Interactive Investor to roll out ‘Netflix pricing’

EdSwippet

Lokolo wrote: »

Free trades are only valid for 90 days. Currently trades do not expire.

Okay. Annoying compared to the current way trades can accumulate, and definitely less flexible and user-friendly.

Lokolo wrote: »

I rebalance my whole portfolio once a year. So in one month I will sell x7, then purchase x7. I'm not even sure how I would rebalance every two months to take advantage of the free trades.

I can see how spreading rebalancing across the year might be a bit fiddly, but it shouldn't be impossible.

For me, it's a non-issue. I rebalance in tolerance bands that are 20% wide, and rebalance to half that, so 10%. On an average year I don't have any rebalancing trades at all, because most things drift in the same general direction. Your rebalancing regime must be a lot stricter than mine.

londoninvestor

Lokolo wrote: »

just to make it clear. I rebalance my whole portfolio once a year. So in one month I will sell x7, then purchase x7. I'm not even sure how I would rebalance every two months to take advantage of the free trades.

If you can time it so your purchases are done as 99p regular investments, that saves you £49.

My situation isn't a million miles from yours - though I do a quarterly trade to at least bring my overall % equity holding back to target, so I get more benefit from the trading credit.

I suspect iWeb would come out a little cheaper for me now, but it's £60 to transfer a SIPP in, and for me it's probably not worth the trouble of asking them to add funds to their trading list and doing an in-specie transfer.

To ii's credit, on the new (post-1 June) price list, transferring a SIPP out to another UK provider will now be free.

Lokolo

londoninvestor wrote: »

To ii's credit, on the new (post-1 June) price list, transferring a SIPP out to another UK provider will now be free.

It already is.

Current charges: https://media-prod.ii.co.uk/s3fs-public/pdfs/rates_and_charges_uk.pdf

londoninvestor

Lokolo wrote: »

It already is.

Current charges: https://media-prod.ii.co.uk/s3fs-public/pdfs/rates_and_charges_uk.pdf

Sorry, you're right. I found something on google that had a £75 charge, but that must have been an old one.

Lokolo

londoninvestor wrote: »

Sorry, you're right. I found something on google that had a £75 charge, but that must have been an old one.

Yes I am pretty sure they used to. And they have a fee if you transfer out in <1 year. I can't remember where I saw that though.

I am tempted to stay, and even start using my ISA with them, just to make it more worthwhile. The 99p regular investing is good (CSD don't do this which is a shame), can dab into direct equities. And then use free credits to top up funds once a month.

Looking at my portfolio, it has increased mainly all in line. My US is up 10% and UK Small Cap is down 11%, the rest are all similar performance since September. At the moment no need to rebalance.

The whole .99 rubbish does irate me though. Just make it a round number.

bowlhead99

EdSwippet wrote: »

The nearest rival I can find is iWeb, and here it would be nothing for the platform, but £45/quarter (payable to AJ Bell, unfortunately) for the SIPP and another £180/year for drawdown (also to AJ Bell, sigh). £360/year but with no trades thrown in. Pricey transfer out charges too (again, mostly down to AJ Bell). iWeb might have been good without AJ Bell in the mix. SIPPs carry a large overhead compared with ISAs and plain trading accounts.

The theme here seems to be you have a bee in your bonnet about AJ Bell and an implication that IWeb would have been nice and cheap if only it wasn't for that pesky layer of AJ Bell fees.

But without AJ Bell providing pensions administration and SIPP trustee services, IWeb wouldn't have the ability to offer you a pension, so the fact that they offer a cheap trading front end doesn't really help. You are right that SIPPs have a big overhead - either the provider can build their own bespoke in house solution (which some do, but not cheaply) or outsource to a third party who white-labels a solution to sit behind the provider's front end, and then that provider will want to take a layer of costs and profit margin

Lokolo wrote: »

[edit] just to make it clear. I rebalance my whole portfolio once a year. So in one month I will sell x7, then purchase x7. I'm not even sure how I would rebalance every two months to take advantage of the free trades.

Every couple of months look at your portfolio and see how it compares against your target allocation. Some things will be above their target and some below. You can sell part of 'the worst culprit' on the high side to add to the one that's most out of whack on the low side. In a couple of months time take another look and maybe it will be two different holdings that need fixing that time. Or maybe it will be one or both of the same. If there's nothing too far off, you might be happy to let the free trades lapse.

Rolling maintenance means you never actually have wonderful one day a year when everything looks perfect for five minutes before being wrong for the other 364 days, but it's perhaps not the end of the world given that (a) your preferred allocations and (b) the perfect frequency to rebalance, is an imperfect science anyhow. If you are trying to economise on number of trades, a 'little and often' check might be fine. If maintaining a specific allocation is really important to you, then it's just a trade off between what it costs on a fixed fee model vs a fixed fee model with bundled trades vs a variable model with %-of-assets charging.

redux

EdSwippet wrote: »

Thanks, but ... percentage based fees? From Fidelity:

For anything above £103k this exceeds II's and iWeb's £360/year. My SIPP is a fair way above £100k. Also, I have a general distaste for percentage-based fees, and so prefer to use companies that do not levy them.

Apologies, I started by saying depending on your investments, but I didn't expand or explain.

On funds Fidelity indeed has a percentage charge. On exchange traded instruments including investment trusts there is a £45 a year cap.

Sorry if you're in funds, and I just wasted a few minutes of your time.

EdSwippet

bowlhead99 wrote: »

The theme here seems to be you have a bee in your bonnet about AJ Bell and an implication that IWeb would have been nice and cheap if only it wasn't for that pesky layer of AJ Bell fees.

I do. My Interactive Investor SIPP is a refugee from the first of YouInvest's fee hikes, a few years back during the RDR, and that would have raised my annual fees by around 6x, but where YouInvest insisted on charging handsome transfer out fees. Their arrogant and dismissive approach at the time made me swear off future interactions with them(*).

bowlhead99 wrote: »

But without AJ Bell providing pensions administration and SIPP trustee services, IWeb wouldn't have the ability to offer you a pension, so the fact that they offer a cheap trading front end doesn't really help. You are right that SIPPs have a big overhead - either the provider can build their own bespoke in house solution (which some do, but not cheaply) or outsource to a third party who white-labels a solution to sit behind the provider's front end, and then that provider will want to take a layer of costs and profit margin.

Oh sure. But clearly there are more cost-effective pensions administrators that iWeb could have chosen. Probably Interactive Investor's, for example, if no other. Interactive Investor's platform charges are higher than iWeb's, but the two companies' SIPPs come in at the same price.


(*) Of course, should YouInvest suddenly become the cheapest option for my particular SIPP for some reason, I'll transfer to them in a flash. :-)

EdSwippet

redux wrote: »

Apologies, I started by saying depending on your investments, but I didn't expand or explain.

No worries. I didn't explain that I was all-funds earlier, but should have. Sorry.

My SIPP is probably an odd case. Nearly all bonds/gilts due to problems with the LTA. Gilt tracker funds come in around 0.15%, but gilt tracker ETFs, in particular index linked gilt tracker ETFs, are thin on the ground and seem to come in around 0.25% at best. That added 0.1% for me is enough to outweigh the saving of moving from II to a £45/year platform charge.

With some shuffling around in my ISAs and my non-II SIPP I might be able to make a move to a platform that is extortionate for funds but cost-effective for ETFs work, but it's a faff for honestly a pretty minimal gain. I guess not every lemon has to be squeezed ...

Alexland

New pricing looks unattractive especially as they continue to collect account fees from outside the tax advantaged SIPP wrapper. Just makes me happier that I chose Halifax SD for my funds SIPP.