Our Verdict
interactive investor currently charges a fixed platform fee together with one of the lowest trading fees among the mainstream platforms. There are over 40,000 investments to choose from. However, it’s not possible to trade in fractional shares, cryptocurrency or foreign exchange.
Pros
- Flat platform fee (cost-effective for larger portfolios)
- Extensive range of investments
- Extensive research offering
- Pays interest on cash balances
Cons
- Platform fees expensive for small portfolios
- High trading fee for funds
- One of higher foreign exchange fees on non-UK shares
On interactive investor's Website
Flat platform fee
Wide range of investments
Excellent research offering
Table of Contents
- interactive investor: a round up
- What plans are available?
- What products are available?
- What are the investment choices?
- What else does it offer?
- What about fees and charges?
- How does interactive investor rank on customer service?
- What types of assets are ii customers investing in?
- What is the recent performance of ii customer portfolios?
- Who should consider interactive investor?
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interactive investor: a round up
Although interactive investor charges a share trading fee, investors receive one free trade per month under the Investor Plan and two free monthly trades under the Super Investor Plan. It’s also possible to hold up to nine foreign currencies in their account to reduce foreign exchange fees.
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
Investors have a range of over 40,000 investments to choose from, including shares, funds, investment trusts and exchange-traded funds (ETFs).However, it is not possible to trade in fractional shares, cryptocurrency or foreign exchange.
interactive investor also pays tiered interest on uninvested cash balances on trading accounts, individual savings accounts (ISAs) and Self-Invested Personal Pensions (SIPPs).
interactive investor does not currently provide a community or social trading forum for investors.
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What plans are available?
interactive investor offers three main types of plan:
- Investor Essentials (£4.99 per month): includes a trading account and ISA for portfolios of up to £50,000. UK and US trades cost £3.99 (with no free monthly trade)
- Investor (£11.99 per month): also includes Junior ISAs. UK and US trades cost £3.99 but investors receive one free trade per month
- Super Investor (£19.99 per month): includes everything in the Investor plan but investors pay a lower fee (£5.99) for (non-US) international trades and receive two free trades per month.
Investors wanting to open a SIPP can subscribe to the Pension Builder plan at £12.99 a month. Alternatively, investors subscribing to the Investor and Super Investor plans can add a SIPP for an additional cost of £10 a month.
interactive investor also offers a ‘friends and family’ scheme, allowing customers to pay an extra fee of £5 a month to provide a free subscription to the Investor Essentials plan for up to five people. This option is free under the Super Investor plan.
What products are available?
- General trading account
- ISA
- SIPP
- Junior ISA
- Cash savings account
What are the investment choices?
interactive investor offers the choice of 40,000 investments, including:
- Shares from North America, Europe and Asia-Pacific
- Over 3,000 funds
- Over 1,000 ETFs
- Over 600 investment trusts
What else does it offer?
Ready made portfolios: interactive investor offers five ready-made portfolios, selected and managed by Morningstar, its research partner. Investors can choose from three growth-focused and two income-focused portfolios.
The active portfolios contain actively-managed funds which aim to outperform the market but charge a higher annual fee. The passively-managed funds are a lower cost option based on index-tracking funds. It’s also designed to offer a sustainable/ethical growth-focused portfolio.
Quick-start funds: a selection of six low-cost funds for investors comprising three Vanguard LifeStrategy Funds and three sustainable funds from Columbia Threadneedle.
Super 60 investments: a selection of 60 funds covering active and passive funds, investment trusts and ETFs. Selection is based on performance, liquidity, risk and other criteria.
Ace 40 investments: a selection of 40 sustainable funds, investment trusts and ETFs, covering a range of sectors and regions.
Education: interactive investor offers one of the most extensive educational offerings amongst the platforms, both in terms of market commentary and investing guides.
Investors have access to a number of videos and podcasts on investing topics, together with live, interactive masterclasses with investing experts. It also produces a depth-and-breadth of market analysis, covering shares and funds, as well as market and sector trends.
Apps: interactive investor’s investing app is available on both Android and iOS devices, including automated trading tools, such as limit orders and stop losses.
Security: interactive investor is regulated by the Financial Conduct Authority (FCA) in the UK. The company uses third party banks and custodians to hold customers’ funds, which provides protection for customers in the event that the company went into liquidation.
However, there is no protection in terms of the underlying investments and the risk that they may fall in value. This will depend on what regulated activity the firm was carrying out for you and whether any exceptions apply.
What about fees and charges?
interactive investor charges the following fees for its three main plans:
| Investor Essentials | Investor | Super Investor | |
|---|---|---|---|
| Monthly fee | £4.99 | £11.99 | £19.99 |
| Free monthly trades | 0 | 1 | 2 |
| Trading fee (UK shares & funds, US shares) | £3.99 | £3.99 | £3.99 |
| Other international shares | £9.99 | £9.99 | £5.99 |
| Includes | Trading account & ISA | Trading account, ISA & Junior ISA | Trading account, ISA & Junior ISA |
| Cost to add SIPP | n/a | £10 per month | £10 per month |
Other fees include £0.99 for any dividend reinvestment and a foreign exchange fee on non-sterling trades of 1.5% (for transactions up to £25,000).
Alternatively, customers can open a Pension Builder account for £12.99 which comprises a SIPP. The trading fees are the same as for the Investor account.
How does interactive investor rank on customer service?
Research firm Fairer Finance gives interactive investor an overall customer experience rating of 63%, split as follows: customer happiness (55%), customer trust (59%), complaints performance (70%) and transparency rating (68%).
What types of assets are ii customers investing in?
Overall, the most popular investments among ii customers were equities (38%), followed by funds (23%) and investment trusts (20%), as shown in the following table:
| Age | Cash | Equities | ETP | Funds | Investment trusts | Other | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 18-24 | 14% | 21% | 9% | 27% | 28% | 1% | 100% | |||||||
| 25-34 | 13% | 28% | 14% | 27% | 18% | 0% | 100% | |||||||
| 35-44 | 13% | 32% | 14% | 28% | 11% | 2% | 100% | |||||||
| 45-54 | 11% | 35% | 11% | 28% | 13% | 2% | 100% | |||||||
| 55-64 | 11% | 35% | 8% | 26% | 19% | 1% | 100% | |||||||
| 65+ | 9% | 43% | 4% | 17% | 26% | 1% | 100% | |||||||
| Total | 10% | 38% | 8% | 23% | 20% | 1% | 100% | |||||||
| Source: interactive investor, April 2023 | ||||||||||||||
However, there were some variations by age, with 18-24 year-olds preferring funds (27%) and investment trusts (28%) to equities (21%).
Equities were by far the most popular type of investment among the over-65s, accounting for 43% of portfolios, compared to funds (17%) and investment trusts (26%).
Cash accounted for around 10% of all customers’ portfolios, which may reflect a desire to ‘sit out’ of stock markets while the outlook remains uncertain.
However, younger investors were more cautious than their more senior counterparts, holding 14% of their portfolios in cash, compared to only 9% for the over-65s.
What is the recent performance of ii customer portfolios?
On average, ii customers made a total return of 9% over the last three years, and a six-month return of 7%, as shown below:
| Age | 3-year total return | 6-month return | ||
|---|---|---|---|---|
| 18-24 | 9.20% | 5.10% | ||
| 25-34 | 9.70% | 5.40% | ||
| 35-44 | 9.80% | 5.40% | ||
| 45-54 | 8.70% | 6.20% | ||
| 55-64 | 7.30% | 6.90% | ||
| 65+ | 7.50% | 8.20% | ||
| Female | 8.40% | 7.10% | ||
| Male | 7.50% | 7.10% | ||
| Average | 7.90% | 7.10% | ||
| Source: interactive investor, April 2023 | ||||
The 35-44 year-olds topped the table for three-year returns with a return of 9.8%, followed closely behind by the 25-34 year olds. The 55-64 year-olds brought up the rear, with a return of 7.3%, with the over 65s not far behind.
However, the over 65s have had the last laugh in the last six months, delivering by far the highest return of over 8%, compared to 5% for the 18-24s.
Looking by gender, women have outperformed the men by one percentage point, achieving a three-year return of 8.4% compared to 7.5% for male customers.
Who should consider interactive investor?
interactive investor’s fixed platform fee may attract investors with higher-value portfolios – as most other mainstream platform providers charge on a percentage basis.
And – with more than 40,000 investments to choose from – it’s also likely to suit those with a wide investment scope. Investors are likely to find the most suitable plan for their needs from low-cost Essentials plan to the premium Super Investor plan. It also has an extensive research and educational offering.
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Frequently asked questions (FAQs)
How do I open an interactive investor account?
According to ii, it should take around 10 minutes to open an account online. Customers will need to provide their address, debit card details (to verify their identity) and national insurance number.
How do I transfer investments into an interactive investor account?
Customers can transfer shares, funds, investment trusts and ETFs held in general trading accounts, ISAs and SIPPs into an appropriate ii account.
In the first instance, customers should check whether their existing provider charges an exit fee for transferring investments. For pensions, it’s also important to check whether any important benefits or guarantees may be lost.
ii will manage the transfer process and liaise with the old provider. Many investments can be transferred ‘in specie’ whereby the investment moves across to the new provider, without having to be sold. This depends on whether the new platform offers the same investments.
How do I withdraw money from my interactive investor account?
In order to withdraw money, customers need to add a nominated bank account and the transfer should be processed within 1-2 working days.
Is interactive investor safe?
interactive investor is regulated by the FCA, meaning that its systems and practices meet industry requirements.
Customers’ money is placed in separate third party bank accounts under trust and customers are protected under the Financial Services Compensation Scheme (FSCS) up to £85,000 per investor per account.
However, there is no protection in terms of the underlying investments and the risk that they may fall in value.
What happens if interactive investor goes bust?
Investments have ‘trust status’ which means that client investments, including cash, are ring-fenced from the firm’s creditors if interactive investor becomes insolvent.
