Interactive Investor launches a managed ISA

Interactive Investor, the online brokerage and D2C platform, now owned by ABDN, is launching a new Managed ISA.

The ii Managed ISA is a new offering from Interactive Investor, that allows customers to hold their investments within a tax-free ISA account managed by Interactive Investors’ experts.

The new product is designed to combine the tax benefits of a Stocks & Shares ISA with professional investment management from Interactive Investor.

Who is the Managed ISA aimed at?

The Managed ISA is designed for investors who want to hold investments in a tax-efficient ISA wrapper, but who don’t have the time, or inclination, to research and select investments themselves.

By using the Managed ISA, investors can let Interactive Investors’ professionals handle the investment decisions.

How does the Managed ISA work?

Getting started with the Interactive Investor Managed ISA involves few simple steps.

Select your risk level by answering some quick questions about your investment goals and risk tolerance.

Based on your inputs, Interactive Investor will recommend a managed portfolio matched to your risk profile.
You will then need to open and fund the account, which can all be done online at ii.

Interactive Investors’ experts will then monitor and adjust the portfolio over time to keep it aligned with your stated investment objectives.

What are the main benefits of the Managed ISA?

The key benefits include:

• Time savings by not having to research/pick investments yourself
• Professional expertise from ii managing your ISA portfolio
• The convenience of a managed solution included in your existing ii subscription
• Ability to view and track your managed investments anytime
• Tax-free growth potential by holding in an ISA account

How much does the IInteractive Investor Managed ISA cost?

For clients that are already on the ii Investor plan, the Managed ISA is included in their current monthly subscription fee of £11.99 per month, which includes one commission-free trade. Additional trades are charged at £3.99 each.

How does the Interactive Investor Managed ISA compare to the competition?

Interactive Investor believes that their flat monthly fee charging structure will save ISA investors money over the long term.

According to calculations on their website, £50,000 held in an ISA with the platform for 30 years, would have grown to almost £1.20 million, assuming a growth rate of 5.0% per annum, in a mixed portfolio of funds and shares.

That’s up to £45,000 more than you would have returned at rivals like Hargreaves Lansdown, AJ Bell, Fidelity, and Barclays Smart Investor, according to the Interactive Investor data.

In terms of ISA fees Hargreaves Lansdown offers a a tiered fee structure based on the value and type of investments held.

Those fees start at 0.45% for sums up to £250,000 invested in funds, falling to 0.1% between £1.0 and £2.0 million, with no charges levied for investment amounts over £2.0 million.

There are no additional fund dealing charges.

Money that’s invested in UK and international shares and ETFs, in a Hargreaves Lansdown ISA, attracts a maximum monthly fee of £3.75 and trading charges start at £11.95 per deal, with volume discounts down to £5.95 applied one month in arrears.

AJ Bell levies a fee of 0.25% of the first £250,000 invested. However, that scales down to zero if you have more than £500,000 in your account.

Share deals, including ETFs, are charged at £5.00 per trade, which falls to £3.50 if you traded 10 times or more in the prior month. Whilst fund trades cost £1.50 a pop.

Wealthify, a hybrid investing platform, backed by Aviva, offers fees that average out around 0.76% per annum.

That includes all dealing and administrative charges, the creation of a personal savings plan, built by their in-house experts, and ongoing adjustments to the portfolio, to keep that plan on track.