Comparing AJ Bell vs Hargreaves Lansdown: Which Platforms Suits You?

AJ Bell and Hargreaves Lansdown are two of the largest investment platforms in the UK. From newbies to seasoned pros, both AJ Bell and Hargreaves Lansdown offer unique features, fees, and services. This blog will compare these two leading investment platforms based on investment products, fees, user experience, and more.

A Simple Introduction: AJ Bell vs Hargreaves Lansdown

AJ Bell

AJ Bell is a low-cost platform with straightforward offerings. Known for its affordability and transparency, AJ Bell is for DIY investors who seek various investment options without breaking the bank.

Hargreaves Lansdown

Hargreaves Lansdown, on the other hand, is known for good customer service and has an efficient website and app. It targets both beginner and experienced investors and offers guidance and research tools to help them with their investment journey.

Key Difference

AJ Bell has lower fees, while Hargreaves Lansdown has more investment guidance and resources.

AJ Bell vs Hargreaves Lansdown: Investment Fees and Charges

Platform Fees

AJ Bell:

• Charges 0.25% annually on portfolios up to £250,000 (capped at £3.50 per month for shares).
• Offers lower fees compared to many competitors. A preferred choice for cost-conscious investors.

Hargreaves Lansdown:

• Charges 0.45% annually on funds up to £250,000 (capped at £45 annually for shares).
• Slightly higher fees, especially for smaller portfolios, but offers more extensive customer service and support.

Dealing Fees

AJ Bell:

• Fund trades cost £1.50.
• Share trades cost £9.95 (or £4.95 for frequent traders).

Hargreaves Lansdown:

• Fund trades are free.
• Share trades cost £11.95 (reduced to £5.95 for frequent traders).

Key Insight: AJ Bell’s lower dealing fees give it an edge for active traders who execute frequent trades.

Additional Costs

• Both AJ Bell and Hargreaves Lansdown charge fees for foreign exchange conversions on overseas shares, but AJ Bell generally has lower costs for international trading.
• AJ Bell recently launched a low-cost investment app called Dodl. It reduces entry barriers for younger investors.

AJ Bell vs Hargreaves Lansdown: Investment Products and Services

Both AJ Bell and Hargreaves Lansdown provide robust mobile applications for iPhone and Android users, and both offer a variety of investment accounts:

Individual Savings Accounts (ISAs)

AJ Bell:

• Offers a Stocks and Shares ISA with competitive fees.
• You can build diversified investment portfolios using funds, shares, and ETFs.

Hargreaves Lansdown:

• Provides a wider range of ISAs, including a Cash ISA and Lifetime ISA.
• You are given fund suggestions via the Wealth Shortlist.

Self-Invested Personal Pensions (SIPPs)

AJ Bell:

• Known for its affordable SIPP fees. If you are a long-term retirement saver, you may find it attractive.

Hargreaves Lansdown:

• Offers extensive research tools and guided fund recommendations for pension planning.

General Investment Accounts (GIAs)

Both platforms provide flexible GIAs for investments outside of tax-efficient wrappers.

Ready-Made Portfolios

AJ Bell:

• Offers a range of Responsible Growth Funds for ethical investing.

Hargreaves Lansdown:

• Provides model portfolios to different risk appetites.

Please note, neither AJ Bell nor Hargreaves Lansdown offers direct leveraged trading such as spread betting or CFDs.

AJ Bell vs Hargreaves Lansdown: User Experience and Support

AJ Bell

• Interface: Simple and user-friendly, to DIY investors.
• Mobile Investment App: The Dodl app simplifies investing for beginners.
• Customer Support: Offers reliable but limited customer service compared to Hargreaves Lansdown.

Hargreaves Lansdown

• Interface: Intuitive and feature-rich, to both newbies and experienced investors.
• Mobile Investment App: The app is highly rated for its functionality. It offers tools like portfolio tracking and fund research.
• Customer Support: Renowned for excellent customer service, including financial advisers.

Key Difference: Hargreaves Lansdown offers better support and guidance, while AJ Bell focuses on simplicity and cost-effectiveness.

AJ Bell vs Hargreaves Lansdown: Investment Strategies and Guidance

Passive vs Active Investing

• AJ Bell:
  • Favours passive strategies with low-cost index funds and exchange traded funds (ETFs).
  • Ideal for long-term investors seeking minimal management.
• Hargreaves Lansdown:
  • Supports active investing with curated fund lists, research tools, and access to financial advice.

Tools and Resources

• AJ Bell:
  • Offers basic tools and calculators for investment planning.
  • The Dodl app simplifies investing for younger or beginner investors.
• Hargreaves Lansdown:
  • Provides advanced tools like fund comparisons, stock screeners, and in-depth market insights.

Key Insight: Hargreaves Lansdown offers personal financial advice, while AJ Bell does not. So Hargreaves Lansdown is better for investors seeking hands-on guidance and actively managed portfolios.

Tips to Choose Investment Platforms in the UK

1. Understand Your Investment Goals

• Short-term vs. Long-term: Decide if you’re saving for retirement, buying a home, or looking for quick gains.
• Investment Types: Determine if you want to invest in stocks, ETFs, funds, or alternative assets like cryptocurrencies.

Tip: Platforms like Hargreaves Lansdown are great for hands-on guidance, while AJ Bell is ideal for cost-effective long-term investments.

2. Compare Platform Fees

• Platform Fees: Look for flat fees vs. percentage-based fees.
• Trading Costs: Check costs for buying and selling assets like shares and funds.
• Hidden Costs: Foreign exchange fees, inactivity fees, and withdrawal charges.

Example: Platforms like Interactive Investor offer flat fees, which are cost-effective for larger portfolios.

3. Evaluate Available Investment Products

• Range of Products: Ensure the platform offers ISAs, SIPPs, GIAs, and access to global markets.
• Funds vs. Stocks: Make sure the platform has specific investment products that you want to invest in – ETFs, mutual funds, or individual stocks.

Note: If you want diversified options, choose platforms offering ready-made portfolios or investment trusts.

4. Assess User Experience

• Platform Usability: Choose platforms with simple interfaces and clear navigation.
• Mobile Apps: Ensure the platform offers a responsive and feature-rich app for trading on the go.

Tip: If you are a beginner, apps like Dodl by AJ Bell will simplify your investing. If you are a advanced trader, you may find tools provided by Hargreaves Lansdown’s app quite useful.

FAQ

1. Who is better, AJ Bell vs Hargreaves Lansdown?
It depends on your needs. AJ Bell offers lower fees, so it’s ideal for cost-conscious or frequent traders. Hargreaves Lansdown excels in customer service, research tools, and investment guidance, so it’s appealing to beginner and active investors.

2. Why is AJ Bell so affordable?
AJ Bell operates with a low-cost structure. It offers competitive platform fees and inexpensive dealing charges. Its streamlined approach focuses on value-for-money services.

3. Is Interactive Brokers cheaper than Hargreaves Lansdown?
Interactive Brokers often has lower fees for frequent traders and international shares, but Hargreaves Lansdown provides more support and resources for UK-based investors.

4. How safe are my investments with AJ Bell?
AJ Bell is regulated by the Financial Conduct Authority (FCA) and your investments are protected up to £85,000 under the Financial Services Compensation Scheme (FSCS).

5. AJ Bell vs Hargreaves Lansdown, which platform is better for beginners?
Hargreaves Lansdown is more beginner-friendly, as it offers more resources, guided fund lists, and financial advice. AJ Bell, with its affordable fees, is suitable for cost-conscious new investors.