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Interactive Investor bid to purchase EQi

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https://news.sky.com/story/interactive-investor-bolsters-scale-with-swoop-for-eqi-12190674
Yet another acquisition for II on the horizon. Potentially not the best news for those who hold Lifetime ISAs at EQi, which is currently the cheapest option for a S&S LISA holding a few years max contributions.

Comments

  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 18 January 2021 at 9:31AM
    II were outspoken they wouldn't be offering LISA accounts and then then, with The Share Centre, they go and buy 2 platforms which offered LISAs. Admittedly it's probably only a small proportion of the assets but II will probably now take all customers on a journey to being charged £9.99 per month so I will stop suggesting EQi and stick to AJ Bell as the most stable (after the recent capping increase) good value S&S LISA provider. As II don't offer LISAs to new customers that will probably be the end of the only S&S transfer option for over 40s too. At least people won't need to ever understand EQi's strange pricing combinations that seemed to depend on the account opening sequence.
    Along with the purchase of Alliance Trust Savings, II are sucking choice out of the market - what next? Halifax SD are around the right size and their platform might now be beyond any reasonable business case to onward develop? Could be the end of iWeb...
  • Albermarle
    Albermarle Posts: 27,801 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    II are sucking choice out of the market - what next? 

    At the same time platform costs are dropping - both ii and AJ Bell have recently removed various charges .

    Presumably the only way to stay profitable is to keep getting bigger by hoovering up the smaller players ?

  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 18 January 2021 at 10:41AM

    At the same time platform costs are dropping - both ii and AJ Bell have recently removed various charges .

    I must have missed that - last thing I remember was II increasing their base charge from £90 to £120 pa and AJ Bell increasing their capping by at least 20% depending on the product. Increasing ongoing charges has a greater impact for long term customers than dropping the 'hard to justify' exit fees. OK to be fair to II they did remove their SIPP drawdown charge so there will be winners and losers but overall it's hard to see a clear reduction for the average customer.

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 18 January 2021 at 10:41AM
    II are sucking choice out of the market - what next? 

    At the same time platform costs are dropping - both ii and AJ Bell have recently removed various charges .

    Presumably the only way to stay profitable is to keep getting bigger by hoovering up the smaller players ?

    Or for smaller players it's becoming increasingly difficult to remain profitable. Given the nature of the business models. 
  • Albermarle
    Albermarle Posts: 27,801 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    Alexland said:

    At the same time platform costs are dropping - both ii and AJ Bell have recently removed various charges .

    I must have missed that - last thing I remember was II increasing their base charge from £90 to £120 pa and AJ Bell increasing their capping by at least 20% depending on the product. Increasing ongoing charges has a greater impact for long term customers than dropping the 'hard to justify' exit fees. OK to be fair to II they did remove their SIPP drawdown charge so there will be winners and losers but overall it's hard to see a clear reduction for the average customer.

    You are probably right that the average cost to the average customer hasn't changed much in the end .
  • EthicsGradient
    EthicsGradient Posts: 1,247 Forumite
    Sixth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 18 January 2021 at 2:00PM
    Also of interest in that story - they keep up the talk of an IPO for II. I had been thinking about moving my II accounts ('trading' and ISA) to a couple of other providers, which would save a few quid each year, and have the reassurance of not relying on just one platform (though I do have a SIPP elsewhere). But the persistent rumours of an IPO, which may well include an offer of shares at a good price to customers, have kept me there - it would be annoying to have been a customer for about 10 years, leave, and then find I've missed out on a good deal just a year later (a 'negative carpetbagger'?). And given II's charging structure, if you keep an account open with them, then you may as well keep a lot in it, as long as you don't go over the 'trading allowance per month' they use.

    In moments of navel-gazing, I wonder if they keep the rumours of an IPO going just to make customers think it's always worth staying with them.
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    If II do IPO it will be interesting to see how they value it as HL have now dropped to a PE of around 24 but AJ Bell have turbo charged forward to around 47 now. Jarvis looks cheaper at 18. HL are good at attracting lots of high paying newbie customers but that might change as the younger ones are more familiar with Freetrade, T212, etc and start expecting platforms to be free.
  • MDMD
    MDMD Posts: 1,554 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper
    edited 18 January 2021 at 2:41PM
    EQi is also the only S&S LISA provider that allows transfers from over-40s, so that option may be closed too.....

    i wonder why Equiniti went through the hassle of setting up EQi only to sell it a little while later.
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    MDMD said:
    i wonder why Equiniti went through the hassle of setting up EQi only to sell it a little while later.
    EQi was just a rebrand of Selftrade which Equiniti bought about 5 years ago. II probably made them a very good offer on the basis of converting most of those accounts onto the more lucrative £9.99 fee model with systems consolidation and economies of scale. Fidelity are also looking to make similar purchases after taking over Cavendish who were already using their platform. Sadly the market is ideally placed for consolidation into a few big retail platforms.
  • Just got an email saying equiniti is flogging my account along with others to iii

    So from comdirect -> squaregain -> selftrade -> equiniti -> iii this platform has been sold once for about every three share trades I've made :-)
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