Interactive Investor Stocks and Shares ISA: An Honest Review

I’ve been investing using Interactive Investor (ii) since I started investing four years ago.  I opened a Stocks and Shares ISA on the platform because I wanted to use a low-cost “Do-it-yourself” platform and I read some good reviews about it.  I was new to investing and am more aware now of management and platform costs.  So, I wanted to give an honest review of the Interactive Investor platform and whether I would open an account with them now if I were opening a Stocks and Shares ISA for the first time.

My service plan

I pay £9.99 a month on the plan I’m on which include £7.99 of trade credit.  This is the cost of making one buy or sell and the credit lasts for three months.  The platform also offers “free regular investing” on a wide range of funds, including FTSE 350 shares. The available options include all but one of my favourite funds.  This means that I have more than enough credit to make any additional investments I would like to.  I am a real “buy and hold” investor and have not made any sales since opening the ISA.  

The PROs

• Do-It-Yourself approach – I wanted to take a DIY approach as I wanted to learn as I went along through making my own decisions so steered clear of robo-advisor platforms like Nutmeg or one that offers ready-made portfolios like AJ Bell.  Another platform of this type is iWeb, which could work out cheaper if you are not doing a lot of trading.
• Free regular investing – as long as you are investing more than £25 a month you can invest as many times as you like for free.  There is a wide range of products you can do this for – funds, investment trusts, ETFs or individual stocks – whereas other similar platforms that also offer this free regular investing option only do it for a restricted type of product.  
• Access to funds – This platform offers access to a wide range of funds – up to 40,000 UK and international options.  
• Peace of mind – it is a large, established, successful platform.  Although other DIY platforms also have FCSC backing, ii is one of the largest which does offer some extra peace of mind.
• Customer service – whenever I’ve gone to them with a query it has been dealt with quickly and professionally
• Educational information – The website and newsletters are full of interesting articles and there are also recommended portfolios that you can mirror or take from if you wish
• Platform – the apps and website are pleasant to use.  I particularly like the “x-ray analysis” functionality which creates clear dashboards of your portfolio.  Many people say that this distinguishes ii from iWeb, another DIY platform.
• Free Junior ISAs – you also get a free Junior ISA for each of your children if you have an account with them

The CONs

• Cost (when you are starting out) – ii offers a flat fee model so using the platform is relatively expensive if you have a small balance but will become more cost effective as your pot grows, as the costs don’t increase like they do on other platforms.  For example, ii is more expensive than Vanguard or AJ Bell if you have under £50,000 invested (compared to AJ Bell) or £80,000 (compared to Vanguard).  I do not have £50,000 invested yet but hope to within a year so I am happy to stick with ii.  Once you have about £20,000 to 30,000 invested it is cheaper than robo advisors like Nutmeg and Wealthify.

Would I open an interactive investor account again if I were starting from scratch?

If I were opening an account and transferring in a significant balance from another ISA (say over £40,000) then I would definitely be happy to open an ii account as it would be a contender in terms of cost effectiveness and offers all of the other benefits above.  

If I were building my investments from scratch then I might go for a platform like Vanguard, which is what I suggested my partner go for when he opened his first ISA this year, particularly if I wanted to keep things really simple.  In any case, three of my largest investments are in Vanguard funds anyway.  

I would also consider a platform like Trading 212, which does offer access to three of my favourite funds and has no fees at all.  Your money is protected too by FCFS (up to £85,000 like many providers) but some people argue that the fact that they are relatively new and have a no-fees model might mean that there’s a better chance they will not stay profitable leaving investors with a headache to sort out if they go under.

How costs compare to other platforms

This section of the Money Saving Expert website has a useful comparison of fees across different types of platforms as well as some options for getting a first fee free year with some of the robo advisor platforms.

Opening an interactive investor account

If after reading this you feel that an ii account is a good option for you, I do have a referral link which means there is no platform fee for the first year, saving £120.  The terms and conditions are here.

This could be a good option if you have a larger balance already or you could transfer to another ISA after a year if it is not cost effective with the platform fee.  

If you are interested then just drop me a comment below.  

If you already have an ii account, or have researched it yourself, please share your thoughts below to help give a more rounded picture to other readers.