The company, which took over Alliance Trust Savings (ATS) last month, said it would also be offering a temporary cashback scheme to ease the cost of moving to II from other providers.
Investors will receive £100 for investments of £25,000 to £100,000, £250 for £100,001 to £250,000, £500 for £250,001 to £1,000,000 and £2,000 for £1,000,001 and above. The offer will apply until 31 December.
Barriers to entry
Mark Polson, founder of the Lang Cat said there is now a realisation among the direct platform providers that exit fees are increasingly unacceptable.
“In fact they were always unacceptable, but there was safety in numbers,” he added. “That’s falling away now, and we expect to see more following suit.”
Polson noted that the FCA’s platform study published in July identified “barriers to transfer” as key, with exit fees clearly a part of this.
“Various other platforms still have them – most notably Hargreaves Lansdown who charge enthusiastically on the way out,” he said. “We are hopeful that we’ll see some movement there. Most other larger providers – for example Fidelity Personal Investing – don’t charge.
“ATS does have a fee but is far from the worst offender as it caps its fees.”
A long, strategic game
Bella Caridade-Ferreira (pictured), CEO at Fundscape, said the FCA’s study has “shone a light” on exit charges and platforms are making changes as a result of the regulator’s scrutiny.
She said II is playing “a long, strategic game”.
“It has a naked ambition to grow and become a leading D2C platform on a par with the likes of Hargreaves Lansdown and Fidelity.
“It has recently acquired the ATS business and this is a clear signal that investors won’t be tied in and are free to go if and when they want. At the same time, they’re offering to absorb investors’ exit costs in an effort to attract new customers and also send a message to ATS clients that it’s a thriving, growing, sustainable business model.”
Talk is cheap
Richard Wilson, CEO of interactive investor, said II has fought for simple, clear prices so the consumer is free to make the choice that is right for them.
“We have made our position clear with the Financial Conduct Authority, during its recent platform review, that while competition should be free it should also be fair, and the only effective solution to remedy today’s shoddy practices is to ban exit fees altogether,” he added.
“Talk is cheap, so we hope today’s announcement signals our commitment to stand behind our position. In fact, since 2017 we quietly waived all exit fees, but we feel now is time to remove them permanently.”