AJ Bell’s Dodl 0% Commission Trading App to Grab Newbie Investors

London Stock Exchange-listed investment platform AJ Bell is launching Dodl, a commission-free stock-trading app to compete against tech savvy newcomers in the booming retail investment sector.

The standalone app is launching in the first half of 2022 as AJ Bell seek’s to capture a slice of the business from the millions of beginners who have started to invest in stocks in recent years.

In order to better the offerings from platforms such as Freetrade, in addition to charging no commission on buying and selling shares, the annual charge will be just 15 basis points (0.15%). The minimum account size is £1.

Also, Dodl compares favourably with the competition from the so-called robo-advisors, and is also highly competitively positioned alongside the likes of its established competitors, notably market leader Hargreaves Lansdown, which has an annual charge of 0.45% on the value of client portfolios.

The new product also competes with AJ Bell’s main service Youinvest, although it has a cap on the annual charge amount of £42 for individual savings accounts (ISAs) and dealing accounts (£120 for self-invested personal pensions). AJ Bell Youinvest charges 0.25% annual charge for most types of accounts with no cap.

Dodl takes on trading apps, robo-advisors and familiar established broker competition

Dodl will tend to be cheaper for small pots but is still competitive for investors with larger buy and hold portfolios that might be attracted to the robo-advisor approach currently offered by platforms such as Wealthify, Nutmeg (owned by JPMorgan), MoneyFarm and even the Copy Portfolios provided by fast-growing eToro.

Dodl will list a limited number of just 50 shares and 25 external funds at launch, although US-listed stocks will be added soon after launch. Many of the funds will be packaged into investment themes, such as responsible investing, tech and healthcare.

In addition to the external funds, Dodl will be offering its multi-asset funds built around a menu of risk profiles.

In addition to a general investment account, Dodl will offer an ISA, Lifetime ISA and pension.

Prospective customers will be able to transfer existing ISAs and pensions and set up regular contributions using direct debit,  debit card, Apple Pay or Google Pay.

Andy Bell: “investing doesn’t need to be scary”

Chief executive Andy Bell, commenting on the announcement, said: “Investing doesn’t need to be scary. Dodl by AJ Bell is for anyone looking for a low-cost, easy-to-use investment app to help them meet their investment goals such as saving for a house deposit, holidays or retirement.

“The intuitive investment journey and streamlined investment range will appeal particularly to those that are new to investing and want a simple way to manage their investments.

“With a low annual charge of 0.15%, no trading commissions and all the main tax efficient products, Dodl will be amongst the cheapest and best value investment platforms in the market.

“Our friendly monsters will guide people through the investment process with no jargon and introduce them to an investment range that is easy to choose from and caters for the investment needs of the majority of people.”

Competition hotting up in retail investing sector

AJ Bell’s move is the latest sign that competition is hotting up in the sector after a period of consolidation among the bigger players, with second-largest platform Interactive Investor in the frame to be bought by fund manager Abrdn.

Newcomer Freetrade has grown from nowhere to currently have £1 billion in client assets.

The Financial Conduct Authority estimates that there are 8.6 million individuals in the UK with cash savings of £10,000 or more. During the pandemic millions have been able to save money and a growing proportion use their free time to start trading and investing in stocks.

However, Freetrade and other new stock apps are relative minnows alongside Hargreaves Landown, which has client assets of £133 billion and Interactive Investor with £55 billion.

Kevin Doran, managing director at AJ Bell, is heading up the rollout of the Dodl app. He emphasises the amount of cash sloshing around in consumers’ bank accounts at high street banks, with many worried about putting that money to work on the stock market – Dodl is a pitch for that cash.

“The real competition here is high street banks whose customers are holding pretty large balances on an ongoing basis,” said  Doran.

Presumably the “friendly monster” mascot is aimed at making investing less scary, although there is a fine line between that approach and risking trivialising what is a serious business and worse, gamifying investing in the way that US broker Robinhood has been accused of doing.

Check out our guide to the best investment platforms UK