Investment platform charges: time to care

interactive investor shares a comment piece by CEO Richard Wilson.

Imagine; that food prices in August would rise at their fastest rate since the financial crisis. There’s a devastating conflict threatening global food security. And with energy prices fluctuating so wildly, the issue of what happens next in the energy market is central, with very real concerns about how people will heat their homes when winter arrives. Inconceivable a year ago. 

The long-term implications feel vast. Even among the very fortunate, behaviours are subtly shifting. Our first ii ‘SIPP Snapshot’ this week showed that as inflation bites, pension contributions among the younger working age population have fallen by 8% in the first half of 2022 compared to the previous year. Meanwhile, those drawing an income have increased their withdrawals, presumably to help deal with rising cost pressures. 

Among our more fortunate demographic, it’s logical that more and more people will also start to focus on the amount they pay to invest. Once upon a time, we might get called out for ‘banging on’ about charges: people just ‘don’t care’, well-meaning consultants would say. 

Well, we care. This month, our simple flat fee subscription service will get even better value, with our standard trading charge reducing from £7.99 to £5.99; that’s a 25% reduction.  

This trading charge applies regardless of whether customers are trading UK shares, funds, investment trusts or ETFs, giving our customers freedom to choose what’s right for them and confidence in our impartial charging structure.

This is another way we have used our scale to progressively drive down the cost of investing when charges arguably matter more than ever before. Over the last four years, we have reduced the monthly price of our SIPP subscription fee by over 50% for those who are in drawdown and in our new Pension Builder plan, from £30 per month to £12.99 a month. We scrapped our drawdown fee for all our SIPP customers in October 2020 and for those who want the ‘full works’ (ISA, trading account, Junior ISA and SIPP), our all-in price of £19.99 a month is fantastic value.

Customers in our Investor and Super Investor service plans will continue to get their first trades free each month. On top of this our service plan for the more active investor – Super Investor – comes with an ultra-low trading fee of £3.99 for UK and US shares, funds, investment trusts and ETFs and a free ‘ii Friends and family’ subscription. And all our customers will continue to benefit from free monthly, regular investing.

Investors can’t control the markets, inflation or interest rate rises, but they can control their investment charges, and these costs eat into long-term returns. That’s why we’re absolutely committed to our flat fee, which stays the same as customers’ wealth grows – meaning they get to keep more of it.  

As a business we have long campaigned for retail investors - be it through our work on financial education in schools, fair, transparent fees, and shareholder democracy.  Value has always been central to our proposition. These are our principles and in this tough environment, we will continue to do all we can to help our customers and their families invest for the future. That’s not going to change.