interactive investor introduces free regular investing

by Jemma Jackson from interactive investor |

We’re the first of the big investment platforms to scrap its regular investing fee, from 8 January 2020.

interactive investor, the UK’s second largest direct-to-consumer investment platform, is ringing in the new year by introducing free regular investing from 8 January 2020. It is the first of the big investment platforms to scrap its regular investing fee. 

In the spirit of interactive investor’s flat-fee charging model, which does not favour one type of investment over another, customers can invest for free regardless of whether they choose funds, investment trusts, ETFs or individual stocks – or they can mix and match. The minimum amount for regular investing is £25 per month.

Consigned to the past is interactive investor’s 99p fee for regular ‘monthly’ investing, leaving customers with just one easy-to-understand, pounds-and-pence monthly flat fee. 

Richard Wilson, Chief Executive, interactive investor says: “The removal of the regular investing fee means one less thing to get confused about and one less platform fee to add up. It’s about building confidence and knowing that’s all there is to it. It’s just free. That’s the value.

“Having permanently scrapped exit fees over a year ago and moved from a quarterly to a far more intuitive monthly flat fee last year, we are constantly exploring ways to simplify and add value. We want to do as much as we can to make investing simple. With no percentage fees, just a flat fee that stays the same as investors’ wealth grows, investors can keep more of their hard-earned cash, and keep control of their financial future.”

Regular investing: A look at the rest

Hargreaves Lansdown charges nothing for regular investing into funds but does charge £1.50 per qualifying investment trusts, ETFs and FTSE 350 shares. Fidelity Personal Investing also charges £1.50 for investment trusts, shares and ETFs. Halifax Share Dealing charges £2 for shares, funds, investment trusts and ETFs, and Barclays charges £1 for “all automated regular investments”. AJ Bell, meanwhile, charges a £1.50 regular investing fee for both shares, funds, investment trusts and ETFs.

Adding complexity, and adding up

Moira O’Neill, Head of Personal Finance, interactive investor, says: “Regular investing charges add complexity and add up – potentially to thousands of pounds over the long term. For those investing £25 per month into just one fund or trust, over 20 years, assuming an annual return of 5%, the removal of the 99p regular investing charge would make investors £400 better off. 

“Customers investing into three funds or trusts a month, each at £25 per fund/trust, would be £1,200 better off over 20 years – and more than £3,200 if they had a basket of eight funds that they pay into a month. These figures all assume a 5% annual return, which is not guaranteed and is for illustrative purposes, but does show how costs can eat into returns over time.  

“If you have a partner or children and you all have investment accounts, you will save even more. All too often investors look at their investment charges in isolation, but a family of investors may collectively be paying a small fortune in regular investing fees, adding up to thousands of pounds over the long term. There’s more savings to be had, too – while Junior ISAs are not a stand-alone interactive investor product, they come free with our accounts. You can have as many free Junior ISAs as you have children.”

Last year, interactive investor replaced its quarterly flat fee with a monthly flat fee. 

The removal of the regular investing charge comes just over a year after interactive investor permanently scrapped exit fees in November 2018, having waived the levy since December 2017.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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