As inflation continues to rise, it’s good to see that prices aren’t exploding everywhere. The launch last week of Dodl, a low-cost app-based service from stockbroker AJ Bell, marks the latest round of a price war between investment platform providers – welcome news for investors. savers and investors.
AJ Bell expects some customers to use Dodl as a general investment account, but, as with competing platforms, it also offers individual savings accounts (Isas) and self-invested personal pensions (Sipps). This could therefore be a good way to get started in long-term saving and investing, including for retirement planning.
Compete with the Vanguard
Dodl has an annual fee of 0.15%, with a monthly minimum of £1, and no additional fees for buying or selling investments on the platform. It’s great value for money, but it won’t replace existing platforms for most investors (including users of AJ Bell’s Youinvest service), as it offers a very limited choice of investments. Dodl will offer access to seven AJ Bell multi-asset funds, 23 index funds covering global equity markets and a range of investment themes, and 50 UK stocks.
This puts Dodl in the territory of Vanguard, the American investment giant that launched a low-cost platform in the UK a few years ago. It also offers a one-off annual fee of 0.15% for access to a limited selection of investments: in the case of Vanguard, only its own funds are available.
The only other platform that comes close to Dodl’s pricing on an Isa is Freetrade, which charges £3 per month. It also offers commission-free trading in a much wider range of investments. But while that price equates to an annual charge of just 0.18% on a £20,000 Isa, Freetrade’s Sipp has a higher monthly cost of £9.99. This makes it more expensive than Dodl or Vanguard for those who have built up smaller pensions.
So for investors looking to open their first Sipp – perhaps because they don’t have access to a workplace pension, or because they want to boost their retirement savings – Dodl seems like a good fit. option. It corresponds to the cost of the cheapest Sipp (Vanguard) on the market, but offers a wider choice of investments, although still limited.
Hoping for more choices
Dodl focuses on passive funds, which track a stock market index rather than trying to beat it, so it won’t suit anyone looking for active funds. Nonetheless, the platform offers investors exposure to all major developed stock markets, as well as several emerging market funds. There are also bond funds and some sector and thematic products, although some of these seem arbitrary – there is a robotics exchange-traded fund, but no trackers for key sectors such as energy or consumer goods. basic consumption, and no gold. About half of the 50 stocks available are strong blue chips, but many popular FTSE 100 companies that would help build a balanced portfolio are left out, even though the list includes many volatile mid-caps.
The list will evolve – US stocks are on the radar – so hopefully it will improve. Either way, more competition is welcome and it’s a promising product. In terms of pensions, Dodl follows the launch of Pension Builder by Interactive Investor earlier this year. With a fixed monthly cost of £12.99 it was also marketed as a low-cost option, but if you don’t have a six-figure pension fund Dodl will be cheaper.
• SEE ALSO: A new low-cost Sipp from Interactive Investor