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3 Dec 2021

AJ Bell to take on Revolut and Freetrade with commission-free trading app Dodl

The new platform will offer an annual fee of 0.15% and zero trading fees

AJ Bell is launching a commission-free investment app to attract younger customers pouring into the investment market.

Dodl, set to launch in the first half of 2022, will let investors buy and sell a range of investments without any trading fees - and with an annual charge of just 0.15%, it will be one of the cheapest investment platforms in the market.

But will the platform offer good value? Here, Which? looks at how Dodl's charges and range of investments will measure up to rivals.

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Why is AJ Bell launching Dodl?

In recent years, investment platforms have reported a surge in customer sign-ups - many of them from young first-time investors.

A high proportion of these customers have flocked to new investing apps such as Freetrade and Revolut for their commission-free trading and low monthly costs.

AJ Bell's decision to launch a cut-price investing app shows established platforms are under pressure to offer cheaper options as competition for young investors heats up.

What investments will Dodl offer?

Dodl, which will sit alongside AJ Bell's existing investment platform Youinvest, will be aimed at new investors and offer a simplified investment journey.

Its customers will benefit from tax-free wrappers such as Individual Savings Accounts (Isas) and a self-invested personal pension (Sipp).

The platform will offer 50 UK shares and 30 funds at launch, with aims to add US shares and funds later down the line.

The UK shares available will include Lloyds, Rolls-Royce, BT, Greggs and EasyJet.

The fund range will include AJ Bell's six multi-asset Passive funds and also its Responsible Growth Fund, for those who want to invest in companies with stronger environmental, social and governance (ESG) credentials.

The remaining 23 funds will be external and will include the three largest Vanguard LifeStrategy funds.

AJ Bell says there will also be around 15 themed investments - managed in-house - focused on equities from markets like the US, Europe, and Japan, asset classes such as bonds, property and infrastructure, and specialist themes such as ethical, technology, robotics, healthcare and climate change.

All funds will be tracker funds, meaning they won't involve an active stockpicker.

AJ Bell says it will monitor demand from other markets before considering adding other stocks from outside the UK or US.

What will Dodl charge investors?

Dodl will charge an annual fee of 0.15%, the same that Which? Recommended Provider, Vanguard charges per year.

Here's how much that will cost you depending on the value of your account:

AccountAnnual fee
£10,000 Isa£15
£20,000 Isa£30
£50,000 pension£75

Bear in mind that the 0.15% charge isn't the only fee you'll pay. You've also have to pay the ongoing cost associated with the funds you invest in. According to AJ Bell, the underlying fund fees range from 0.05% to 0.4%.

How do its investment options compare?

Although Dodl matches Vanguard on its annual charge, it offers a much more varied range of investment options.

Vanguard lets you invest in over 75 of its own funds, but not in external funds, investment trusts, and company shares.

Meanwhile, with Freetrade, the range of investments is restricted to US and UK stocks, exchange-traded funds ( ETFs), and investment trusts.

AJ Bell also offers a Lifetime Isa, not currently available with either Vanguard or Freetrade.

Should Youinvest customers switch to Dodl?

AJ Bell's other platform Younivest charges an account fee of 0.25% - and a share dealing fee of £9.95 - so existing customers may be considering moving to Dodl to cut costs.

But Dodl has a much narrower range of investment options compared to Youinvest, which gives you access to over 2,000 funds, shares across 24 markets and a wide variety of investments such as investment trusts.

Also, for Youinvest customers with a portfolio of shares, who don't trade often, switching may not be more affordable. Youinvest's custody charge for shares is capped at £3.50 a month (£42 a year).

Is Dodl the best platform for you?

AJ Bell is a Which? Recommended Provider (WRP), having received high customer scores in the past for the quality of its online tools, customer service and investment information.

However, whether its new platform is the right fit for you depends on the size of your portfolio and your investment style.

It costs just £30 a year to hold a £20,000 ISA with Dodl, whereas it will cost you £36 at Freetrade, making Dodl a good option for investors with a modest pot of money.

But for investors with a larger portfolio, the flat fee structure of Freetrade, or more established players like Halifax Share Dealing or Interactive Investor, will be cheaper.

The other thing to consider before opening an account with Dodl is whether you're likely to benefit from its commission-free trading. This is mainly advantageous for those who like to buy and sell stocks and funds regularly.

Investors with bigger investment pots who prefer to buy-and-hold rather than trade actively may be better off elsewhere.

New to investing? Check out our guides

Investing your money for the first time is a big step.

We've got lots of guides that can help you on your journey:

If you can afford to, it could be worth getting a financial adviser so you don't end up with something unsuitable.