Time for investors to ‘dare to compare’, says ii

• Only 7% of investors alwayscompare the fees of an investment platform with its peers when looking to open a new account
• Only around one third of investors are confident they know exactly what fees they’re paying to invest
• Around one in three private investors will not switch investment platforms due to the fear of hidden fees
• The research comes as interactive investor urges investors to ‘dare to compare’ their investment fees, and launches new comparison tools for ISA and SIPP.

Only 7% of investors always compare the fees of an investment platform with its peers when looking to open a new account– leaving the overwhelming majority in the dark when it comes to their platform fees and at risk of overpaying, according to new research by interactive investor, the UK’s second-largest DIY investment platform.  

• Invest with ii: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

By comparison, the majority the 1,000 UK adults surveyed by Censuswide on behalf of interactive investor, said they would regularly compare other financial products like car insurance (57%), home insurance (53%), other savings products (53%) and mobile phone contracts (51%).

The new ‘Dare to Compare’ research aims to shine a light on the lack of comparison culture in the UK investment market and to empower investors to check their fees when it comes to investment platforms. Fees – especially when overpaying – can make a significant impact on investor’s wealth over time, if left unchecked. 

interactive investor believes that for consumers, choosing a platform to invest with for a financially resilient future should be as simple as choosing an online streaming package, but more rewarding. However, the data shows that this is not the case.

interactive investor’s new ISA comparison tool

To help encourage transparency on fees and charges, and to help consumers better compare – interactive investor has launched a new ISA comparison tool.

Users can type in the value of their investment portfolio, and it will compare the difference in fees between interactive investor and other major providers over different time frames.

For example, an investment portfolio of £30,000 could save around £62 in fees per year in the first year with interactive investor – and saving almost £900 across the next 10 years (assuming 5% growth per year)*. 

Platform fee > cashback offers

At this time of year, consumers may also notice the increase of cashback offers from platforms – this includes interactive investor’s current SIPP cashback offer. However, it is crucial for investors to have a careful look at the fees they’ll be paying long-term, as there’s a very real risk that this negates the cashback they’ll receive. 

interactive investor’s comparison table below (taken from its new SIPP comparison tool) shows that a £3,000 cashback offer (currently being run by Hargreaves Lansdown) for SIPP portfolios over £1 million, may actually result in investors breaking even in the first year. This is because investors with that size pot would be paying £3,000 in annual fees for their SIPP with the platform – the same amount they’d get in cashback for one year. They’re effectively getting one year ‘free’ but then longer-term they’ll be paying that higher fee every year.  

How much am I actually paying?

The research also revealed that only a little over one third (37%) of investors were confident they knew exactly what they were paying in fees each month. 

Super-high earners – those earning more than £130,000 a year – were the only group where more than half (60%) were 100% sure they knew what they were being charged. 

Barriers to switching platforms

When it comes to switching, around one in three (30%) DIY investors won’t switch investment platforms due to fears of incurring hidden fees when switching, with almost one quarter (24%) reluctant as they think switching would be too much hassle.  

Commenting, Myron Jobson, senior personal finance analyst at interactive investor, said: “The UK has a comparison culture when it comes to almost everything apart from who we trust to house our investments. This is especially surprising when you consider the savings investors could make when switching to a lower-fee investment platform, compared to the meagre, but by no means insignificant, gains that are often delivered by shopping around for insurance or a new sim card. 

“While investors can’t control the returns they gain, they can control the how much they pay for investment platforms. It’s clear there is a lack of confidence to compare or switch in DIY investing. The industry has a big role to play in addressing this and making it easier for people who invest their own money, in their own time, to get the best deal.

“It’s also disheartening to see that investors believe it’s too much hassle to switch platforms, or they worry that hidden fees may appear once they try to leave.”

It is time for investors to ‘dare to compare!’

The latest research from Compare the Market suggests that the most a person is likely to save this year by comparing car insurance is a one-off £510. In contrast, moving from an investment platform that charges fees that increase with the size of a portfolio to one with a flat-fee structure could save someone more than double that amount every single year, with savings increasing exponentially thanks to compounding. 

Over a quarter (26%) of investors believe that switching platforms won’t make a significant difference to their fees – and they may be missing an opportunity.

Myron Jobson, Senior Personal Finance Analyst, interactive investor, adds:“It’s high time the UK’s savvy shopping culture rubbed off on the investment scene. We’re a nation of bargain hunters that refuse to be duped into paying more than we should. That should be the case whether you’re buying groceries, weighing up new phone contracts, or investing for the future. Taking the time to review your fees can make a monumental difference to your wealth over time – so today we are encouraging investors to ‘dare to compare’.”

Comparison tools

You can view our ISA comparison tool here: Compare ISA Charges - ii

You can view our SIPP comparison tool here: Compare SIPP Charges - ii

The tool relies on the acceptance of cookies – please make sure you have accepted ‘Targeting Cookies’ when presented with the option. If you do not accept targeting cookies then you will be shown a static table in place of the tool.

Methodology 

The research was conducted by Censuswide, among a sample of 1,000 UK respondents (Aged 18+) that use an investment product such as a DIY investment platform or stocks and shares ISA. The data was collected between 15.01.2025 - 17.01.2025. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.

*Results are based on published ISA charges as at 06/01/2025 for Hargreaves Lansdown, AJ Bell and Fidelity. Assumptions:

• 50% of ISA investments held in funds and 50% in equities
• 2 UK equity and 2 UK fund trades per year
• 12 regular UK equity and 12 regular UK fund trades per year

Other trading behaviours will result in different charges than those shown. This comparison covers a single year and does not account for investment growth or the impact of inflation over time. To ensure a fair comparison, fund manager charges have not been included. The information provided is for illustrative purposes only. For precise charges, we recommend contacting the ISA provider directly.