Salford-based investment platform AJ Bell said on Monday it is removing VAT from its Managed Portfolio Service (MPS) “cementing its position as one of the cheapest offerings in the market.”

AJ Bell also said it is preparing to launch a Responsible MPS over the coming months.

The VAT change will be applied from October 1, 2020.

“VAT is being removed from AJ Bell’s annual management charge of 0.15%, reducing it from 0.18% to 0.15%,” said AJ Bell.

“This will bring the total cost of all AJ Bell’s passive MPS options below 0.50%, inclusive of the MPS ongoing charges figure (OCF) and core platform fee of up to 0.20%.”

The AJ Bell Investcentre core annual platform charge for SIPP, ISA and General Investment Account remain 0.20%, reducing on assets over £1 million.

The annual charge for the AJ Bell Retirement Investment Account remains 0.25% on assets below £500,000 and 0.20% on assets above £500,000.

AJ Bell said it is also preparing to launch a Responsible MPS “which will give advisers a low-cost managed portfolio for clients who want diversified exposure to companies with strong environmental, social and governance (ESG) credentials.”

AJ Bell chief investment officer Kevin Doran said: “These changes take all our Passive Growth MPS options below the 0.30% mark which means with our platform charge of 0.20% for our SIPP, ISA or General Investment Account, advisers now have access to a suite of risk-managed portfolios, on platform, at less than 0.50% per annum.

“That’s exceptional value in a highly competitive market, consistent with our commitment on costs.

“We are always looking at how we can evolve the MPS in line with the needs of advisers and are working towards launching a responsible investment option within the MPS over the coming months.”