Investment platform AJ Bell to launch cash savings hub
The investment firm today announced it is preparing to move into the £1.5trn retail cash savings market with the launch of the AJ Bell Cash savings hub via its D2C (direct to consumer) platform.
Customers will be able to apply for multiple accounts without the paperwork, and will be able to manage their cash savings via one online account that sits alongside their existing AJ Bell Youinvest accounts.
It said the free-to-use hub will allow customers to access a range of competitive notice and fixed-term savings accounts offered from UK authorised banks. It expects to include products such as 90-day notice accounts to five-year fixes. It won’t offer advice so the hub will be execution-only.
When asked whether the rates offered via the hub will be different to those offered direct by a provider, AJ Bell said it will vary between accounts, with some the same and some slightly different.
Interest earned will be paid back into the hub where customers can then withdraw the cash to an external account or re-invest the amount into a different savings account.
AJ Bell added that the savings accounts within the hub will be covered by the Financial Services Compensation Scheme (FSCS), protecting deposits up to £85,000 per bank.
Initially, the cash savings hub will be tested with a small group of existing customers before the end of the month and it expects to launch it to existing customers by the end of the year.
The hub is expected to take on rival Hargreaves Lansdown which launched its free ‘Active Savings’ offering in 2018, giving customers a ‘one-stop-shop’ solution to take the hassle out of chasing the best rates.
Rate monitoring site Savings Champion also runs a paid for Cash Advice Service, while savers can also use Raisin UK and Octopus Cash to open and manage a range of cash accounts.
Andy Bell, chief executive officer at AJ Bell, said: “With interest rates so low, it is increasingly important that people regularly check the rates they are earning on their cash savings and consider switching accounts if they want to ensure they get a better return, but most people don’t have the time or inclination to do that.
“Our new AJ Bell Cash savings hub will enable customers to manage their cash savings more effectively without having to go through lengthy, paper-based application processes each time they open a new account, whilst ensuring they benefit from FSCS protection.”
AJ Bell also today published its Q3 trading update, revealing it took on 20,000 new customers, taking total platform customers to 268,444. This figure is up 27% year-on-year and 8% in the quarter.
Total net inflows stood at £1.2bn and assets under administration reached £54.3bn, up from £50.7bn reported in the previous year.
Its consensus for profit before tax was £43.4m as at 20 July 2020.