Last week was an interesting one in the direct-to-consumer (D2C) platform market with Interactive Investor hitting the headlines twice — first because it announced it was acquiring its D2C competitor, Trustnet Direct, and secondly because it announced its pricing.
Having acquired TDDirect in June of this year, this latest acquisition is a clear sign that Interactive Investor plans to become one of the leading players in the D2C market and challenge more established players like Hargreaves Lansdown, Fidelity and Barclays. It still has some way to grow but with two acquisitions under its belt, more are likely to follow.
Unlike other D2C platforms, Interactive Investor operates on a flat-fee basis and is extending its pricing to TDDirect customers, so it follows that Trustnet Direct will be facing similar changes. The flat-fee pricing is staying, but will rise to £22.50 per quarter from £20 currently. However, investors also get credits of the same amount towards dealing fees. As these are charged at £10 per trade (frequent traders £6), investors only need to trade nine times a year to offset the cost (funds or shares).
The annual fee for a Sipp will rise from £96 to £120 annual admin fee. For full details of the new fees click here.
The new pricing will take effect for existing Interactive Investor and TD Direct customers on 11th December, but new accounts as of today (30th October) will pay the new rate. Customers on both platforms will be moved to a new single platform in December.
So, how does its pricing compare? Most D2C platforms charge a percentage fee, and some don’t charge for trades. Interactive Investor’s flat fee structure is good news for investors with larger portfolios since it will not go up as the value of the portfolio rises. It will also work well for investors who trade no more than twice a quarter because every investor receives the same amount in trading credits. It’s definitely a win-win situation if investors are both infrequent traders and have large portfolios!
We’ll be updating the fees in our platform calculator soon. To use the calculator, click here.