Interactive Investor VS Hargreaves Lansdown

Should you choose Interactive Investor with its flat-fee structure or the UK’s biggest platform, Hargreaves Lansdown?

Hargreaves Lansdown boasts over 1.7 million clients and manages billions of pounds in assets, while Interactive Investor and its 400 000 users are attracting investors with its unique features and pricing structure.

This article will compare those two titans to help you decide which is best. We’ll delve into each platform’s key features, investment options, fees, and user experience to give you a comprehensive overview of their strengths and weaknesses. 

By the end of this article, you’ll better understand which platform suits your investment goals and preferences. So let’s get started and find out which platform reigns supreme in the investment world.

Interactive Investor VS Hargreaves Lansdown: Our verdict

As leaders of the investment platforms industry in the UK, both Interactive Investor and Hargreaves Lansdown are great options for long-term investing.

Both brokers offer similar services, and the differences remain marginal.

While many people complain about the higher prices on Hargreaves Lansdown, this only becomes notable if you invest more than £30,000 and/or do a lot of investment activity.

Choose Interactive Investor if you want the widest possible range of investments and/or if you are investing enough (we suggest upwards of £30k) to make the £9.99 subscription fee worth it. For larger pots, there is definitely a cost-saving here over HL.

(capital risk applies)

Choose Hargreaves Lansdown if you’re looking for a highly reputable broker with market-leading customer service. It is slightly more costly, but it remains a fantastic place to entrust investing over the long term, especially via ISA or SIPP.

It’s more expensive for individual share trades, but if you’re not doing a huge amount, this doesn’t make a lot of difference.

It’s also best for smaller investments against Interactive Investor (less than £30k)

(capital risk applies)

Interactive Investor VS Hargreaves Lansdown – Pros and Cons

Interactive Investor VS Hargreaves Lansdown – Key Differences

Fees

One of the main differences is their pricing structure. 

Interactive Investor offers a simple pricing structure, with a flat fee of £9.99 monthly for their Investor Plan. This fee includes one free monthly trade, with subsequent trades costing £7.99 each. There are no account opening or closing fees or charges for dividend reinvestment or regular investments.

On the other hand, Hargreaves Lansdown has a more complex pricing structure that varies depending on the amount invested and the types of investments made. They charge a platform fee of 0.45% per year on the value of investments up to £250,000, dropping to 0.25% on amounts above this level.

Additional fees exist for buying and selling shares, funds, and other investment products. Depending on the investment type and size, these fees can range from £1.50 to £11.95 per trade.

Our verdict: If you’re looking for a simple pricing structure with a flat fee, Interactive Investor may be a good choice. Hargreaves Lansdown may be a better fit if you have a larger investment portfolio and are interested in additional investment services.

Research and Insights

Interactive Investor and Hargreaves Lansdown have different approaches to education and research.

Interactive Investor offers educational resources for investors of all levels. They provide a comprehensive knowledge base with articles, videos, and webinars on investment strategy, portfolio management, and market analysis. 

They also produce a range of investment courses for beginners and experienced investors, covering investment planning, trading, and tax-efficient investing topics.

On the other hand, Hargreaves Lansdown’s educational resources are considered more extensive. They offer free guides, research reports on individual funds and shares, and educational tools like retirement calculators and portfolio planners. 

You will find articles and videos adult several investing topics on their website, although many might be geared towards promoting their investment products.

Regarding the level of detail and depth of the educational resources, Hargreaves Lansdown has a more complete and detailed approach than Interactive Investor. 

Investment Focus

Interactive Investor is known for offering a wide range of investment options, including shares, funds, investment trusts, ETFs, bonds, and more. They also have a range of socially responsible and sustainable investment options, which may appeal to investors who prioritise environmental, social, and governance (ESG) considerations in their investment decisions.

In contrast, Hargreaves Lansdown focuses more on funds and investment trusts, even though they still provide other investment instruments. They have a reputation for offering a large selection of actively managed funds managed by professional fund managers who aim to outperform the market.

Interactive Investor VS Hargreaves Lansdown – Fees and Commissions

The cost of investing with Interactive Investor or Hargreaves Lansdown will depend on your investment account, the investments you choose, and the frequency of your trades.

Interactive Investor has fixed fees per trade, as Hargreaves Lansdown applies percentage fees over your annual investments. This means the amount you’ll pay with increase drastically when you start investing large sums.

Our Verdict: Interactive Investor tends to be cheaper than Hargreaves Lansdown for larger portfolios, while Hargreaves Lansdown may be more cost-effective for portfolios up to £50 000.

Interactive Investor Fees Structure

Interactive Investor Trading Fees

• Individual Trades Fees – Trades are charged based on your account type. Trades cost £5.99 for Investor Essentials and Investor Plan. If you have a Super Investor Plan, trades will cost you £3.99.

Interactive Investor Non-Trading Fees

• Platform Flat Fee – The particularity of Interactive Investor is that the platform is based on a flat fee which depends on your account type. With this platform, you’ll have access to 3 account types: Investor Essential (£5.99 p/m), Investor (£9.99 p/m) and Super Investor (£19.99 p/m).
• Dividend Reinvestment Fee – If you reinvest your dividends, Interactive Investor will charge you a fee of £99p per share.
• Fund Charges – Interactive Investor charges a small fee on each fund, ETF and investment trust. These will depend on the Ongoing Charge Figure (OCF) and are charged annually.

Hargreaves Lansdown Fees Structure

Hargreaves Lansdown Trading Fees

• Annual Fee – Hargreaves Lansdown’s annual fee is based on the value of your investments. The more you invest, the less it’ll cost you. Investments will cost you 0.45% if you invest less than £250 000, 0.25% up to £1m, 0.10% up to £2m and 0% over £2m.

Hargreaves Lansdown Non-Trading Fees

Fund Charges– Hargreaves Lansdown charges an annual fee depending on your account. You’ll be charged 0.45% for an ISA (capped at £45 a year), 0.25% for a Lifetime ISA (capped at £45 a year) and 0.45% for a SIPP (capped at £200 a year). Fund and Share accounts and Junior ISA have no charge.

Interactive Investor VS Hargreaves Lansdown – Platform and App

Interactive Investor Platform and App

Interactive Investor’s trading platform is user-friendly and intuitive and offers real-time pricing data and analytical tools, including charts, news feeds, and financial data, to help you make informed investment decisions.

One of the standout features of Interactive Investor’s platform is its trading tools. The platform offers a range of order types, including limit orders, stop orders, and market orders, which can be used to automate trading strategies and manage risk. 

The broker also provides in-house features to help you with daily trading, including:

Model Portfolio – a selection of pre-built investment portfolios designed to meet specific investment objectives. The portfolios are managed by Interactive Investor’s team of investment experts, who use their expertise and experience to select a range of investments designed to perform well over the long term.

Super 60 – The Super 60 is a list of investment funds the company has selected to offer investors some of the best opportunities. The list is updated quarterly and is designed to provide multiple options across different investment styles, asset classes, and regions.

Quick Start Funds – Interactive Investor’s Quick Start Funds is a range of investment funds designed to provide a simple, low-cost way to start investing. The funds are managed by BlackRock and are designed to provide a diversified portfolio of assets, including equities, bonds, and property.

The Quick Start Funds comprise five different funds, each with a different level of risk and potential return.

Hargreaves Lansdown Platform and App

One of the main features of the Hargreaves Lansdown trading platform is its research and analysis tools. The platform offers information on various investments, including performance data, news, and market insights. 

It also provides research reports, stock recommendations, and other investment insights to help you easily navigate the market.

The platform also includes tools and calculators designed to make your decisions easier and more informed.

Free Investment Guides – As part of its mission to empower its customers to make informed investment decisions, Hargreaves Lansdown provides a range of educational guides on its website.

The educational guides cover a wide range of topics related to investing, such as stocks and shares, pensions, ISAs, and investment funds. They are designed to help investors understand the basics of each topic and provide more in-depth information for those looking to develop their knowledge further.

The guides are written in a clear and accessible style and are suitable for novice and experienced investors. They include a mix of text, charts, and diagrams, making them easy to understand and follow.

ISA Calculator – This online tool helps you calculate how much you could earn from an ISA (Individual Savings Account) investment.

It is simple to use and can be free on the Hargreaves Lansdown website. It’s a great tool to help you plan your savings and investment strategy and see how much your investments could grow over time.

Our Verdict: Both trading platforms are great options but tend to be directed at different profiles. If you’re looking for a highly customisable experience, we’d advise you to choose Interactive Investor. If, on the other hand, you would like to learn more about trading before getting started, Hargreaves Lansdown would be more suited for you.

Interactive Investor VS Hargreaves Lansdown – Customer Service

Interactive Investor Customer Service

• Interactive Investor provides customer support through email, phone, and live chat, with the live chat feature available during certain hours.
• The platform also offers an extensive online help centre, which includes a range of resources such as tutorials, FAQs, and video guides.

Hargreaves Lansdown Customer Service

• You can contact only get in touch with Hargreaves Lansdown by phone and mail. However, the broker has been known for being responsive and efficient.
• Just like its competitor, Hargreaves Lansdown provides a Help and Support Centre for frequently asked questions.

Overall, both platforms offer quality customer support options, with similar offerings in terms of availability and resources. However, having access to a live chat is always a plus for when you need quick answers to questions you didn’t find in the help centre. 

This is why we would tend to choose Hargreaves Lansdown on this aspect.

Interactive Investor VS Hargreaves Lansdown – Regulation and Security

Here’s a comparison of the regulation and security measures offered by Interactive Investor and Hargreaves Lansdown:

Interactive Investor Regulation and Security

• Interactive Investor is regulated by the UK’s Financial Conduct Authority (FCA).
• The broker guarantees and is part of the Financial Services Conservation Scheme (FSCS), which protects your funds in the unlikely event of InteractiveInvestor going under.
• Interactive Investor uses Two-Factor Authentication and SSL Encryption.
• Your funds are kept in segregated accounts to ensure their safety.

Hargreaves Lansdown Regulation and Security

• Hargreaves Lansdown is also regulated by the UK’s Financial Conduct Authority (FCA).
• The broker also is part of the Financial Services Conservation Scheme.
• As Interactive Investor, Hargreaves Lansdown uses Two-Factor Authentication and SSL Encryption to protect your account.
• Your funds will be kept in segregated accounts as required by the FCA.

Overall, and like most FCA-regulated brokers, Interactive Investor and Hargreaves Lansdown offer great security to protect your funds and data.

We strongly advise going for an FCA-regulated broker to keep peace of mind.

Interactive Investor vs Hargreaves Lansdown Sipp

Both Interactive Investor and Hargreaves Landsdown offer competitive SIPPs where you can invest for your pension.

According to HL’s own calculations, their SIPP charges work out as follows.

if you have a portfolio consisting of £40,000 invested in funds and £20,000 invested in shares with Hargreaves Lansdown’s SIPP, your monthly account charge would be £22.50.

This is calculated based on the 0.45% account charge on the total value of your investments (£60,000 in this case). The charge for funds would be £15, and for shares, it would be £7.50, resulting in a total charge of £22.50 per month

Interactive Investor vs Hargreaves Lansdown Foreign Exchange Fees

1. Interactive Investor (II): Their foreign exchange fees operate on a sliding scale. For amounts up to £25,000, the fee is 1.5%. However, for larger amounts, the fee decreases significantly. For amounts over £600,000, the fee is as low as 0.25%.
2. Hargreaves Lansdown (HL): HL charges a flat fee of 0.25% for foreign exchange transactions for amounts over £20,000. This fee remains consistent regardless of the transaction size.

Currently, HL offers a lower flat fee of 0.25% for foreign exchange transactions over £20,000. On the other hand, II’s fees start at 1.5% but decrease to 0.25% for amounts over £600,000. Therefore, for larger transactions, II’s fees may become more competitive.