Interactive Investor Review

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Interactive Investor was launched in 1995 and is privately owned by Interactive Investor plc, which is not listed on any exchange. The company boasts 7.4 million unique users and is one of the most active investor communities in the UK. In addition, Interactive Investor claims that over 40% of its new customers are referred by friends and family.

Interactive Investor is an execution-only broker and does not offer advice. As with most of its competitors, however, it does offer a range of financial services, including a Share and Fund-dealing account, SIPP, ISA and Junior ISA trading accounts.

Interactive Investor plc also owns Moneywise Publishing Limited, which publishes the consumer finance magazines, Moneywise and Money Observer, and their associated websites. Interactive Investor also operates shareprice.co.uk, which specialises in the mobile delivery of real-time share prices and trading.

In October 2016, Interactive Investor agreed on a deal to buy TD Direct Investing (financed by JC Flowers, the venture capital group). The combined firm has over £18 billion under management, catapulting it above Barclays Stockbrokers to become the UK’s second-largest online broker after Hargreaves Lansdown. The deal was completed in 2017.

This review will focus specifically on Interactive Investor and its current services.

Commissions & Fees

As with many of its competitors in the UK market, Interactive Investor has a fee structure that depends on the number of deals placed in the previous calendar month.

For 0-9 trades during the previous month, the price is £10.00 per deal, but this decreases to £6.00 if more than 10 trades were placed, on average, during the previous three months.

Together with the commissions per trade, the Share and Fund dealing, ISA and SIPP accounts also incur flat fee administration charges of £22.5 per quarter (the administration charge can be used as payment for trades). For a SIPP account, there is also an annual administration charge of £100 plus VAT.

Furthermore, trading commissions fall to only £1.00 with dividend reinvestments and automated monthly investments (trades placed on the third Wednesday of each month). There is no charge for account inactivity.

All fees considered, the charges applied by Interactive Investor are at the lower end compared to the UK industry standard, and offer superb value for money given the level of products and services provided.

Research

When it comes to fundamental research, Interactive Investor provides a brilliant all-around experience because it provides customers the full Morningstar research suite.

Through Morningstar, traders can conduct comprehensive research of shares, funds, investment trusts, and ETFs. Being a worldwide leader of market research, Morningstar delivers with complete analysis including even institutional level PDF reports.

Full screening capabilities are also available for shares, funds, investment trusts, and ETFs. Powered by Morningstar data, traders can screen with a wide array of data, including Morningstar star ratings.

If there is one minor weak spot with the fundamental research offering from Interactive Investor’s, it’s the lack of fixed income research.

All in all, thanks to Morningstar, Interactive Investor delivers exceptional value for investors seeking quality fundamental company research.

Platforms & Tools

While the fundamental research provided by Interactive Investor is fantastic, technical research with the broker’s trading tools is hit or miss.

Unlike industry leaders IG and Saxo Capital Markets, Interactive Investor does not offer a standalone trading platform. Instead, the website is the platform.

With charting, Interactive Investor offers the bare bones basics. Charts come straight from Morningstar, which is known for its vast array of fundamental research, not its technical analysis. No drawing tools are available and only 11 technical indicators are available for viewing.

Charts aside, Interactive Investor does provide automated technical analysis with Recognia, which is exceptional. Although you can’t markup charts directly (the views are preset), Recognia highlights common technical patterns and provides a screener to generate fresh ideas. There are also “most viewed” sections for bullish and bearish charting patterns.

Watchlists are basic but are suitable for the average investor’s needs. You can’t modify the columns and adding securities can be cumbersome because the tool requires you to enter a share count and purchase price for each entry (I simply entered one share and the current ask to fast-forward this step).

The one feature I did enjoy with the watchlists were the inclusion of quick links to quickly jump to a chart of Recognia analysis. Basic stock price alerts can also be set.

Watchlists aside, a discussion section allows users to post and read messages and views on any stock posted by other users. This is a nice feature as discussion boards are not often provided in the UK share-trading industry.

Given the lack of a decent charting tool and customizable trading tools advanced traders desire, Interactive Investor will satisfy most casual investors but leave seasoned traders disappointed.

Mobile Trading

Interactive Investor’s mobile applications are offered via the Apple Store for iPhone and via Google Play for Android devices.

The application is certainly more comprehensive than most on offer across the UK stock-trading universe, offering the opportunity to access watchlists, view charts on various time frames, access current news, watch videos, download magazines and trade.

Overall, we found the apps user friendly and comprehensively functional.

Other Notes

Interactive Investor provides a depth of services that are not delivered by many of the UK competition. Together with the usual offerings of a basic share dealing account, ISAs and SIPPS (and their Junior equivalents), broader services include spread betting and CFDs, short and leveraged ETFs, venture capital trusts, structured products, covered warrants, new issues, IPOs, bonds, gilts and retail bonds. Most of the UK share-dealing services do not provide such depth in their offerings. 

Final Thoughts

A 21-year history of providing a reliable platform for online stock trading has positioned Interactive Investor at the upper end of the UK marketplace.

Highlights include transparent pricing, brilliant fundamental research (provided by Morningstar) for stocks, funds, investment trusts, and ETFs, and exceptional automated technical analysis (provided by Recognia). Lowlights center mostly around the lack of a rich charting platform and customizable watchlist tool.

Overall, Interactive Investor left us impressed and provides the functionality required to succeed in today’s markets.

Reviewed by Steve Miley Steve Miley is Director of Research, Europe, for StockBrokers.com and heads the annual UK Share Dealing Broker Review. With 25 years of experience in institutional financial markets, Steve has won multiple Technical Analyst Magazine awards, including "Best Independent Fixed Income" and "Best FX Research." Alongside StockBrokers.com, Steve is the founder of The Market Chartist where he provides market research for institutional clients.