Pension
Income
Investor

Interactive investor: what the new fees mean

Interactive Investor*, the investment platform recommended in our book, Your Retirement Salary, as a good all-round choice for many, has announced a change in its charging structure.

We expect the effect on investors who follow the approach outlined in our book to be an increase in platform fees of about £100 a year.

Interactive Investor, which is in the process of taking over Alliance Trust Savings, will switch to charging monthly instead of quarterly. It will also introduce three price plans: a basic “Investor” service for £9.99 a month, “Funds Fan” at £13.99 a month and “Super Investor” for £19.99 a month.

The current change is £22.50 a quarter (£7.50 a month), although the situation is complicated by charges for other services such as trading in shares and funds. The changes will take effect on June 1.

We asked Lang Cat, the specialist consultancy that analysed platform pricing for us in our book, to calculate how much readers were likely to pay under Interactive’s new pricing arrangements.

Steven Nelson, the firm’s consulting director, said they would minimise the extra cost by choosing the “Super Investor” option, which would cost them £544 a year, compared with £440 a year currently. The new figure is for those who use the “high income” or “compromise” portfolios described in the book and make regular sales from their investments to top up the natural income. Those who use the “inheritance” portfolio, which involves taking natural income only, may pay slightly less.

Although any increase in costs is unwelcome, we believe that Interactive Investor remains good value for any investor with a medium-sized or large portfolio, say of £100,000 or more. We don’t think it is worth readers switching to another platform in search of lower fees as the savings are likely to be modest, switching involves inconvenience and possible delays and Interactive remains a good-quality platform in our opinion.