Interactive Investor sold some of my shares without my consent

spiritus

I purchased a small amount of shares with the Share Centre around 12-18 months ago.

Since that purchase the business was taken over by Interactive Investor. After 2-3 months I noticed that II were taking £ 9.99 from my account for platform fees (Share Centre didn't charge anything). I had no intention of trading on a regular basis and only wanted to make a purchase and keep the shares until a later date when I might sell them.

I informed II of this in May by which time I already "owed" them 3 months worth of platform fees. Their replies have been slow and disjointed and seem to have purposely avoided addressing my specific situation and instead leaned more towards general replies. They drew my attention to a "price promise" whereby customers migrating from the Share Centre would will be refunded any difference between what II have charged and what the Share Centre would have charged after six months from the migration". 

I informed them that I will work on the assumption that that applies to me and also repeated my claim that I would not be paying their platform fees as I would be paying for a service I did not use.

The cash balance on my account (which started as £ 0.00) was gradually moving into a negative as all the platform fees that were being charged to me (and I didn't pay) were accruing.

I assumed that fast forward to six months time from the migration i.e. NOW and that ii would then cancel the fees I had incurred but I have just noticed they have sold almost 50% of my shares to pay off the platform fees.

Can they sell your shares without consent? Are they allowed to do this? Should they not have waited for the credit to be raised to pay off the platform fees?

wmb194

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

spiritus

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

maxsteam

spiritus said:

Can they sell your shares without consent? Are they allowed to do this? 

Yes. In certain circumstances in can be called a margin call and the theory is that it stops you getting deeply into debt.

In your shoes, I would try to transfer the remaining shares to another platform (or sell them), then close the account. It sounds like Interactive Investor are an awkward broker to deal with and this is unlikely to change. The longer you keep the account, the more fees you are going to have to argue about.

The other action I would take would be to open a formal complaint (they should provide details of this process on their website).

wmb194

spiritus said:

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

I wouldn't assume that the right hand knows what the left hand is doing at any broker. You're going to need to get into contact, complain and hope it'll agree to make you whole again. Also think about where to move your holding(s), the possibility of materialising them i.e. receive certificates for them or just selling and closing your account. If c.£60 is enough to wipe out half of your holding it sounds like it might not be worth the hassle of keeping them.

Thrugelmir

spiritus said:

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

Why didn't you fund the account with a cash balance.  Their "price promise" was a refund of excess fees after six months.  In effect you've been overdrawn. 

spiritus

Thrugelmir said:

spiritus said:

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

Why didn't you fund the account with a cash balance.  Their "price promise" was a refund of excess fees after six months.  In effect you've been overdrawn. 

Because their entire platform fee was an excess fee compared to the previous charges of the Share Centre (which were £ 0.00).

I was also told several times that the difference in fees would be credited back to me after six months

Alexland

Given the Interactive Investor fixed charges are so obviously completly unsuitable for such a small investment the best thing to have done upon being told about the takeover and new charges would have been to transfer the investment elsewhere or just sell it down to cash as non-material and close The Share Centre account. II should still give you a refund of the difference in charges and maybe compensation if you complain but next time take action more promptly when alerted to a change in the terms.

Thrugelmir

spiritus said:

Thrugelmir said:

spiritus said:

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

Why didn't you fund the account with a cash balance.  Their "price promise" was a refund of excess fees after six months.  In effect you've been overdrawn. 

I was also told several times that the difference in fees would be credited back to me after six months

But you weren't paying the fees. As there was insufficient cash in your account.  The two transactions would be dealt with seperately. i.e. Pay the fees , later if an eligible account be credited them back after 6 months. Very straightforward. 

Albermarle

If c.£60 is enough to wipe out half of your holding it sounds like it might is definitely not  worth the hassle of keeping them.

Sounds like the whole holding is worth less than £100 - so I have corrected your text with another suggestion .

spiritus

Thrugelmir said:

spiritus said:

Thrugelmir said:

spiritus said:

wmb194 said:

Yes, it's normally in brokers' T&Cs that they can sell some/all of your holdings in order to cover their fees. Some of them will charge you a penalty, too.

Even though there was a credit pending?

Why didn't you fund the account with a cash balance.  Their "price promise" was a refund of excess fees after six months.  In effect you've been overdrawn. 

I was also told several times that the difference in fees would be credited back to me after six months

But you weren't paying the fees. As there was insufficient cash in your account.  The two transactions would be dealt with seperately. i.e. Pay the fees , later if an eligible account be credited them back after 6 months. Very straightforward. 

Correct but if the two transactions were being dealt separately i.e. cash balance and share holding then I was not expecting them to sell part of my shares to fund the cash balance especially as there has been a number of messages between myself and ii where they confirm the cash balance will be credited after 6 months

Presumably I will get 6 months of platform fees credited back