These two firms both have long legacies in the investment world, come with lots of free guidance to help investors and have good customer service. They offer trading accounts alongside tax-advantaged savings plans and have a few key differences in terms of product offering. However, when comparing the two, most investors look to the fee structures, which are very different. While Fidelity charges fees for its services based on a percentage of the funds held on its platform, interactive investor has a range of flat fee monthly subscriptions that’s unusual in the platform world.
interactive investor v Fidelity – overview
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.
What is Fidelity?
Fidelity International is a private employee-owned company that operates its UK investment management services from London and has helped clients to save for retirement and other long-term investing objectives for 50 years. Alongside a fund platform it provides mutual funds and pension management. It’s a big enterprise, with 1.5 million UK customers, and a total of over 2.87 million clients around the world, manging total money worth USD $728.6 billion.
interactive investor v Fidelity – 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).
They both offer self-invested personal pensions (SIPPs), stocks and shares individual savings accounts (ISAs), Junior ISAs and trading accounts.
interactive investor offers its accounts through a range of flat-fee subscription plans. Although it used to be better value only for investors with more than £50,000, it has recently introduced fee levels that suit investors with lower amounts. Its Investor Essentials plan (for investors with less than £50,000) costs £4.99 a month and there is also a new beginner level Pension Essentials which charges £5.99 a month for investments up to £50,000. Once you go above those amounts, the Investor Plan is £11.99 a month and the SIPP is £12.99 monthly. All ii’s plans allow you to invest as little as £25 a month using a free regular investing service.
Fidelity charges a service fee of 0.35% of your investments held on the platform, which works out as £350 per year on £100,0000, with no additional charges for holding a SIPP. The service fee drops to 0.2% when your money grows to £250,000, with no charge on investments over £1 million, making the maximum fee £2,000. If you have less than £25,000 in total there will be a flat fee of £90 (£7.50 a month) a year. For exchange-traded instruments held in the taxable option of Fidelity’s Investment Account, there is no service fee. There’s also no fee for investments held in a Junior ISA or Junior SIPP.
Both platforms have additional trading charges when you buy and sell shares, ETFs and investment trusts. However, Fidelity, unlike interactive investor, does not usually charge for buying and selling funds
The product range on both platforms includes funds, UK and overseas shares, corporate and government bonds, exchange traded funds (ETFs) and investment trusts.
Fidelity has negotiated discounts on many funds on its platform. These discounts may be built into the fund’s ongoing charges, so you pay a lower charge than usual. In others, the discount will be a payment that will be reinvested at the end of every quarter into the qualifying funds.
However, interactive investor offers a wider choice, for example, offering 600 investment trusts v 186 on the Fidelity platforms. interactive investor claims to offer the widest choice of international investments among DIY investment platforms, and through its direct access to global markets (which most other platforms don’t offer) it gives access to new shares and stock splits on the first day they are offered. It also has a multi-currency facility in trading accounts and SIPPs means you can receive payments in those currencies, ready to invest again.
interactive investor has a cash savings service provided by Flagstone that is standalone, so not linked to your other ii accounts. This allows you to hold your cash savings in one place and pick the best deal from over 25 UK banks and building societies.
While both platforms allow their customers to vote for free on the shares that they hold, interactive investor has championed this with supporting content and by making shareholder voting the default setting for customers. Fidelity customers have to opt into its shareholder rights service.
interactive investor v Fidelity – research, tools and features
Both platforms offer daily market insights and investment ideas and inspiration, written by their in-house experts. They produce video and podcast content and host live events.
interactive investor’s website 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 a picture of how its customers’ investments are performing via its quarterly Private Investor Performance Index.
Both platforms offer guidance to help investors narrow down their investment choices.
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 per cent, or 0.35 per cent for the sustainable options.
Fidleity’s recommended list is called the Select 50 and features active and passive funds, investment trusts and exchange-traded funds (ETFs). Fidelity partners with Fundhouse, an independent fund research company, to add independence and enhance the selection process.
Fidelity also has a Navigator tool that assists you in making your own investment choice based on features that are important to you and your appetite for risk, presenting a Fidelity-branded and in-house managed multi-asset fund that correspond with your inputs.
interactive investor v Fidelity – user experience
Fidelity has a TrustScore from consumer website Trustpilot of 4.1 (based on 4,421 reviews) v interactive investor at 4.7 per cent (based on 23,297 reviews). But while Fidelity asks its customers for reviews, Trustpilot states it has no recent records of interactive investor asking their customers to review them. Overall, businesses that regularly invite their customers to write reviews tend to have a higher TrustScore than businesses that don’t. This indicates better service overall from interactive investor.
However, Fidelity’s app has a 4.5 rating on the app store (based on 15,200 ratings), while interactive investor’s app has a marginally lower rating of 4.4 (based on 9,300 ratings).
interactive investor v Fidelity – quickfire advantages & disadvantages
interactive investor advantages
- Trustpilot score is higher, indicating better customer service.
- Recommended lists and model portfolios include sustainable options.
- Wider investment choice.
- Good for shareholder voting.
interactive investor disadvantages
- Model portfolios fiddly to follow.
- Slightly lower app rating.
Fidelity advantages
- Navigator tool to help investors who don’t know how to choose.
- Discounts on some funds.
Fidelity disadvantages
- No cash savings service.
- Smaller range of investments.
Our conclusion
If you’re looking specifically for a standalone Junior SIPP or Junior ISA, or just to hold ETFs in a taxable trading account, this might lead you to Fidelity. interactive investor’s flat fees generally work out better for investors with larger amounts and its starter ‘Essentials products’ are also great value for beginners. Meanwhile sophisticated investors who want a wide investment choice and supporting content, may find interactive investor has the edge. Your best option is to use Compare and Invest to find out what you’d potentially be charged for your type of investing style (products and tax-wrappers held, plus trading frequency). But don’t just focus on the amount saved over one year as the compounding of relatively small differences in fees and charges over several decades can amount to life-changing sums.
