Platform moves to flat-fee pricing

The platform will offer three service plans: Investor (£9.99 per month), Funds Fan (£13.99 per month), and Super Investor (£19.99 per month).

Investors can choose whichever of the plans they want, based on the level of service they require.

The Investor package offers ETF, share and fund trading for £7.99, with one free trade a month, while those paying higher monthly fees will pay lower fees for some of the functions.

The new charges take effect from June 1.

The monthly cost of the Investor plan is higher than under the previous pricing structure by £2 a month, but the dealing cost is lower.

Interactive Investor is presently awaiting regulatory approval for its acquisition of the Alliance Trust Savings platform.

The new pricing structure will apply to Interactive Investor, though if the acquisition is approved by the regulator, there will be an alignment between the pricing.  

Steve Nelson, consulting director at the Lang Cat, said: "Our research shows that there are potentially significant savings to be made should a customer adopt a platform with a fixed fee approach as opposed to uncapped percentage-based charges.

"Of course, this is simply basic arithmetic in action and it will depend on individual circumstances such as trading levels, contributions and investment types but such savings can add up to thousands of pounds over a medium to long term investment.

"There is tonnes of research out there that shows that customers struggle to engage and understand the charges that apply to their investments.

"What we like in particular about the new interactive investor structure is the fact that the customer will face a clear, easy to understand, fixed platform charge per month."

Interactive Investor's service plans from June 1:

david.thorpe@ft.com