(Alliance News) - AJ Bell PLC said on Tuesday that it will be enacting a package of pricing changes, which it believes will benefit customers by "around GBP14 million" a year, hours after a warning from the UK Financial Conduct Authority.
The firm said it had been sizing up the pricing package "for some time".
Taking effect in April 2024, the Manchester-based provider of online investment platforms and stockbroking services will cut prices for those customers investing through its platform in the direct-to-consumer and advised markets.
The costs of buying and selling exchange traded investments through the direct-to-consumer platform are being reduced to GBP5.00 per trade from GBP9.95, while dealing charges for frequent traders will drop to GBP3.50 from GBP4.95.
AJ Bell is also raising rates of interest on cash held in pension drawdown, from between 3.5% for balances below GBP10,000 and 4.5% for those above GBP100,000. Rates of interest will also increase for large cash balances in individual savings accounts and pensions in accumulation of 2.7% and 4.0%, respectively.
AJ Bell claims that these changes, which are in line with its "philosophy of sharing economies of scale with customers as it grows", will benefit customers by around GBP14.0 million per year.
The announcement of the package followed a warning on Tuesday from the FCA that investment platforms such as AJ Bell may be retaining some of the interest earned on customers balances, which "may not reasonably reflect the cost to firms of managing the cash".
The watchdog noted that the interest owned by these companies has increased in line with rising interest rates.
It also stated its concern about the practice of "double-dipping", by which platforms charge fees to customers for the cash they hold. The FCA warned that these practices may not be providing fair value to customers and instructed firms to cease this.
AJ Bell shares were down 3.7% at 300.04 pence each in London on Tuesday afternoon.
Shares in Hargreaves Lansdown PLC and abrdn PLC were also hurt by the FCA announcement, each falling 5.7%.
By Hugh Cameron, Alliance News reporter
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