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Interactive Investor 33% price hike

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Interactive Investor have notified me of a price increase from 1 June. They are going to increase their charges from equivalent of £7.50 per month to £10 per month. I'm not happy with a 33% price hike, but am struggling to find cheaper flat rate SIPP providers. Does anyone have any suggestions?

Comments

  • Alexland
    Alexland Posts: 10,183 Forumite
    Eighth Anniversary 10,000 Posts Photogenic Name Dropper
    The cost is more like £20 per month if you consider the II SIPP fee.

    Alternative choices depend on your investments and trade activity but consider iWeb or Halifax Share Dealing (£180), Jarvis X-O (£99+vat, no funds) and Fidelity (capped at £45 if no funds).

    Alex
  • dunstonh
    dunstonh Posts: 119,687 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    A lot of platforms are loss making. A number are expected to fail. Although that has been said for a very long time.

    One of the popular methods is to price cheap and hope you get market share and volume to make yourself profitable. When it doesnt happen, the next stage is to increase the price and hope that you lose less than the increase brings in. And hopefully lose the expensive investors.

    If you go with the cheapest or at that end of the scale, then you should expect price rises sooner or later.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • I've been using iWeb for years just a fiver per trade and no charges. Who knows if they will increase charges in future but for now it's much cheaper than my II account, which really offer nothing more to me over iWeb.
  • ozaz
    ozaz Posts: 316 Forumite
    Part of the Furniture 100 Posts Name Dropper
    edited 15 April 2019 at 7:44AM
    What I find distasteful about this price rise is they have done it immediately after ending an attractive cashback promotion which I expect baited a lot of new customers.
    https://www.ii.co.uk/transfer-cashback-offer

    In addition to the old fee structure, the cashback promotion convinced me to switch from my old platform to II as it covered most of my exit fees. Had I known about the impending change in fees I don’t think I would have bothered switching to II.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    https://forums.moneysavingexpert.com/discussion/5988338/interactive-investor-to-roll-out-netflix-pricing

    There is a big discussion here. I have the choice of iWeb or stay. The issue with moving to iWeb is that they could also raise their prices next.
  • Albermarle
    Albermarle Posts: 27,875 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    and Fidelity (capped at £45 if no funds).
    To digress a little , can someone explain why Fidelity ( and others ) are happy to charge so much less for holding shares , ETF's , Investment trusts than for funds ?
    For example if you had a £100K with Fidelity in funds you pay £350 a year.
    If this was £100K in ETF's you pay £45 a year . If you were a low activity investor and paid say £50 a year for trades , then you are only paying approx. 0.1% charge a year . If you had £300K , you would be paying about 0.03% .
    How does the platform make any profit ?
  • dunstonh
    dunstonh Posts: 119,687 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    To digress a little , can someone explain why Fidelity ( and others ) are happy to charge so much less for holding shares , ETF's , Investment trusts than for funds ?

    Its a good question as it goes against the spirit of the RDR. Unbundling was meant to remove any bias between investment universe types. It wouldn't matter if you held shares, ITs, UT/OEICs etc. it would all cost the same (bar dealing costs).

    However, you do have some platforms that charge differently for different universes. It isn't actually a breach of rules. It just wasn't expected.
    How does the platform make any profit ?

    Loss leaders and relatively small volume going into those assets compared to others.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • coyrls
    coyrls Posts: 2,508 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Albermarle wrote: »
    To digress a little , can someone explain why Fidelity ( and others ) are happy to charge so much less for holding shares , ETF's , Investment trusts than for funds ?
    For example if you had a £100K with Fidelity in funds you pay £350 a year.
    If this was £100K in ETF's you pay £45 a year . If you were a low activity investor and paid say £50 a year for trades , then you are only paying approx. 0.1% charge a year . If you had £300K , you would be paying about 0.03% .
    How does the platform make any profit ?
    My guess is that funds are traded less actively than the others and so generate less revenue from trading fees. Maybe fund investors are also less likely to move platforms and competition is not so strong for them, again because they are less active traders.
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