Interactive Investor is sold to Abrdn for £1.5bn: DIY investing platform with 400,000 customers is snapped up by fund giant
DIY investing platform Interactive Investor will be bought by British fund managament giant Abrdn in a deal worth £1.49billion, both firms have confirmed.
Interactive Investor, which has 400,000 customers and is widely considered the biggest challenger to DIY investing leader Hargreaves Lansdown, will operate as a standalone business and independent brand within Abrdn.
Following weeks of speculation of a deal, the board of each firm said Abrdn would purchase 100 per cent of II’s share capital, including those owned by its majority shareholder JC Flowers.
After weeks of speculation, confirmation of the deal has finally arrived
Chief executive Richard Wilson will remain at the helm of II, after the move that puts an end to long-standing plans to list the platform on the stock market.
The platform hailed the deal as driving its next phase of growth, with support from the ‘strength and depth of Abrdn’s advice, research and wealth management capabilities’.
Customers are likely to see little immediate change in Interactive Investor’s offering but DIY investing experts had questioned whether a deal would see Abrdn’s funds and trusts brought to the fore.
It marks a significant move for Abrdn under CEO Stephen Bird’s tenure, providing the £532billion asset manager distribution possibilities to II’s 400,000 customers, who collectively invest £55billion on the platform.
Established investing platforms such as Interactive Investor, Hargreaves Lansdown, AJ Bell and Fidelity face competition amongst themselves and also a strong challenge from roboadvisers, Vanguard and up-and-coming investment apps offering fee-free share dealing, such as Freetrade and Trading 212.
Wilson said: ‘We will have access to Abrdn’s additional capabilities across research, advice and wealth management services, and we will benefit from being part of one of Europe’s largest investment and wealth management firms, with a vision and values closely aligned to our own.
‘Our management will remain the same, and the same extraordinary team will continually develop our service and technology, while maintaining our subscription pricing, our whole of market choice and the same campaigning spirit and editorial independence.’
Abrdn explained that its strategic focus on financial planning and discretionary investment management will be ‘transformed’ by combining with the high-tech model of II.
It added that the direct investing market has grown at an annual rate of around 15 per cent and is ‘expected to continue growing at a similar rate in the future driven by accelerating demographic and structural market trends’.
Abrdn shares have performed poorly since summer, slipping back a high of nearly 300p
The deal, which is subject to shareholder and regulatory approval, is expected to complete in the second quarter of 2022.
Abrdn shares are currently down 1.8 per cent to 234.8p.
CEO of Abrdn, Bird said: ‘This is a unique opportunity and a transformative step in delivering our growth strategy. interactive investor is the UK’s number one subscription-based investing platform with a powerful reputation as a consumer champion.
‘Abrdn’s scale, resources and shared vision will enable interactive investor to grow confidently and expand its leadership position in the UK’s attractive savings and wealth market.’
Compare the best DIY investing platforms and stocks & shares Isa
Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.
When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming.
Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts.
When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.
To help you compare investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you.
We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.
|Admin charge||Charges notes||Fund dealing||Standard share, trust, ETF dealing||Regular investing||Dividend reinvestment|
|AJ Bell YouInvest||0.25%||Max £3.50 per month for shares, trusts, ETFs.||£1.50||£9.95||£1.50||1% (Min £1.50, max £9.95)||More details|
|Charles Stanley Direct||0.35%||No platform fee on shares if a trade in that month and annual max of £240||Free||£11.50||n/a||n/a||More details|
|Fidelity||0.35% on funds||£45 fee up to £7,500. Max £45 per year for shares, trusts, ETFs||Free||£10||Free funds £1.50 shares, trusts ETFs||£1.50||More details|
|Hargreaves Lansdown||0.45%||Capped at £45 for shares, trusts, ETFs||Free||£11.95||£1.50||1% (£1 min, £10 max)||More details|
|Interactive Investor||£119.88 as £9.99 per month||£7.99 per month back in trading credit||£7.99||£7.99||Free||£0.99||More details|
|iWeb||£100 one-off||£5||£5||n/a||2%, max £5||More details|
|Freetrade||Free for standard account £3 month for Isa||Freetrade Plus with more investments is £9.99/month inc. Isa fee||No funds||Free||n/a||n/a||More details|
Only Vanguard funds
|Free||Free only Vanguard ETFs||Free||n/a||More details|
|(Source: ThisisMoney.co.uk July 2021. Admin charges quoted annually, may be monthly or quarterly)