJ Bell Youinvest have scored best marks in a new customer survey of top DIY investment platforms, while the biggest player Hargreaves Lansdown lagged behind in sixth place.

The pair topped the survey of value for money, online tools and customer service at 11 major DIY investment platforms, following a poll of 2,000 members of influential consumer group Which?

Customer sign-ups to investing sites have soared during the pandemic, as people who have seen cash pile up during the crisis have sought better returns than the poor interest rates available in savings accounts.

Hargreaves Lansdown remains the largest DIY investment platform, and won record levels of new business over the first four months of the year, but it is increasingly being challenged by Interactive Investor and AJ Bell. 

Investing surge: People who saw cash pile up during the pandemic have sought better returns than the poor interest rates available in savings accounts

Meanwhile, US giant Vanguard is a formidable competitor due to its low cost offer – despite only offering 75 of its own funds. 

Which? notes that Vanguard reported a 130 per cent increase in users in the year to March 2021, and AJ Bell Youinvest saw a 30 per cent increase in registrations in 2020.

The group says its rankings were based on six criteria – online tools, customer service, investment information, whether it met the customer’s needs, value for money and customer score.

Vanguard received a customer score of 77 per cent while AJ Bell Youinvest got 72 per cent, and both were named a ‘Which? recommended provider’ for the third year running.

This title can only be earned if a platform does not receive any below-average scores for any of the criteria or have a customer score of less than 70 per cent, explains Which?

It says Vanguard, one of the world’s largest fund managers, was praised for being ‘straightforward’ and ‘efficient’ and was the only platform to receive five stars for value for money.

Vanguard’s fees are among the lowest on the market at just 0.15 per cent a year, capped at £375 a year for accounts over £250,000.

Meanwhile, the platform does not charge for trading funds, and ongoing costs on its funds are 0.2 per cent on average.

For investors shopping for a much bigger range of investments, AJ Bell Youinvest offers more than 2,000 funds, shares across 24 stock markets, and a more extensive range of investment information, including funds ranked by their Morningstar rating.

Which? says customers praised AJ Bell Youinvest’s ‘easy to navigate website’ and ‘excellent range of investment opportunities’.

AJ Bell costs more than Vanguard, but less than some other competitors, charging 0.25 per cent on the first £250,000 of funds, then 0.1 per cent on amounts between £250,000 and £1million.

It costs £9.95 to buy or sell a share, investment trust, exchange traded fund or bond, and 0.25 per cent to hold them, capped at £3.50 a month.

Interactive Investor, which received a customer score of 68 per cent, is a ‘cost effective option’, according to Which?

It charges a fixed monthly fee ranging from £9.99 to £19.99 depending on your plan, which makes it attractive proposition to wealthier investors with portfolios worth £50,000-plus. Interactive Investor’s £9.99 charge entitles customers to one free trade worth £7.99 per month in return.

Competition for customers: Hargreaves remains the largest DIY investment platform but it is increasingly being challenged by Interactive Investor and AJ Bell

Competition for customers: Hargreaves remains the largest DIY investment platform but it is increasingly being challenged by Interactive Investor and AJ Bell

Which? also tips Halifax Share Dealing, with a customer score of 63 per cent, as another platform worth considering for investors with larger portfolios.

It has a flat £36 annual platform fee for large portfolios, but Which? says its members complained about a lack of information on investment opportunities.

Hargreaves Lansdown finished sixth in the survey with a customer score of 66 per cent. Customers commended its ‘first class’ customer service and range of online tools, according to Which?

But the group notes that its 0.45 per cent annual fee makes it pricier than many competitors for funds.

Which? says some survey respondents said they have lost trust and feel ‘disappointed’ with the platform because it continued promoting the Woodford Equity Income fund on its Wealth 50 best buy list until it was suspended in June 2019.

Hargreaves declined to comment on the Which? survey. 

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Barclays Smart Investor finished bottom of the list for the fourth year in a row with a customer score of 48 per cent.

Which? says some members’ dissatisfaction stemmed from the provider switching its service from Barclays Stockbrokers to Barclays Smart Investor in 2017, while others cited high charges and a limited range of investments. 

The website was called ‘unbelievably complicated’ by one respondent.

Barclays told Which? that it has ‘invested a huge amount in the stability and operational strength of the platform’ since last year. 

A Barclays spokesperson says: ‘We are committed to listening to customer feedback and are always looking at ways to improve the investing experience we provide. 

‘We are starting to see the impact of recent improvements, with our platform remaining stable throughout last year’s surge in market activity and customers welcoming the launch of mobile trading. 

‘We are reviewing our pricing, to help more people start investing with smaller amounts, and are planning to launch international equities later this year.’ 

Best investing platforms: Compare the best and cheapest investment platforms and stocks & shares Isa

When it comes to choosing an investment platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming. 

Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 

When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.

To help you compare investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you. 

We would advise doing your own research and considering the points in our guide linked below before you choose.

>> Check out This is Money’s guide to the best investing platforms and Isas 

Admin charge Charges notes Fund dealing Standard share, trust, ETF dealing Regular investing Dividend reinvestment
AJ Bell YouInvest 0.25%  Max £3.50 per month for shares, trusts, ETFs.  £10 for Sipps. £1.50 £9.95 £1.50 1% (Min £1.50, max £9.95)  More details
Bestinvest 0.40% n/a Free £7.50 n/a n/a More details
Charles Stanley Direct 0.25%  Platform charge waived on shares if one trade in that month. Annual min £24 and max of £240 on shares. Free £11.50 n/a n/a More details
Fidelity 0.35% on funds £45 flat fee up to £7,500. Max £45 per year for trusts and ETFs (Some shares) Free £10 Free funds £1.50 shares, trusts ETFs £1.50 More details
Hargreaves Lansdown 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 £1.50 1% (£1 min, £10 max) More details
Interactive Investor  £119.88 for standard account / £9.99 per month £7.99 per month back in trading credit lasting 90 days  £7.99 £7.99 Free £0.99 More details
iWeb £100 one-off £5 £5 n/a 2%, max £5 More details
Vanguard  0.15%  No fee above £250k (£365 cap)
Only Vanguard funds
Free  Free only Vanguard ETFs  Free  n/a  More details 
(Source: Jan 2021 Admin charges quoted annually, may be collected monthly or quarterly)


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