Charles Stanley Direct and interactive investor are both investment platforms that allow you to buy investments and hold them in individual savings accounts (ISAs) and pensions. They come with lower costs than some of their rival platforms but the charging structures are very different. When choosing between the two, you also need to consider product range and the type of investing that you plan to do.
What is Charles Stanley Direct?
Charles Stanley‘s origins lie in a banking partnership established in Sheffield in January 1792. Until 2022, it was one of the oldest firms listed on the London Stock Exchange, when it was bought by Raymond James Financial, a diversified financial services company listed on the New York Stock Exchange. Today, Charles Stanley is one of the UK’s leading wealth management firms, providing a range of financial planning and investment management services to charities, trusts, financial advisers and institutions. But it also has a direct to customers platform that it launched in March 2013. At the time of the sale to Raymond James Financial, Charles Stanley had approximately 200 wealth managers and £27bn in client assets.
What is interactive investor?
interactive investor (sometimes referred to as ii) has a head office in Manchester and is owned by Abrdn, a global investment company which is a constituent of the FTSE 250 index of medium-sized companies listed on the London Stock Exchange. Founded in 1995, in recent years interactive investor has bought a few rival platforms, meaning it now has more than 400,000 customers and £50 billion of assets on its platform. It is best-known for championing flat fees in pounds and pence over the percentage of investments charging structure that is prevalent in financial services.
Charles Stanley Direct v interactive investor – product on offer
Both platforms allow you to get started investing with as little as £25 a month. They are regulated by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme (FSCS).
Both platforms offer taxable general investment accounts, plus a range of tax-efficient investment accounts: stocks and shares ISA, Junior ISA and Self-Invested Personal Pensions (SIPP).
A benefit of Charles Stanley Direct is that it offers a flexible ISA, which allows you to withdraw money and put it back again within the same tax year, without affecting your tax-free allowance.
With interactive investor you can withdraw your money from an ISA at any time. However, this does not renew your annual contribution allowance. Once you’ve paid into an ISA, that part of your allowance has been used.
A relatively new feature of both platforms is cash services that allow customers to apply for multiple savings accounts without extra paperwork.
interactive investor’s cash service is provided by Flagstone and allows you to pick the best deal from over 25 UK banks and building societies. You can open an account with a minimum of £10,000. Flagstone takes a 0.25% management fee which is reflected in the rates offered through the service.
Charles Stanley Direct operates its cash service in conjunction with Bondsmith, a financial technology company. This allows you to hold your cash savings in one place and pick and mix between easy access, notice and fixed-rate bonds. However, the number of banking partners available through the service is not disclosed. Bondsmith retains 0.1% of the interest received but the rates shown are net of this fee.
Charles Stanley has also introduced a free 15-minute Financial Coaching session, which beginners or less confident investors may find attractive. Each subsequent 1-hour Financial Coaching session is then charged at a one-off fee of £150 (inc VAT). Alternatively, customers can opt for the OneStep Financial Plan, for a fixed fee (£900 inc VAT). This will help you understand your current situation and give you a clear action plan tailored to meet your needs. For those with assets over £200,000, Charles Stanley can also provide holistic financial advice.
interactive investor doesn’t offer coaching or advice, although its parent company Abrdn offers a range of financial advice and wealth management services.
Both platforms offer a wide investment choice of active and passive funds, plus UK and overseas shares, corporate and government bonds, exchange traded funds (ETFs) and investment trusts.
interactive investor has possibly the better international shares offering, offering direct access to global markets and claiming to offer one of the widest choices of international investments. It allows investors to convert currency from GBP into overseas currencies and gives access to new shares and stock splits on day 1. More sophisticated investors may prefer this.
Plus, interactive investor has championed shareholder voting by making free shareholder voting the default setting for customers, who receive notifications, informing them when they are eligible to place a vote. They will also be notified about important shareholder events, including AGMs. interactive investor customers can also vote through its app.
Charles Stanley offers online trades in over 4,000 US, Canadian and European shares that are available as ‘Crest Depository Interests’, known as CDIs. CDIs are UK securities representing international securities that are issued by Crest, the same arrangement through which UK and Irish shares are traded and settled. For every CDI share that is issued, Crest will hold the equivalent international share. They trade just like ordinary UK shares and even pay dividends in British pounds.
However, the key differences relate to the platforms’ fees for investing. Charles Stanley Direct charges a percentage of your investments, while interactive investor offers a range of flat-fee subscription plans.
Charles Stanley Direct charges a headline platform custody fee of 0.35% of your investments a year, divided into monthly payments. On a portfolio of £100,000, this would be £350 a year.
However, if you invest in funds only, this 0.35% fee is only levied on the first £250,000 invested. It reduces to 0.20% on the amount invested between £250,000 and £500,000, and to 0.15% on investments between £500,000 and £1 million. On the next £1 million invested, it reduces to 0.05%, with no additional charge for investments over £2 million.
If you invest in shares, Charles Stanley Direct’s base fee is still 0.35% but is subject to a minimum of £2 and maximum £20 per month. Plus, the monthly fee is waived if you place one or more chargeable stocks and shares trade in a given month.
By contrast, interactive investor charges flat fees in pounds and pence as a monthly subscription. For investors with up to £50,000, its Investor Essentials plan costs £4.99 a month, and there is also a new beginner level Pension Essentials which charges £5.99 a month. On a portfolio of up to £50,000, these would be £59.88 and £71.88 a year, respectively.
Once your investments go above £50,000, you move to the Investor Plan, at £11.99 a month, and the Pension Builder plan, which is £12.99 monthly. Whatever the size of your portfolio, interactive investor’s annual platform custody fees would be either £143.88 or £155.99, respectively. For investors with significant sums, this could be a big saving v Charles Stanley Direct.
With interactive investor you can also can also add a pension to an existing plan for a lower combined fee. Charles Stanley Direct offers customers who hold £30,000 or more, across their accounts, a free SIPP wrapper (normally £100).
With both platforms there are also charges related to the costs of buying and selling investments – and these may be different depending on the type of investment that you hold.
Charles Stanley Direct has no fee for trading in funds. But it charges £11.50 for a UK Share trade. Its international online share trades also cost £11,50, plus a percentage of the amount invested, 1% for trades worth less than £10,000.
interactive investor charges £3.99 for trading in funds and UK shares, and £9.99 for international shares. Investors in its Investor plan get a monthly credit of £3.99 to use against trading fees.
Notably, all interactive investor’s plans offer a free regular investing service, that doesn’t charge trading fees for drip-feeding as little as £25 a month into a wide range of funds and popular shares (including the FTSE 350). This means regular monthly investors don’t have to incur further charges beyond the subscription fees. interactive investor also has a Friends and Family service that allows you to gift 2-5 people a free subscription by adding them to your plan.
Charles Stanley Direct v interactive investor – research, tools and features
Both platforms offer market insights and investment ideas and inspiration, written by their in-house experts.
interactive investor provides a greater quantity on a daily basis, including lots of video and podcast content and live online events for customers. Its website also allows customers to tailor the type of news content that they want to see, depending on product interest and level of expertise. interactive investor also reveals how its customers’ investments are performing via its quarterly Private Investor Performance Index and lists popular funds, investment trusts, shares and investment trusts every month.
Both platforms help investors narrow down their investment choices.
Charles Stanley Direct does this through its ‘Preferred List’ of 72 investments, compiled by its experienced collectives research team. Investors can filter the list to find responsible investments. It also offers Starter Portfolios which each assemble a range of 4-5 investments from the Preferred List. Investors can choose between income or growth portfolios and a range of risk levels. Alternatively, investors can access a range of Charles Stanley Funds, ready-made multi-asset investments managed by investment professionals which charge between 0.76% and 1%.
interactive investor has two recommended investment lists for investors in collective investments such as funds, investment trusts and ETFs, selected and managed by its independent research partner Morningstar. They are called the ‘Super 60’ list and the accompanying sustainable list is called the ‘ACE 40’. It also offers five model portfolios, put together using funds from these lists, that investors can replicate within their own investment accounts.
For beginner investors, interactive investor recommends six low-cost ‘Quick-Start’ funds with different risk levels and ongoing charges of 0.22%, or 0.35% for the sustainable options. However, interactive investor doesn’t manage its own funds.
Charles Stanley Direct v interactive investor – user experience
If you treat customer reviews on Trustpilot as an indication of customer service levels, interactive investor is the clear winner.
interactive investor has a TrustScore from consumer website Trustpilot of 4.7 out of 5 (based on 24,000 reviews), while Charles Stanley Direct only scores 2.1 (based on 19 reviews).
On the app store, Charles Stanley Direct’s app has a 4.5 out of 5 rating (based on 331 ratings) v interactive investor’s app rating of 4.4 (based on 9,400 ratings). So not much in it.
Charles Stanley Direct v interactive investor – quickfire advantages & disadvantages
Charles Stanley Direct advantages
- Offers Flexible ISA
- Free 15 minute financial coaching session
- No fee for funds trading
Charles Stanley Direct disadvantages
- Lower Trustpilot score
- Beginner funds range is more expensive
interactive investor advantages
- Flat fee structure good for larger amounts invested
- Higher Trustpilot score
- Free regular investing
- Direct access to international shares
- More content insight and inspiration
interactive investor disadvantages
- No access to coaching
Our conclusion
In theory, interactive investor’s flat fee subscription plans generally work out better value as your investments grow v Charles Stanley’s percentage charging structure. Meanwhile, the superior Trustpilot score indicates better customer service at interactive investor too.
Sophisticated investors might also be attracted to interactive investor’s international shares offering, educational content and insights, plus its championing of shareholder voting.
However, if you specifically want a Flexible Isa, you’ll have to choose Charles Stanley Direct.
Total costs will depend on the investments you wish to buy, plus the number of trades you’ll make. For example, it’s possible that funds investors who intend to make a lot of trades may benefit from Charles Stanley’s free funds trading.
Remember that over many years the compounding of relatively small differences in fees and charges over several decades can amount to life-changing sums. With larger amounts and longer time scales the amount lost will magnify due to the effects of compounding. So try putting various scenarios into Compare and Invest to find out what you’d potentially be charged before making your decision.
