YouInvest or Interactive Investor

jimmyjones_2 · 18 July 2017 at 8:17PM

My SIPP is about to move to the point where a fixed fee broker makes sense after a company pension is transferred in.

The value will be around £140k and I will not be contributing to it. It is currently with BestInvest and all invested in Vanguard Lifestrategy 80.

Finding the best platform is rather confusing but I have narrowed it down to Interactive Investor and YouInvest thanks to Monevator and Snowman’s spreadsheet.

With YouInvest I would have to invest in ETFs to make the fees reasonable, recreating VLS80 would be relatively easy with 3 or 4 ETFs.

With Interactive Investor the SIPP fees would allow me to hold my £40k ISA without additional fees so would be overall slightly cheaper. The ISA is currently with Vanguard and I invest monthly. I could also continue to invest in funds.

Interactive Investor’s other fees put me off, the SIPP exit fee is steep and there is a fee to transfer in.

Also I have generally heard good reviews of YouInvest and mixed reviews of Interactive Investor.

I used to be an II customer and about 3 months after I opened my first S+S ISA they introduced the current pricing structure as a result of RDR. In the end II gave negatively affected customers like me the option to transfer out for free but there was a huge thread on MSE about the fees with lots of unhappy customers.

What would you do in my situation? Move to YouInvest or Interactive Investor or somewhere else?

BLB53 · 18 July 2017 at 8:33PM

I had a v negative experience with ii around 5 yrs back when they moved to their own platform and could never therefore recommend them.

On the positive side, I have held my SIPP with AJ Bell since 2007 and have no problems whatsoever so between the two you have narrowed down I would certainly go with AJ Bell 100%.

premierfella · 18 July 2017 at 9:22PM

It is probably worth mentioning that YouInvest point blank refused to give free transfers out on the two occasions that I recall them changing their charges.

I transferred almost everything out of YouInvest as a result of that (and what I still have with them will go when I get around to it.

EdSwippet · 18 July 2017 at 9:26PM

I would go to Interactive Investor. Rationale below.

Holding four ETFs to replicate Vanguard Lifestrategy fund may well be more hassle than you think. You could hold a fund's 'accumulation' units, so that you never have to bother with reinvesting dividends. ETFs, on the other hand, nearly all distribute dividends, so you may well face higher trading charges just to stay on top of that. In addition, you also have to worry about rebalancing across asset classes, so possibly more trading charges there too. These can quickly add up. To add further insult, some ETFs pay dividends in USD or EUR, in which case you also lose somewhat in forex charges.

In short, I'm not a fan of changing around my carefully selected, simple, and low-cost investment strategy merely to pander to the whim of some platform's marketing halfwit.

Worth noting that the FCA has just begun an investigation into platform pricing that will encompass 'cross-charging' and so may well tackle the huge disparity between fund and share/ETF charges.

Platform charges can change, and not necessarily to your advantage. Each time Interactive Investor has fiddled with charges they have also provided a limited time free transfer out (albeit after some negative customer feedback on the first occasion). In contrast, AJ Bell raised prices by some very large multiples for some customers twice in the past three years, and on both occasions did not offer free transfers out. My own Interactive Investor account is actually a Youinvest 'refugee' from the first of these.

The normal transfer out charges look pretty similar on both of these to me, but maybe I'm missing a subtlety somewhere. There is indeed a £50 transfer in fee at Interactive Investor, but you should recoup that quickly as you will trade less often if you use fund accumulation units. One-off fees such as this are much less bothersome than recurring annual ones, for obvious reasons. Also, Interactive Investor has a number of trades included in its annual fee.

Interactive Investor have just purchased TD Direct Investing. The combined group becomes the number two platform in the UK, second to Hargreaves Lansdown. Some economies of scale might ensue (or, of course, might not). For the future though, not yet.

jimjames · 18 July 2017 at 9:38PM

With a £140k static portfolio, is there any reason you've not got iWeb on your shortlist? Seems ideal for those circumstances

System · 18 July 2017 at 9:52PM

Jimmy Jones - there is a character by your name in a cbeebies program called Kazoops, he is the protagonists best friend, which in every day life might be a cause for concern...
cbeebiesradio_kazoopsradio_coconutsafariclub_index_1024_576.jpg

cbeebiesradio_kazoopsradio_coconutsafariclub_index_1024_576.jpg

jimmyjones_2 · 18 July 2017 at 9:55PM

EdSwippet wrote: »

I would go to Interactive Investor. Rationale below.

Holding four ETFs to replicate Vanguard Lifestrategy fund may well be more hassle than you think. You could hold a fund's 'accumulation' units, so that you never have to bother with reinvesting dividends. ETFs, on the other hand, nearly all distribute dividends, so you may well face higher trading charges just to stay on top of that. In addition, you also have to worry about rebalancing across asset classes, so possibly more trading charges there too. These can quickly add up. To add further insult, some ETFs pay dividends in USD or EUR, in which case you also lose somewhat in forex charges.

In short, I'm not a fan of changing around my carefully selected, simple, and low-cost investment strategy merely to pander to the whim of some platform's marketing halfwit.

Worth noting that the FCA has just begun an investigation into platform pricing that will encompass 'cross-charging' and so may well tackle the huge disparity between fund and share/ETF charges.

Platform charges can change, and not necessarily to your advantage. Each time Interactive Investor has fiddled with charges they have also provided a limited time free transfer out (albeit after some negative customer feedback on the first occasion). In contrast, AJ Bell raised prices by some very large multiples for some customers twice in the past three years, and on both occasions did not offer free transfers out. My own Interactive Investor account is actually a Youinvest 'refugee' from the first of these.

The normal transfer out charges look pretty similar on both of these to me, but maybe I'm missing a subtlety somewhere. There is indeed a £50 transfer in fee at Interactive Investor, but you should recoup that quickly as you will trade less often if you use fund accumulation units. One-off fees such as this are much less bothersome than recurring annual ones, for obvious reasons. Also, Interactive Investor has a number of trades included in its annual fee.

Interactive Investor have just purchased TD Direct Investing. The combined group becomes the number two platform in the UK, second to Hargreaves Lansdown. Some economies of scale might ensue (or, of course, might not). For the future though, not yet.

Thanks for your reply, really useful. You are right that the II exit fees are comparable with Youinvest.

jimmyjones_2 · 18 July 2017 at 9:59PM

jimjames wrote: »

With a £140k static portfolio, is there any reason you've not got iWeb on your shortlist? Seems ideal for those circumstances

Thanks jimjames, iWeb is now on my shortlist.

I am also looking at holding ETF's with Fidelity for £45 a year. For some reason I thought you could only hold funds with Fidelity.

jimmyjones_2 · 18 July 2017 at 10:08PM

MatthewAinsworth wrote: »

Jimmy Jones - there is a character by your name in a cbeebies program called Kazoops, he is the protagonists best friend, which in every day life might be a cause for concern...

Jimmy Jones is also the assumed name of the hitman Jimmy "The Tulip" Tudeski (Bruce Willis) in The Whole Nine Yards.

System · 19 July 2017 at 8:15AM

He wrote a diary I believe that was made into a chick flick, chronicling his time on dragons den

badger09 · 19 July 2017 at 10:22AM

Another vote for IWEB:)

OP, have you seen SnowMan's excellent spreadsheet (link in 1st post)

http://forums.moneysavingexpert.com/showthread.php?t=5583030

YouInvest or Interactive Investor

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