Investing platform AJ Bell will launch an app this week, aiming to lure people into the stock market with hidden five-figure sums of cash for the first time.
Called Dodl, as in doddle and featuring Dodl the friendly monster, the app will be cheaper to use than investing through the company’s traditional platform.
But the choice of funds and stocks investors can buy and sell via their phone will be limited to just 80. To put that into perspective, investors using AJ Bell’s online platform have over 8,000 funds and stocks to choose from.
Keep an eye out: the app will feature Dodl, the friendly monster
Pre-launch research indicated that nearly two in five adults give up investing because they don’t know where to start.
Almost half say they would be encouraged to invest if the options on offer were more limited – and therefore easier to choose from – than those currently available through an online platform.
Andy Bell, chief executive of AJ Bell, said the new app will give people a “simple investment journey”. He thinks it will “especially appeal to new investors who want a simple way to manage their investments.”
He adds: “It doesn’t have to be scary, hence the use of a friendly monster in our branding. When developing Dodl, we focused on removing jargon, making account opening quick and easy, and narrowing the range of investments clients can choose from.
You can open an account via the mobile phone app in just a few minutes – the key details required being a national insurance number (although my first attempt was not without problems – see below).
Money can be paid into the account via Apple or Google Pay and debit card. Investors can choose to invest in an Isa, a retirement account or a general investment account.
There are no set-up fees or trading fees, just an annual account fee of 0.15% of the total invested – subject to a minimum of £1 per month.
AJ Bell says someone who invests their £20,000 annual Isa allowance into four stocks through the app will pay a fee of £30 a year.
This compares to £89.80 if the same investment were made through its Youinvest online platform – £50 annual fee and £39.80 commission fee.
As the table shows, the other app-only investment platforms of Moneybox and Freetrade are more expensive.
AJ Bell is hoping to attract some of the 8.6 million adults who the Financial Conduct Authority says have more than £10,000 in assets to invest in cash and are earning paltry interest rates.
Andy Bell wants to appeal to long-term investors rather than day traders who have sprung up during the pandemic when many were looking to make quick profits by buying and selling stocks.
Its range of 80 funds and stocks is eclectic. There are a series of low-cost, AJ Bell-labelled, multi-asset funds that investors can choose from, depending on the level of investment risk they wish to take. The higher the risk, the higher the potential rewards and potential losses.
It is possible to buy funds that track the performance of specific stock markets such as the UK, US and Japan. There are also options for investing in a socially responsible way.
Stocks available include strong consumer brands such as Aston Martin, Domino’s, Greggs, Ocado and Tesco. Hargreaves Lansdown has had an app for over ten years. But it accesses the full service offered on its online platform and users pay the same fees.
This means someone using their app to invest £20,000 in four UK stocks through an Isa would pay £137.80 a year including trading fees.
Hargreaves has almost 700,000 ‘active’ app users, of which almost a third use it every day and are able to see how their investments are doing, how the markets are doing or to trade.
Of all customers who logged into their account between January and the end of March, 70% did so through the app.
Alex Lambert of Hargreaves says: “The app allows investors to manage their money on the go. For some time, more and more people are logging into their account through the app rather than through their desktop computer. Naturally, this lends itself to young people who use technology more.
Interactive Investor says a quarter of all investor transactions are now done through its app. Vanguard says it “considers an app as a potential future enhancement.”
I try it – and it’s not exactly child’s play
Being told something is the best thing since sliced bread is one thing. Testing it yourself may prove otherwise.
Last week I signed up for Dodl as a “tester” – ahead of it being released to the world this week. Downloading the app went smoothly and the process of opening an account was easy.
All I had to do was confirm that I was 18 or older (correct!), give my home address, declare that I am not a US citizen, provide my national insurance number and enter my bank details. My application has been accepted. Easy-peasy, although it didn’t recognize my bank to begin with. Payment of £300 into my new investment account from my debit card went smoothly.
It was when I went to invest £250 of my money in the app that the problems started. I opted for a thematic fund called iShares Automation and Robotics.
Its objective is to track the performance of an index composed of companies generating income through the development of automatic and robotic technologies. Companies such as US phone giant Apple, US-based technology company Nvidia and US software company Splunk.
Yet when I looked at the fund details, I was greeted by a blank purple phone screen (purple is Dodl’s color). It temporarily turned my face purple while I was stuck in cyberspace.
I sent an SOS through his chat service. No immediate response. So I contacted AJ Bell to inform me that there was an issue with an independent investment research provider that was impacting its investment platform and that of its competitors.
Fortunately, the “problem” was quickly resolved and I was able to complete my fund purchase. Twenty-nine shares at just under £8.42 per share.
That little issue aside, the app is easy to use with good signage.
Over time, I imagine I’ll use it regularly, but not as frequently as I use a train app to buy my train tickets to visit Mother.
A gaffe ? Not enough.
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