Remove ads

Introducing the LemonFools Personal Finance Calculators

Interactive Investor scraps exit fees

Discuss Brokers, trading, fees, experiences
pbarne
Posts: 30
Joined: November 4th, 2016, 7:03 pm
Been thanked: 1 time

Interactive Investor scraps exit fees

#178636

Postby pbarne » November 6th, 2018, 10:03 pm

Hadn't seen this posted here yet so:

Interactive Investor scraps exit fees for its DIY investors with immediate effect ahead of FCA plans to ban them.

https://www.thisismoney.co.uk/money/diy ... ately.html

Now it's easier to escape...

Alaric
Lemon Quarter
Posts: 2254
Joined: November 5th, 2016, 9:05 am
Has thanked: 4 times
Been thanked: 445 times

Re: Interactive Investor scraps exit fees

#178643

Postby Alaric » November 6th, 2018, 10:39 pm

pbarne wrote:Interactive Investor scraps exit fees for its DIY investors with immediate effect ahead of FCA plans to ban them.


Didn't TD Direct also not have exit fees?

Darka
2 Lemon pips
Posts: 171
Joined: November 4th, 2016, 2:18 pm
Has thanked: 273 times
Been thanked: 68 times

Re: Interactive Investor scraps exit fees

#178677

Postby Darka » November 7th, 2018, 7:36 am

not that I'm planning on leaving, but that's great news.

doug2500
2 Lemon pips
Posts: 187
Joined: November 4th, 2016, 11:51 am
Has thanked: 19 times
Been thanked: 46 times

Re: Interactive Investor scraps exit fees

#178698

Postby doug2500 » November 7th, 2018, 9:03 am

Alaric wrote:
Didn't TD Direct also not have exit fees?


I think that's correct, and was one of the reasons I recommended them to family so I was a bit upset when ii took them over.

Well done to ii for doing this. Although maybe it's just good, free publicity if they're going to be banned anyway.

Dod101
Lemon Quarter
Posts: 1953
Joined: October 10th, 2017, 11:33 am
Has thanked: 343 times
Been thanked: 659 times

Re: Interactive Investor scraps exit fees

#178702

Postby Dod101 » November 7th, 2018, 9:12 am

Very useful since I am about to have my ATS holdings added to those I already hold with II. I will be moving some holdings elsewhere anyway.

Dod

Lootman
Lemon Quarter
Posts: 4209
Joined: November 4th, 2016, 3:58 pm
Has thanked: 9 times
Been thanked: 653 times

Re: Interactive Investor scraps exit fees

#178790

Postby Lootman » November 7th, 2018, 2:46 pm

Good. I had just decided to move my ISA from ii to HSBC as I have been persuaded (mostly by people here, so thank you) that I am over-con-concentrated at ii and I don't really know much about them, being ex-TD.

Hariseldon58
2 Lemon pips
Posts: 215
Joined: November 4th, 2016, 9:42 pm
Has thanked: 9 times
Been thanked: 94 times

Re: Interactive Investor scraps exit fees

#178831

Postby Hariseldon58 » November 7th, 2018, 5:53 pm

Interactive Investors are offering incentives to transfer in of up to £2,000,000, deadline 31/12/2018, need to leave it with them for 12 months.

Personally I am with HSBC and Hargreaves, both of which are good but after Beaufort Securities, peace of mind suggests multiple brokers.

TedSwippet
Lemon Slice
Posts: 288
Joined: November 4th, 2016, 12:57 pm
Has thanked: 27 times
Been thanked: 79 times

Re: Interactive Investor scraps exit fees

#178848

Postby TedSwippet » November 7th, 2018, 7:14 pm

Hariseldon58 wrote:Interactive Investors are offering incentives to transfer in of up to £2,000,000, deadline 31/12/2018, need to leave it with them for 12 months.

Thanks for the heads-up. This presents me with a bit of a dilemma. For assorted historical reasons I have a SIPP with Alliance Trust and another with Interactive Investor. I have been happy with both, and planned to just leave them alone and let Interactive Investor merge them as and when.

However ... it looks like I could set a transfer in motion myself now and scoop up £500. I might potentially lose £150 in Alliance Trust transfer-out charges (not sure on that), but I would still come out ahead relative to doing nothing and waiting for the merge. It all seems against the very spirit of the thing, but then, they don't actually say that this won't work. Hmmm.

Personally, I'm always a little wary when platforms start bribing customers to join them. The worry is, are they planning something later that you won't like? Interactive Investor has always been very pro-flat fees, which I like, but after they have consumed Alliance Trust we're left with very little competition at this price point.

Hariseldon58
2 Lemon pips
Posts: 215
Joined: November 4th, 2016, 9:42 pm
Has thanked: 9 times
Been thanked: 94 times

Re: Interactive Investor scraps exit fees

#178860

Postby Hariseldon58 » November 7th, 2018, 8:35 pm

@TedSwippet

There is a mention that the offer is for new transfers in, I’d check that Alliance Trust is ok before you do it.

I took an incentive to join Hargreaves Lansdowne, which was pleasant and there seems to have been no downsides, with excellent service.

I believe it is prudent to have multiple brokers when you are well outside the compensation limits by a good margin.

mc2fool
Lemon Quarter
Posts: 1054
Joined: November 4th, 2016, 11:24 am
Has thanked: 4 times
Been thanked: 192 times

Re: Interactive Investor scraps exit fees

#178863

Postby mc2fool » November 7th, 2018, 8:50 pm

Hariseldon58 wrote:Interactive Investors are offering incentives to transfer in of up to £2,000,000, deadline 31/12/2018, need to leave it with them for 12 months.

Yeah, but only if you are 1000 people transferring in £1,000,001,000+ :D

Hariseldon58
2 Lemon pips
Posts: 215
Joined: November 4th, 2016, 9:42 pm
Has thanked: 9 times
Been thanked: 94 times

Re: Interactive Investor scraps exit fees

#178872

Postby Hariseldon58 » November 7th, 2018, 9:33 pm

@mc2 fool

The transfer bonus is up to £2,000 depending on the amount transferred, I don’t believe there is a cap.

My original post was incorrect, I got too excited typing zeroes !

TedSwippet
Lemon Slice
Posts: 288
Joined: November 4th, 2016, 12:57 pm
Has thanked: 27 times
Been thanked: 79 times

Re: Interactive Investor scraps exit fees

#178879

Postby TedSwippet » November 7th, 2018, 10:33 pm

Hariseldon58 wrote:There is a mention that the offer is for new transfers in, I’d check that Alliance Trust is ok before you do it. ... I took an incentive to join Hargreaves Lansdowne, which was pleasant and there seems to have been no downsides, with excellent service.

I'll certainly check with Interactive Investor before starting anything. They do note that they will not accept 'abuses' of the system, but I don't think I'll quite qualify on that score. 'Gaming' the system, perhaps.

I dislike Hargreaves Lansdown's fee structure. I hold funds, and 0.45% of those annually would be a ruinously expensive complete deadweight loss. Admittedly the funds I hold can be reasonably well mimicked by ETFs, but with extra trading costs that I'd prefer to avoid, and I would rather stick with my selected investments than move around merely to sidestep the silly ideas of some marketing halfwit employed by Hargreaves Lansdown. Also, I like to support platforms that don't try to gouge a part of their customer base with a sizeable percentage-based fee.

Hariseldon58 wrote:I believe it is prudent to have multiple brokers when you are well outside the compensation limits by a good margin.

Yeah. I think I'm more relaxed on this than many (and yes, I do remember Beaufort). As long as a platform properly segregates client holdings, I should be safe from a collapse. Some delay in getting my assets back, and doubtless a bit of nail-chewing in the interim, but nothing worse seems likely. And as a backstop, I still have a decently sized GPP with Aviva from a prior employer, so that's there if needed to paper over any cracks.

All the funds I use are from stable ... er ... stables. HSBC, Vanguard, and Legal and General, and that's it, so I don't really worry about any of those companies collapsing either. And the £50k FSCS coverage doesn't cover much of my pension anyway. (There aren't enough platforms in the UK for me to split it into chunks below £50k!)

Of course, maybe this will all come back to bite me at some point. However, with Interactive Investor becoming the second largest platform once they consume Alliance Trust, I feel relatively confident that they will follow the rules and stay solvent (unlike Beaufort).

Alaric
Lemon Quarter
Posts: 2254
Joined: November 5th, 2016, 9:05 am
Has thanked: 4 times
Been thanked: 445 times

Re: Interactive Investor scraps exit fees

#178891

Postby Alaric » November 8th, 2018, 12:40 am

TedSwippet wrote: I feel relatively confident that they will follow the rules and stay solvent (unlike Beaufort).


The lesson of Beaufort is that the capital adequacy of the platform or its owners is an issue. I also think that Beaufort was in part some play acting to enable claims under FSCS.

Hariseldon58
2 Lemon pips
Posts: 215
Joined: November 4th, 2016, 9:42 pm
Has thanked: 9 times
Been thanked: 94 times

Re: Interactive Investor scraps exit fees

#178938

Postby Hariseldon58 » November 8th, 2018, 9:46 am

Beaufort did leave a few investors out of pocket and some diversity of supplier is not a bad thing.

In bad times, apparently unlikely events occur far more often than one might anticipate.

Better to have £500k with four brokers than £2m with one, if you were unfortunate enough to be with the failing broker you might be classed as able to 'afford' a hit. With £500k there might be more sympathy and good will from compensation schemes.

TedSwippet
Lemon Slice
Posts: 288
Joined: November 4th, 2016, 12:57 pm
Has thanked: 27 times
Been thanked: 79 times

Re: Interactive Investor scraps exit fees

#178945

Postby TedSwippet » November 8th, 2018, 10:11 am

Hariseldon58 wrote:Beaufort did leave a few investors out of pocket and some diversity of supplier is not a bad thing.

As I understand it, the only investors out of pocket were those who held "illiquid and potentially nil value positions" in some of the highly speculative investments promoted by Beaufort. Those holding normal things of the kind I have -- shares, funds, ETFs and so on -- were unaffected.

Hariseldon58 wrote:Better to have £500k with four brokers than £2m with one, if you were unfortunate enough to be with the failing broker you might be classed as able to 'afford' a hit. With £500k there might be more sympathy and good will from compensation schemes.

Probably so. Again though, client assets are ring-fenced so that there should be no question of a broker or platform taking a piece of it. Of course, this means relying on the FCA or whoever to properly oversee and police the ring-fencing here. But again, Interactive Investor will be the second largest UK platform after absorbing Alliance Trust, so unlike Beaufort they won't be as readily able to fly beneath the FCA radar.

I also have a reasonably sized US pension all in Vanguard funds at Vanguard's US operation. Should I worry about Vanguard going broke? Or turning out to be just a sham web site that instantly funnels all my money to an anonymous bank account in Nigeria? Again, I see enough checks and controls in place around this account that I cannot bring myself to worry about it.

I'm not saying that the worst couldn't happen with any of these, then. Just that I consider it a remote enough possibility that I will not expend a lot of effort or expense trying to sidestep it. I understand that others will feel differently.

Alaric
Lemon Quarter
Posts: 2254
Joined: November 5th, 2016, 9:05 am
Has thanked: 4 times
Been thanked: 445 times

Re: Interactive Investor scraps exit fees

#178990

Postby Alaric » November 8th, 2018, 1:22 pm

TedSwippet wrote: Again though, client assets are ring-fenced so that there should be no question of a broker or platform taking a piece of it.


The assets are ring-fenced except that it appeared from the Beaufort case that the liquidator can help himself as a prior claim. In the event, it was deemed that the FSCS would pay the liquidator's fees after they had been reduced a bit.

I would conclude that there's a need to look at the capital adequacy of the Broker, so there's enough to pay off the liquidator or prevent the operation failing in the first place.

Hariseldon58
2 Lemon pips
Posts: 215
Joined: November 4th, 2016, 9:42 pm
Has thanked: 9 times
Been thanked: 94 times

Re: Interactive Investor scraps exit fees

#179059

Postby Hariseldon58 » November 8th, 2018, 7:08 pm

@Ted
I think it unlikely there will be a problem, but then I think of the things that one did not expect in 2006, that had occurred by 2009.

The cost of adding ii is virtually nil, with the fees being available as credits to offset trades.

The cost of adding HSBC will be low for me as well.

It’s very low on the list of things that could go wrong but given I can cover the risk at low cost, with a cash bonus.

Alaric is correct, the liquidation costs were to come from the assets, In the first iteration of sorting out the Beaufort debacle, holdings over £150k were to be subject of a 40% haircut...

Not something to panic about but some diversity of broker , investment managers etc is not a bad idea.


Return to “Brokers and Share Dealing”

Who is online

Users browsing this forum: No registered users and 3 guests