Interactive Investor Review 2024 – is it the best broker for your money?

Interactive Investor review

Interactive Investor is an award-winning comprehensive online investment platform with over 400,000 customers. In this Interactive Investor review, you will learn about the services provided by Interactive Investor (ii) as well as their costs, fees and the tools and investment information they provide. In the last section of this article, I also compare Interactive Investor vs Hargreaves Lansdown, the UK's biggest investment platform.

Interactive Investor offers

Interactive Investor SIPP offer - Get £200 cashback

New customers will receive £200 cashback when they deposit or transfer at least £15,000 into an Interactive Investor SIPP* before 30th April 2024. Terms & fees apply. Capital at risk.

Interactive Investor Stocks & Shares ISA offer - Get £100 free trades

New customers will receive £100 free trades when they open an Interactive Investor ISA*. Offer ends 30th April 2024. Terms & fees apply. Capital at risk.

Interactive Investor Trading Account offer - Get £100 free trades

New customers will receive £100 free trades when they open an Interactive Investor Trading Account*. Offer ends 30th April 2024. Terms & fees apply. Capital at risk.

Who is Interactive Investor

Launched in 1995 Interactive Investor* is an award-winning online investment service that provides the DIY investor with the tools and trading environment to help them make informed investment decisions. Its 400,000 customers, and the acquisition of rival TD Direct, makes Interactive Investor one of the most engaged and active investor communities in the UK, especially since Motley Fool closed its investment forums. In July 2019 Interactive Investor announced the acquisition of Alliance Trust Savings (ATS) from Alliance Trust PLC. The latest acquisition brings together the two largest fixed-price retail investment platforms and means Interactive Investor now has £50 billion assets under administration, cementing itself as the second biggest investment platform in the UK, behind Hargreaves Lansdown.

Interactive Investor does not offer investment advice so is an execution-only service but does provide a range of investment tools, a fund shortlist called the Super 60 and some investment information to help the DIY investor which I discuss later.

In 2021 Interactive Investor received the following awards:

• ADVFN - Best Low Cost Stockbroker 2021
• ADVFN - Best SIPP Provider 2021
• ADVFN - Best Stockbroker for International Dealing 2021
• Online Personal Wealth Awards - Best Stocks and Shares ISA provider
• Investors' Chronicle and Financial Times Celebration of Investment Awards - Retail Investor Champion of the Year
• AIC Shareholder Engagement Award 2021

In 2022 Interactive Investor received the following awards:

• ADVFN - Best Low Cost Stockbroker 2022
• ADVFN - Best SIPP Provider 2022
• ADVFN - Best Stockbroker for International Dealing 2022
• Investors' Chronicle and Financial Times Celebration of Investment Awards - Investment platform of the year

What services and products are offered by Interactive Investor?

Interactive Investor ISA

An Interactive Investor ISA* allows an annual tax-free investment of £20,000 (for the current tax year) in a variety of assets including funds, ETFs, investment trusts and shares. You can open an Interactive Investor ISA in less than 10 minutes and monitor your portfolio on a computer, tablet or mobile app. There is no minimum contribution to start an Interactive Investor ISA, however, those wishing to take advantage of Interactive Investor's free regular investing service would need to invest at least £25 per month, the latter of which is the same as Hargreaves Lansdown. Additionally, Interactive Investor is running a promotion where it is giving new customers £100 free trades when they open an Interactive Investor ISA*. Offer ends 30th April 2024. Terms & fees apply. Capital at risk.

Interactive Investor Junior ISA

An Interactive Investor Junior ISA is a tax-efficient way of investing for a child's future. A person with parental responsibility can open an Interactive Investor Junior ISA and once open anyone can contribute to it, subject to the current annual allowance £9,000 for the 23/24 tax year. There is no minimum contribution to start an Interactive Investor Junior ISA, however, customers can take advantage of Interactive Investor's free regular investing service by setting up a direct debit for £25 per month. To see how Interactive Investor's Junior ISA compares, read our roundup of the Best Stocks and Shares Junior ISAs. After the age of 18 the proceeds from an Interactive Investor Junior ISA become the property of the child who can withdraw or convert it to an adult ISA.

Interactive Investor SIPP

An Interactive Investor SIPP* is a tax-efficient way of building up an income for retirement. All investments in a SIPP will currently qualify for tax relief up to a maximum of £40,000 per year or 100% of your annual income. Basic rate taxpayers will receive an uplift to any investment of 20%, so an investment of £8,000 will result in a sum of £10,000 being invested in a SIPP. Higher and Additional rate taxpayers can obtain additional tax relief through their annual tax return. Additionally, Interactive Investor is running a promotion where it is giving new customers get £200 cashback when they deposit or transfer at least £15,000 into an Interactive Investor SIPP* before 30th April 2024. Terms & fees apply. Capital at risk.

Interactive Investor Trading Account

An Interactive Investor Trading Account* is a dealing account offering a wide range of investments including funds, investment trust, ETFS and shares. You can reduce your currency costs by managing your money in up to 9 currencies across the world’s leading exchanges. By holding cash already in a foreign currency it reduces the need for FX and therefore FX charges. It's little wonder that ii has won awards for its international dealing. Interactive Investor also offers a comprehensive range of investment news, tools as well as an active investment forum. Additionally, Interactive Investor is running a promotion where it is giving new customers £100 free trades when they open an Interactive Investor Trading Account*. Offer ends 30th April 2024. Terms & fees apply. Capital at risk.

Other products and services

Interactive Investor Company Account

An Interactive Investor Company Account allows trading in the name of a UK Limited Company which offers the same benefits as a standard Interactive Trading Account. This sort of account is not offered by most other investment platforms. Investments can be made in a wide of investments including funds, investment trusts and up to four nominated individuals can place trades and manage the account on behalf of the company. 

Interactive Investor Pension Trading Account

An Interactive Investor Pension Trading Account allows investment in assets such as property which are not available within the Interactive Investor SIPP. A pension trading account can be set up in association with a SIPP/SSAS administered by your preferred pension provider.

What can you invest in using Interactive Investor?

With Interactive Investor investments can be made in shares, unit trusts, OEICs, investment trusts, retail bonds, ETFs, bonds, gilts and currencies. You can pick the actual investments yourself or use the guidance and tools, detailed in the next section, to help you.

Free tools and investment advice offered by Interactive Investor

Free Research Account

Opening a Free Research Account provides access to additional insights research tools plus you can set up watchlists, a virtual portfolio and register for email updates.

Interactive Investor model portfolios

Interactive Investor previously promoted 12 model portfolios which were created by the Money Observer editorial team. Now it has relaunched with 5 model portfolios whose names accurately explain what they aim to achieve.

• Active Growth
• Active Income
• Low-cost growth
• Low-cost income
• Sustainable growth

What I really like about these portfolios is that they include a mix of actively managed fund and passive/tracker funds. They also use unit trusts, ETFs and investment trusts and I don't know of another platform that does this. Usually, platforms focus on unit trusts, despite the opportunities and cost savings available via investment trusts and ETFs. What is interesting is that ii's new branding is all about transparency and true to its word you can actually see the portfolios and the constituents without registering with ii. So, in theory, there is nothing to stop you taking this information and investing with an alternative platform. However, Interactive Investor's cost-effectiveness likely means that most users probably wouldn't end up doing this. Even if customers don't decide to follow the ii model portfolios it at least provides investment ideas to explore themselves.

Interestingly, for those wishing to buy shares directly (i.e not via funds) ii does provide occasional portfolios to ponder, such as its Winter Portfolio.

ii Super 60

ii has finally launched its own 'Best Buy' list to compete with the newly revamped Hargreaves Lansdown Wealth 50. The Interactive Investor Super 60 is ii's take on a range of high-conviction active and passive funds, investment trusts, and ETFs. The aim is to help investors identify collective investments with consistent returns, and those which they believe are good choices in the prevailing market environment. Ii says that the investments are picked purely on quality and performance and are free of commercial incentives.

The Hargreaves Lansdown Wealth 50 (which also strangely has 60 funds in it) was launched around the same time. However, it was met with some criticism as it included underperforming funds from Neil Woodford, the most high profile fund manager out there. One disgruntled fund manager who is not included in the Wealth 50 took to the national press to question the new shortlist. According to The Times, fund manager Terry Smith accused Hargreaves of "recommending funds based on their potential to maximise the fund supermarket's profits rather than their ability to outperform for clients". Hargreaves denied this and their previous incarnation of the Wealth 50 has produced strong returns, which suggests their selection process stands up to scrutiny.

However, the fact that interactive investor's Super 60 includes ETFs and investment trusts, alongside unit trusts is a huge positive. The proof will be in the ii Super 60 performance.

Quick-start funds

The ii Quick-start funds are meant to be "designed as a low cost, easy way to invest and grow your money over 3 years or more"

Basically, ii has picked 3 Vanguard Lifestrategy funds. They are a bit late to the party as here is a research article by me which was published in the Telegraph demonstrating how good these funds are - read 'The tracker fund that survives stock market routs'.

What is very exciting is that Interactive Investor is not only promoting these funds (other platforms don't promote them because they'd rather investors bought funds that earned them more money) but ii is also one of the cheapest ways to own Vanguard funds if you have over £96,000 invested. Not only that but you can hold these funds within the ii SIPP.

Ethical Investing

If you prefer to invest ethically, Interactive Investor provides an impressive set of useful resources. A lot of research has been collated to produce a 'long list' of over 140 ethical investment options (which you can easily filter by asset type) as well as additional tools, such as a detailed definition table and a handy jargon buster.

ACE 40

From its list of 140 ethical investment options, Interactive Investor has created 'ACE 40' - a mix of 40 funds, investment trusts and exchange-traded funds (ETF's) which it believes are 'best-in-class'. Each of the ACE 40 investment options is attributed with an ethical style where it either avoids, considers or embraces certain ethical or unethical practices.

Interactive Investor states that the ACE 40 list should: 

1. Provide investors with a menu of choices of ethical investments, across a broad variety of markets and investment types
2. Ensure that there is no 'greenwashing' and that all ACE 40 investments are managed in a genuinely ethical manner
3. Only choose investments with the potential to deliver strong financial performance

How does Interactive Investor platform work

Interactive Investor allows you to sign up to an account where you can invest via an ISA, SIPP etc. However, ii also offers a free research account that will interest both novice and experienced investors.

The account offers what you would expect from a leading platform, such as a document history section where all the relevant investment documents are held relating to a client's investments. Transaction history shows details of all transactions conducted on the account.

The research account is where all the investment research and news (including newsletters) can be found together with access to the Interactive Investor forum.

What I do really like is the ability to create a Virtual Portfolio within the research section. This means you can create watchlists and track a portfolio of shares, investment trusts, unit trusts or ETFs and make notes. I hope other investment platforms follow suit as its a useful tool in helping consumers understand risk and reward while (or indeed before) they invest.

The Interactive Investment platform is easy to use with the ability to manage all your investments needs in one place via a desktop computer, tablet or the Interactive Investor dealing app. The whole site has recently had a revamp, which I think has actually improved the user experience. Previously interactive investor's design was more tailored to sophisticated investors (which have been the core of its customers) but the revamp makes it much more accessible to less experienced investors, especially with the introduction of its fund shortlist (the Super 60) and Quick-start funds.

Interactive Investor ISA review

The Interactive Investor ISA* is suitable for all DIY investors from beginners to experts. The range of investment choices is one of the best among investment platforms and trading is quick and easy. The investment tools, research and investor forum add an extra dimension to Interactive Investor's offering. The downside is that there is a £3.99 standard dealing charge on switches, even for funds, which can make the platform expensive for those who have smaller pots and wish to regularly buy or switch investments.

Those with smaller pots (less than £50,000) can take advantage of the cheaper 'Investor Essentials' plan, priced at £4.99 per month, however, dealing charges do need to be factored in when working out the overall cost. Those with portfolios of £50,000 or more will pay fees of £11.99 per month, however, as part of the 'Investor' service fee (which we explain in more detail below), investors do receive a free trading credit per month. Investors choosing the £19.99 per month 'Super Investor' plan get two free trading credits per month.

Overall, the investment choice is impressive and Interactive Investor becomes more cost-effective when you have a portfolio of a significant size. When we analysed all the investment ISA platforms in the market, based on cost, Interactive is particularly cost-effective when you have an ISA portfolio worth over £30,000 or you want to invest in a range of assets beyond just unit trusts.

If you don't plan to invest in more esoteric investments then for portfolios up to £30,000 Hargreaves Lansdown* offers one of the widest range of investment funds. Hargreaves Lansdown does not charge for fund switches (Interactive Investor charges £3.99 per trade on their Investor service plan) but does charge for transacting other asset types such as shares and ETFs. But investors wanting to frequently trade in ETFs and shares can get the switching charge discounted to £5.95 with Hargreaves Lansdown.

Another alternative is to consider is AJ Bell which while not the cheapest investment platform for ISAs it is among the best value across a range of portfolio sizes (from £15,000 to £200,000), negating the need to keep moving ISA providers as your portfolio grows.

If you want to simply invest in tracker funds then one of the cheapest ways to do this is via the Vanguard Investor platform, although you can only buy Vanguard's own tracker funds and ETFs. But if you want to invest over £96,000 or more then it is still cheaper to buy Vanguard's funds through Interactive Investor.

Interactive Investor ISA Fees

Interactive Investor charges a flat monthly fee for its ISA and has three plans to choose from. I have summarised the fees and trade charges for each of the service plans below.

	Investor Essentials	Investor	Super Investor
Monthly Fee	£4.99 per month (Plan upgrades to Investor plan if portfolio is over £50k)	£11.99 per month	£19.99 per month
What can you invest via	ISA, trading account	ISA, JISA, trading account	ISA, JISA, trading account
Free monthly trades	No free trades	1 free trade	2 UK / ETF / fund trades
Friends and Family	£5 per month	2 free members	5 free members
UK share and ETF trades	£3.99	£3.99	£3.99
Funds and Investment trust trades	£3.99	£3.99	£3.99
US Share trades	£3.99	£3.99	£3.99
Other international share trades	£9.99	£9.99	£5.99
Dividend reinvestment	£0.99	£0.99	£0.99
Regular investment	£0.00	£0.00	£0.00

Interactive Investor regularly reviews its pricing structure and on 1st September 2023, reduced its fee for UK and US trades on all plans from £5.99 per trade to £3.99.

Interactive Investor friends and family

In November 2021 Interactive Investor introduced a 'friends and family' plan for £5 per month. The plan allows customers to gift up to 5 free subscriptions to ii (each saving £4.99 per month). Those subscribed to the Investor plan automatically get up to 2 free members included and those on the Super Investor plan can have up to 5 free members included.

Interactive Investor SIPP review

The Interactive Investor SIPP* is suitable for all DIY investors from beginners to experts. As a platform Interactive Investor becomes more attractive for investors with larger sums due to its fixed fee charging structure, as opposed to charging a fee based on a percentage of your assets as most platforms do. That means Interactive Investor is ideal for those investors with large SIPP portfolios particularly if they are interested in investing in more esoteric investments. However, if they trade frequently the trading costs will slowly mount up, although discounts are available as described below. When we compared the charging structures of all the leading SIPP providers out there, Interactive Investor is generally one of the cheapest options if your SIPP is worth over £50,000. In fact, the recent launch of its 'Pension Essentials' plan means it is now cheaper than many of its competitors for those who have around £30,000 in their pension pot.

As for alternatives to the Interactive Investor SIPP, Vanguard Investor's SIPP charges a fee of 0.15%, capped at £375. However, if you intend to invest and hold more than £104,000 in Vanguard funds then it will still be cheaper to invest via Interactive Investor, plus with Interactive Investor you don't have to just invest in Vanguard funds. Check out our independent Vanguard SIPP review for more information. However, if your SIPP is worth under £50,000 and you just want to invest in investment funds (unit trusts) then Charles Stanley* is among the cheapest SIPP providers and also one of the most popular based on customer feedback we've received.

Interactive Investor SIPP Fees

In February 2022 Interactive Investor launched its Pension Builder plan designed to reduce costs and simplify its fee structure for those focused solely on building their pension. It subsequently launched 'Pension Essentials', a plan priced at just £5.99 per month, aimed at those with a smaller pension pot and those just starting out. We break down the Interactive Investor SIPP fees below.

Interactive Investor 'Pension Essentials' and 'Pension Builder' plans - Good for those solely focused on building a pension

Those wishing to invest solely in an Interactive Investor SIPP can do so via its two pension plans, Pensions Essentials and Pension Builder.

The plans allow investors to invest in a number of funds, investment trusts, ETFs and popular UK shares, however, there are no free monthly trades included and investors do not get access to its ISA, Junior ISA or trading account.

We explain the fees and features of Interactive Investor's SIPPs below.

	Interactive Investor Pension Essentials plan	Interactive Investor Pension Builder plan
Monthly Fee	£5.99 per month	£12.99 per month
Portfolio limit	£50,000	No Limit
SIPP Administration fee	N/A	N/A
Fee for going into drawdown	N/A	N/A
Interactive Investor offers	N/A	N/A
What can you invest in	SIPP ONLY	SIPP ONLY
Free monthly trades	N/A	N/A
UK share and ETF trades	£3.99	£3.99
Funds and Investment trust trades	£3.99	£3.99
US Share trades	£3.99	£3.99
Other international share trades	£9.99	£9.99
Dividend reinvestment	£0.99	£0.99
Regular investment	£0.00	£0.00

Investors will be automatically upgraded from the Pension Essentials plan to the Pension Builder plan when their pension pot reaches £50,000. Pension Essentials customers can add Investor Essentials (access to a Stocks and Shares ISA and Trading Account) for a total cost of £9.99 per month. Pension Builder customers can add Investor (access to a Stocks and Shares ISA, Junior ISA and Trading Account) for a total cost of £21.99 per month.

What if you want to invest in an Interactive Investor ISA and SIPP?

Those wanting to access the full range of investment accounts with Interactive Investor can simply add the SIPP to any of the investment accounts at an additional cost. See the table below for the full breakdown of costs.

	Investor Essentials	Investor	Super Investor
Monthly Fee	£4.99 per month	£11.99 per month	£19.99 per month
Portfolio limit	£50,000 for ISA or £75,000 for ISA and SIPP combined	No Limit	No Limit
SIPP fee	£5 per month	£10 per month	£10 per month
Fee for going into drawdown	N/A	N/A	N/A
Interactive Investor offer	N/A	N/A	N/A
What can you invest via	ISA, SIPP, trading account	ISA, SIPP, JISA, trading account	ISA, SIPP, JISA, trading account
Free monthly trades	N/A	1 free trade	2 UK / ETF / fund trades
Friends and Family	£5 per month	2 free members	5 free members
UK share and ETF trades	£3.99	£3.99	£3.99
Funds and Investment trust trades	£3.99	£3.99	£3.99
US Share trades	£3.99	£3.99	£3.99
Other international share trades	£9.99	£9.99	£5.99
Dividend reinvestment	£0.99	£0.99	£0.99
Regular investment	£0.00	£0.00	£0.00

Interactive Investor Trading Account review

The Interactive Investor Trading Account* offers an everyday trading account with a wide range of investments. Trade online using a computer, tablet or mobile app by accessing the Interactive Investor Trading Account platform allowing full management of investments.

Interactive Investor Trading Account Fees

There are three service plans to choose from, summarised below

	Investor Essentials	Investor	Super Investor
Monthly Fee	£4.99 per month (Plan upgrades to Investor plan if portfolio is over £50k)	£11.99 per month	£19.99 per month
Free monthly trades	No free trades	1 free trade	2 UK / ETF / fund trades
UK share and ETF trades	£3.99	£3.99	£3.99
Funds and Investment trust trades	£3.99	£3.99	£3.99
US Share trades	£3.99	£3.99	£3.99
Other international share trades	£9.99	£9.99	£5.99
Dividend reinvestment	£0.99	£0.99	£0.99
Regular investment	£0.99	£0.99	£0.99

Interactive Investor (ii) also offers live share pricing which can be bolted onto its trading account for an additional monthly fee of £20 plus vat.

Does Interactive Investor pay interest on cash balances?

Yes, Interactive investor pays interest on cash balances for a number of account types including its ISA, Junior ISA, SIPP and Trading Account. We have detailed the interest payable on each type of account below.

Interest payable on cash held in an ISA or Junior ISA

• 1.50% up to £10,000
• 2.50% on cash balances between £10,000 and £100,000
• 3.50% on cash balances over £100,000

Interest payable on cash held in a SIPP

• 2.25% up to £10,000
• 3.00% on cash balances between £10,000 and £100,000
• 3.50% on cash balances over £100,000

Interest payable on cash held in a Trading Account

• 1.50% up to £10,000
• 2.50% on cash balances between £10,000 and £100,000
• 3.50% on cash balances over £100,000

Interactive Investor customer reviews

Interactive Investor is rated as 'Excellent' on independent customer review site Trustpilot, with a total score of 4.7 out of 5.0 from over 23,000 reviews. The positive reviews make up around 89% of the total reviews and many mention the excellent customer service that Interactive Investor provide. Of the small proportion of negative reviews - around 7% - some have mentioned delays when transferring funds.

Is Interactive Investor safe?

Under the Financial Services Compensation Scheme (FSCS), investor assets are protected up to a maximum of £85,000 per person. Any cash held is pooled with that of other customers and deposited with a number of financial institutions. In the event that one of these fails then cash deposits are protected up to a value of £85,000 per person, per institution.

Summary - Interactive Investor review?

Interactive Investor suits those DIY investors who want to manage their own investments, possibly invest in more esoteric investments beyond unit trusts, investment trusts and ETFs and who have a significant portfolio. That's because Interactive Investor has a fixed fee platform charge rather than charging a fee based on your portfolio size. That means that if you have an ISA portfolio or SIPP portfolio worth over £50,000 Interactive Investor will be among the cheapest investment platforms out there. That is true even if you factor in their switch transaction charges. These transaction charges are even applied to unit trust switches, which many providers don't do.

While there are many positives to Interactive Investor's platform there have been negatives. Their acquisition of rival platform TD Direct and the subsequent website upgrade was met with quite a lot of negative customer reviews online with some having difficulty trading. This is now behind them and the site has now been revamped. So take online reviews in context. It's not unusual, Fidelity customers experienced similar frustrations (see my Fidelity review) as a result of a website upgrade.

Also for investors with ISA or SIPP portfolios under £30,000, there are other cheaper options especially if you only plan to invest in unit trust funds. For those looking for excellent customer service, investment research and excellent online functionality then Hargreaves Lansdown* remains a popular option. Alternatively, the AJ Bell* platform is among the cheapest platforms for most people who are looking to invest in unit trusts and want to hold both their Stocks and Shares ISA and a SIPP on the same platform (read our full AJ Bell review)

Interactive Investor vs Hargreaves Lansdown

Hargreaves Lansdown is the leading investment platform in the UK with Interactive Investor now the second-largest by assets under management thanks to its acquisition of TD Direct. For a lot of investors when it comes to choosing the best platform for them it comes down to a choice between Hargreaves Lansdown vs Interactive Investor. For ease I've highlighted some of the key differences and similarities below:

• Interactive Investor and Hargreaves Lansdown do not charge exit fees unlike some other investment platforms (Hargreaves Lansdown finally scrapped exit fees in September 2019)
• Both have a wide range of investment choices and investment wrappers although Hargreaves also offers Junior SIPPs and annuities
• Hargreaves Lansdown does not charge for unit trust fund switches
• While both charge for switching other types of investment both offer discounts to customers making regular switches.
• Both offer investment research, fund shortlists, research reports and suggested portfolios
• Interactive Investor provides investment forums and an investment community
• Interactive Investor is better value for investors with large ISA and SIPP portfolios over £30,000+
• Hargreaves Lansdown is usually more cost-effective for portfolios under £30,000
• Hargreaves Lansdown has by far the best customer service, website interface and app

 

 

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