Investment platform Interactive Investor has announced cuts to its trading fees by a third.
The platform will introduce the £3.99 fee for trades on funds, ETFs, investment trusts and UK and US trades on 1 September.
Interactive Investor’s lowest cost plan, the £4.99 a month Investor Essentials, has been extended to include customers with assets up to £50,000.
Meanwhile, international trades (exc. US) have been cut 50% to £9.99 across the platform’s lower cost plans.
The price of the platform’s core ‘Investor’ plan has risen to £11.99 a month, up from £9.99.
See also: Fundsmith Equity retains fund top spot for Interactive Investor users
‘Disruptive’ repricing
According to pricing comparisons from The Lang Cat, the Investor Essentials plan will cost users with £50,000 invested £91.80 a year, based on a portfolio made up of 50% funds and 50% direct equities four fund trades and four equity trades.
In comparison, the same portfolio would cost £205.40 a year on Hargreaves Lansdown or £205 on Fidelity’s platform.
Steve Nelson, insight director, The Lang Cat, said: “Clearly, investors need to take their own circumstances into account, however, with this reprice, Interactive Investor looks like it is going to be much more attractive to a lot more investors. This is a significant move by Interactive Investor that suddenly makes them more attractive on price to a much wider audience.”
Competition between platforms on pricing has heated up in recent times. Back in April, Hargreaves Lansdown announced its own wave of fee cuts.
Jeremy Fawcett, head of Platforum, added: “This is essentially about behavioural economics. Flat fees clearly benefit people with larger pots but that may be a future consideration for people starting their investment journey. Customers are sticky, so you need to get them to make a decision early on. This reprice builds a competitive offering early on in the investment journey.
“It has been a price inelastic market, but the likes of Interactive Investor and Vanguard are opening up awareness of choice around cost, and it’s disruptive.”
–
PA Event: Fixed Income: September 14th | RSVP HERE
Hosted at Pan Pacific Hotel
Join us for an in-depth exploration of the fixed-income market, where industry experts will delve into the current landscape, emerging opportunities, and strategies for optimizing fixed-income portfolios.
Sponsors include Alliance Bernstein, J Safra Sarasin, Premier Miton, RBC Bluebay, Vontobel and 1 more to be announced.
