Both firms can help you invest and grow your money and are set up to cater for beginners to more sophisticated investors. interactive investor is an investment platform that allows you to buy, hold and sell a vast range of investments, while Wealthify is a digital wealth manager, sometimes called a robo-adviser because it harnesses technology to select a portfolio of suitable investments for you. Although they have very different fee structures, the product and investment choices vary too, so your choice may not simply come down to the costs of investing.
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 Wealthify?
Wealthify is based in Cardiff, where it launched in 2016, offering investors access to low-cost investment plans through Stocks and Shares ISAs and general investment accounts. The firm has since expanded to offer ethical investments, Junior Stocks and Shares ISAs, and Self-Invested Personal Pensions (Sipps). It employs more than 100 people and manages the investments of 50,000 customers.
To help fund this journey, in 2018 Wealthify became majority-owned by Aviva, one of the UK’s largest financial services institutions. After the founders sold their remaining shares to Aviva, Wealthify is now 100% owned by Aviva.
interactive investor v Wealthify – product on offer
Both firms offer taxable general investment accounts, plus three tax-efficient investment accounts — stocks and shares Individual Savings Accounts (ISA), Junior Individual Savings Accounts (JISA) and Self-Invested Personal Pension (Sipp).
While interactive investor allows you to get started investing with as little as £25 a month. Wealthify allows you to get started investing in an ISA or general account with a minimum £1. This rises to a £50 minimum investment for Sipps, with minimum pension top ups of £50 too.
There are big differences in the investment options available.
With interactive investor you choose investments by yourself from a huge range of thousands of active and passive funds, plus UK and overseas shares, corporate and government bonds, exchange traded funds (ETFs) and investment trusts. interactive investor’s international shares offering is particularly good. Sophisticated investors might like the currency conversion option, plus the access to new shares and stock splits.
The choice may seem overwhelming, but the firm also offers a range of content and guidance tools to help investors who are less confident. For beginner investors, interactive investor recommends six low-cost ‘Quick-Start’ funds with 3 different risk levels and sustainable options included.
interactive investor also 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.
In May 2024 it launched a suite of ISA Managed Portfolios. The ten portfolios have two styles – index and sustainable, and five levels of risk to choose from. But there’s no published performance track record. The new service has been developed in partnership with interactive investor’s owner, abrdn. The managed portfolios are managed by abrdn’s multi-asset team and are mainly pulled together using abrdn funds, alongside funds from a handful of other asset management firms including iShares, M&G and L&G.
By contrast, with Wealthify you choose your investments from a more limited range. Your investments are then managed by a team of portfolio managers behind the scenes, who construct portfolios for you using funds from a range of external providers and then monitor and manage them for you.
There’s also a quick and simple tool that allows you to build a sample portfolio and see your projected value. You can tweak the risk level and see how this affects the type of investments included and the potential outcome. If you decide to go ahead, you’ll be taken through a multiple-choice questionnaire, which is basically Wealthify’s screening process to make sure that investing is suitable for you.
Wealthify offers a choice between 10 investment plans. Each plan contains a portfolio of 15 funds, which hold more than 8000 diverse investments in total, such as stocks, bonds and property.
In the Original investment plans, it mainly uses passive investments such as tracker funds and exchange-traded funds to create portfolios that are diversified but low cost. There are five plans that each have a different risk level, which you need to choose from by yourself.
In the Ethical investment plans, it uses a blend of passive and active funds to let you invest in organisations committed to having a positive impact on society and the environment. Again, there are five plans that each have a different risk level, which you need to choose from by yourself.
All Wealthify’s fund providers are signed up to the Principles of Responsible Investing (PRI). Some funds may exclude companies that profit from harmful activities, whilst others may invest in companies provided they earn no more than 10 per cent of their profits from the activity. So, Wealthify cannot guarantee that its Plans won’t contain some degree of the activities it aims to exclude.
Costs are one of the ways the two firms also differ.
With interactive investor, 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 £25 to £50,000, these would be £59.88 and £71.88 a year, respectively.
Once you go above £50,000 with interactive investor, 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, annual platform custody fees would be either £143.88 or £155.99, respectively.
With interactive investor you can also add a pension to an existing plan for a lower combined fee.
With Wealthify, you pay a management fee of 0.6% levied on the total the value of your investments held on the platform. This would be £60 a year on a portfolio of £10,000 and £600 on a portfolio of £100,000. So for larger amounts, this is considerably more than what you would pay with interactive investor.
On top of these platform or management fees, with both firms you also pay the ongoing fees attached to the funds or portfolios that you choose.
With Wealthify, these average 0.16% for Original plans and 0.7% for Ethical plans. interactive investor’s Quick Start funds for beginners have ongoing charges of 0.22%, or 0.35% for the sustainable options but you can also find plenty of cheaper passive funds on the platform too.
Of course, you may want to hold shares and other listed investments alongside funds, which you can do with interactive investor, but not with Wealthify.
With interactive investor you can hold shares in Sipps as well as ISAs and general accounts. But there are charges related to the costs of buying and selling investments – and these may be different depending on the type of investment that you hold.
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 ii’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 low-cost 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.
It’s difficult to compare investment performance exactly, because it depends which investments you choose. However, both firms show investment track records for specific investments on their websites.
For investors choosing similar average risk level investment options, and in the absence of published track records from ii’s new Managed ISA portfolios, it feels appropriate to compare Wealthify’s Confident Original Portfolio with interactive investor’s Quick Start Funds range, which includes Vanguard’s Lifestrategy 60% equity fund. The two investments are both in the middle of the risk levels on offer and the costs are similar – 0.22% for the interactive investor Vanguard fund and 0.19% for the Wealthify Confident fund.
interactive investor has performance figures for its funds updated on a daily basis on the fund factsheets, compared against other similar funds. However, Wealthify latest published performance data is not up to date – only figures to 31 March 2024 are available, which makes performance comparisons difficult, while there’s no comparison offered with competitors. However, in the year to 31 March 2024, Wealthify Confident Original delivered growth of 8.0%, while interactive investor reported that Vanguard Lifestrategy 60% equity delivered 10.9%, a clear winner.
A key difference in product range is that interactive investor has a standalone cash savings service provided by Flagstone that 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.
Wealthify offers an instant access cash savings account, in partnership with Clearbank, that offers one variable rate and allows deposits from £1.
interactive investor v Wealthify – research, tools and features
Both firms offer market insights and investment education, though interactive investor’s output is more prolific and frequent, particularly the portion relating to investment ideas.
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. The firm also reveals a picture of how its customers’ investments are performing via a quarterly index. It also produces video and podcast content and hosts live events.
Wealthify has a good blog covering a range of economic and financial topics and plenty of guides for beginners. It also has a Future Skills hub to support financial education in schools, plus a fee calculator so you can see the total cost of investing, and a pension calculator to see what your pot could be worth.
interactive investor v Wealthify- user experience
Customer reviews on consumer website Trustpilot give a good idea of overall customer satisfaction.
interactive investor has a TrustScore from consumer website Trustpilot of 4.7 out of 5 (based on more than 24,000 reviews) v Wealthify at 4 out of 5 (based on over 2,000 reviews). Trustpilot states it has no recent records of either firm 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.
interactive investor’s app has a 4.5 out of 5 rating on the app store (based on 14,000 ratings), while the Wealthify app has a 4.4 rating (based on 2,500 ratings).
interactive investor v Wealthify – quickfire advantages & disadvantages
interactive investor advantages
- Flat fee structure good for larger amounts invested
- Wider range of investments including US and European shares
- Better user experience
- Better content and investment ideas
- Cash savings platform service
interactive investor disadvantages
- Charges for trading in funds and shares
Wealthify advantages
- Simple offering of 10 options
- Tool to build sample portfolio
Wealthify disadvantages
- Lower app and customer service ratings
- Only one savings account
- More expensive for large portfolios
Our conclusion
Sophisticated or more confident investors might be attracted to interactive investor’s wider choice of funds, UK and international shares, while the firm’s educations content and guidance — Quick Start Funds and Managed ISA — can help beginners too. Plus, interactive investor’s cash savings platform service make it a more holistic offering than Wealthify’s single cash account offering. However, if you’re lacking investment confidence or a complete beginner, you may find Wealthify’s simple offering and tool to build sample portfolios reassuring.
If you’re still undecided between the firms, a fees comparison may swing your choice in favour of interactive investor, which has a significantly cheaper custody fees for larger amounts (important as your portfolio grows in value), plus the ability to access low-cost funds with possibly better performance.
Over many years the compounding of relatively small differences in fees and charges over several decades can amount to life-changing sums. If you invested £100,000 over 10 years and got an average annual growth of 6% from the investments, with interactive investor’s annual platform custody fees of £143.88 (0.14%), your fund would grow to £176,734. But Wealthify’s 0.6% charge (£600 a year) would reduce the end sum to £169,201. You potentially lose £7,533 to Wealthify’s additional fees.
With larger amounts and longer time scales the amount lost will magnify due to the effects of compounding. Use Compare and Invest to find out what you’d potentially be charged for investing with each of these firms before making your final decision.
