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All hotting up – AXA Self Investor declares its hand

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So here we go with the first of the week’s pricing launches in the direct platform space. AXA Self Investor (disclosure: ASI is a client of the lang cat) has been around for a wee while, but hasn’t really pushed it in the direct space; preferring to test out instead whether it could act as a third-party white-labelled platform for advisers.

That’s all about to change though, and we have a new shape to play with. ASI is going for the so-simple-it-hurts card. Here’s what it has to offer:

  • Stocks & shares ISA only
  • A flat 50bps (0.50%) charge with no reductions for large pots
  • No trading charges
  • All clean funds (no rebates or loyalty bonuses or whatever)
  • No investment trusts / ETFs / shares
  • No exit charges
  • A first-year-free deal – all charges waived until 1 May 2015
  • Er…
  • …that’s it

If there are additional charges for paper statements etc then we haven’t seen them.

And here we are in your actual British Pounds:

So what have we learned? Well, the colours tell you most of what you need to know. Bear in mind that we’ve still assumed 10 trades a year in this table – for consistency mainly – and a £10,000 investment. We haven’t included the impact of the first free year – over a 5 year period that’s worth about £62 (£50 plus some growth that you wouldn’t have had otherwise).

ASI’s palindromic proposition is ISA only (ASI ISA, geddit?) and is plainly aimed at small investors. That is to say, investors with small portfolios; their exact physical attributes are most likely not material for our needs. You’d think twice before sticking £500k on there, but at £5k to £20k or so, it’s broadly OK. You can get cheaper from Charles Stanley.

We think ASI will go big on guidance for newbie or un-confident investors, and that’s fair enough. The first year deal and no transfer-out charge should make it a no-brainer for those just wanting to try something – if you hate it then you can jump ship later.

Not all that much more to say, really. It’s unlikely that ASI will meet the fund pricing deals negotiated by HL’s best friends club, so once again you’ll have to wait for 1 March to see what’s what if you are looking for forensic comparison. But yes, HL will be cheaper than ASI by a couple of quid, if you stick to vanilla mutual funds and never transfer out, as will Charles Stanley (by considerably more) at all points. You pays your money and all that.

Back to HL

Now, there’s been lots of controversy about HL since last Weds, not least as a result of the BBC’s MoneyBox programme at the weekend. A few thoughts:

  • Don’t make an investment decision based on one guy’s performance on a radio show.
  • Those transfer out charges really are silly. But you have a wee while to get out on the current terms (free if you transfer in cash)
  • Competitors are lining up to take a swing – see the Telegraph’s piece on Alliance Trust Saving’s special offer for one example (and here for the offer itself). Cashback! (as Alan Partridge once said)
  • The HL spokesman said it was sparking ‘a price war’ – no, it’s not. It could have, but isn’t. Even with best mate fund deals, HL will remain relatively fully priced compared to others. Don’t go for the rhetoric, do the sums. If you feel HL gives service that’s worth the money – excellent. If not, that’s fine too. Plenty of choice in this space.

Finally, we expect Fidelity to launch its pricing strategy tomorrow. We’ll be all over that; check back on the day for more.

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About Mark Polson

lang cat founder and boss. Expert on all things platforms, pensions and investments. Prolific writer and public speaker, even when people ask him not to be. Knows more about Scandinavian black metal than you, and isn't afraid to prove it.