Interactive Investor Vs InvestEngine

Investment platforms can vary greatly, with different investment options, fee structures and styles. Here we put top platforms Interactive Investor vs InvestEngine head to head, to help you choose the platform for you.

When considering investment platforms in the UK, two names that you may have come across regularly will be Interactive Investor and InvestEngine. They each offer something unique for individual investors – a range of features and benefits that will appeal to different investment profiles.

Whether you’re a seasoned investor or just starting out, your choice of trading platform can have a significant impact on your user experience and investment outcomes.

Which is why I’ve taken my slide rule to both, to help you figure out which is best for your investment approach and financial goals as I pit Interactive Investor Vs InvestEngine.

How Do Interactive Investor and InvestEngine Work?

In summarising how these two platforms work, you get your first look at the key differences between them.

Interactive Investor

Interactive Investor offers a straightforward approach to investing with a flat fee structure, which is more likely to appeal to you if you have a larger investment portfolio.

More akin to a classic broker, you choose the assets you wish to invest in, and buy and sell these on its trading platform.

Because Interactive Investor charges a flat fee rather than a percentage of the value of the assets, it’s more economical if you own (or are buying and holding) a more substantially sized portfolio.

If you prefer a more hands-off approach to investing, Interactive Investor also offers a range of ready-made portfolios.

These provide instant diversification across various assets and are professionally managed to fit your investor and risk profile.

You’ll have a choice of account types that include a General Investment Account (GIA), Individual Savings Accounts (ISAs), and Self-Invested personal Pensions (SIPPs), – so, whatever your investment goals, you’ll have an investment wrapper designed to help you achieve them.

InvestEngine

InvestEngine will appeal most to you if you like simplicity on a cost-effective platform.

It focuses on ETFs (Exchange Traded Funds), and you have two options for your investment.

First, you can invest in one of its managed portfolios, at a low fee of 0.25% of fund value.

If you prefer a DIY approach, you can create your own portfolio by investing in its range of ETFs.

With this dual approach, the instant diversification that ETFs provide, and its ease of use, this is a great platform for novices and more experienced investors.

As with Interactive Investor, you can invest via a GIA, ISA, or SIPP to enhance your tax efficiency and meet your financial objectives.

Product & Service Offerings

The commitment of both Interactive Investor and InvestEngine to provide their customers with a range of investment options is evident in the types of financial products and services they offer.

Interactive Investor’s Investment Options

Interactive Investor provides a variety of account types designed to meet different financial goals and tax considerations:

General Investment Account (GIA)

This account offers you the flexibility to invest in a wide range of securities with no annual limits on contributions or withdrawals.

Stocks and Shares ISA

You can invest up to £20,000 per year into ISAs. Offering you a way to grow investments within the fund and when you withdraw money from it, without paying tax on gains or income.

Self-Invested Personal Pension (SIPP)

If you are investing for retirement, you’ll also have the option to open a SIPP, with tax relief on your contributions and on the growth and income within your fund.

Lifetime ISA

Available to open for those aged 18 to 39, helping you to save for retirement or a first home with the advantage of a government bonus. You can only invest a maximum of £4,000 into this type of ISA each tax year.

Junior ISA

Enables tax-free saving for children’s future, with an annual contribution limit set by the government (currently £9,000).

Cash Savings Accounts

If you have cash savings, or want to park your cash for a period before investing, Interactive Investor’s Cash Savings Facility provides a way to hold between £10,000 and £250,000, with competitive interest rates for savings plans between six months and three years.

InvestEngine’s Investment Options

Like Interactive Investor, InvestEngine offers:

• A GIA
• Stocks and shares ISAs
• A SIPP

In addition, you can also open an investment account in a business name. If you own a limited company, this allows you to invest spare cash in your business to help you improve your profits in the longer term, while maintaining fast (and free) access to your funds.

Portfolios, Funds & Other Assets

When you invest – whether in a GIA, ISA, or SIPP – you’ll invest in funds, managed portfolios, of other securities inside your chosen investment vehicle.

This is another key point of difference between the two platforms. You’ll have access to a broader range of assets and ready-made solutions with Interactive Investor, while InvestEngine offers only ETF investment (DIY and ready-made solutions).

Interactive Investor

Through Interactive Investor, you’ll have access to a wide and diverse range of investment assets, which is broad enough to satisfy the needs of most investors, catering to individual risk tolerances and financial goals.

The assets you can invest in include:

Model Portfolios

You can choose from several model portfolios, each designed to align with different investment and risk profiles, from low-cost, low-income to active growth.

Whether you’re a conservative or aggressive investor, these portfolios should help you achieve your financial goals in actively or passively managed funds.

Super 60 and Ace 40 Lists

These lists are designed to take the strain out of investment selection. The Super 60 list is a list of 60 hand-picked funds, investment trusts, and ETFs giving quality investment opportunities across different regions and economic sectors.

The Ace 40 is selected from a list of 200 funds, investment trusts, and ETFs selected for their sustainability.

Quick-Start Funds

Ideal for novice investors, the six Quick-Start Funds offer a low-cost entry according to your investment and risk profile, with funds provided by Vanguard and Columbia Threadneedle.

In addition, you’ll also be able to trade in around 12,000 stocks around the world, as well as ETFs and bonds.

InvestEngine

InvestEngine’s investment options are not as broad as those offered by Interactive Investor, but still deliver plenty of choice for investors:

DIY Portfolios

You can create your own portfolio from a range of up to 600 ETFs. These allow you to invest in a diversified manner across a range of economic sectors, asset types, and geographies.

With no management fees and no platform fees, this is a terrific way to build a low-cost, diversified, self-managed investment portfolio.

Managed Portfolios

InvestEngine also offers 10 managed portfolios, with each positioned to cater for a different level of risk from Growth 1 being the lowest and Growth 10 the highest.

To ensure you invest at the right level of risk, you’ll be asked to complete a questionnaire like you would were you to use a robo-advisor.

Their Apps

In a mobile and app-driven world, the quality and usability of a broker’s app is one of the key considerations. Neither Interactive Investor nor InvestEngine disappoint.

Interactive Investor’s App

This is a great app no matter your investment experience. It offers comprehensive functionality that allows you to easily trade in and manage your investment portfolio.

You’ll have access to the latest financial news and research, which is crucial when making investment decisions. You can set up price alerts, too.

Overall, the Interactive Investor app offers a user-friendly experience on a robust platform that makes investing on the go a breeze.

InvestEngine’s App

InvestEngine’s app mirrors its investment offering – clean, simple, and cost-effective. You’ll benefit from a streamlined app that enable you to manage your investments easily.

It includes all the essential tools you need to manage your investments, plus it includes access to automated investing – you select your investment criteria, and the app manages buying and allocation of your ETF selection.

Together with automated rebalancing, your portfolio should never get out of kilter against your investment profile.

Comparing Fees

Another notable difference between Interactive Investor and InvestEngine is the fee and charging structure. Both platforms are low cost when compared to many of their peers.

Interactive Investor offers a range of subscription plans, with dealing charges on top of this. InvestEngine charges annual fees based on the size of your portfolio and the style of investment.

Interactive Investor

Interactive Investor charges a flat fee – a monthly subscription which does not alter as your investment pot increases in value. On top of this fee, you will pay dealing charges.

GIA and ISA Charges

The lowest-cost Investor Essentials Plan is for portfolio values of less than £50,000.

SIPP Charges

Across all buying and selling of investments within your Interactive Investor accounts, you may also incur other unavoidable charges, such as exchange fees and taxes.

If you invest in funds, applicable fund management fees according on the fund will be charged as a cost levied by the fund manager.

InvestEngine

InvestEngine’s charges depend on how you are investing, and it charges as a percentage of your find value – a platform charge. On top of this, there will be annual charges levied by the ETF fund manager, as well as a market spread:

Because of the difference in charging structures, a direct comparison of costs between Interactive Investor and InvestEngine is difficult – it depends on the value of your portfolio, what type of assets you invest in, and how often you deal.

However, Interactive Investor’s fixed fee structure is likely to make it more cost efficient for larger portfolios. For smaller portfolios, and if you only wish to invest in ETFs on a DIY basis, InvestEngine will be less costly.

Minimum Investment

There is no minimum investment to open an account with Interactive Investor, though regular investments must be at least £25 per month.

To open an account with InvestEngine, you’ll need to make a minimum investment of £100. Regular ‘savings plans’ can be started with as little as £20 per month.

Which Is Best For Beginners?

Both Interactive Investor and InvestEngine could be an excellent choice for beginners, as they both offer managed portfolio options. However, there are caveats.

Interactive Investor’s robust app with a comprehensive range of investment options is ideal if you’re a more active trader who wants various vehicles to invest tax efficiently.

You might find the cost structure and complexity of investment choice more daunting if you are a complete novice with a smaller portfolio.

InvestEngine is great for investors who prefer a straightforward approach using only ETFs to construct their portfolio.

Its low-cost approach is ideal if you are just dipping your toes into the investment pond – though if you have a larger, managed portfolio the costs can soon build up, but are still likely to be lower than many competitors.

Is Your Money Safe?

Both Interactive Investor and InvestEngine maintain the highest security and regulatory compliance and features.

Both are regulated by the Financial Conduct Authority (FCA) and your money is protected under the Financial Services Compensation Scheme (FSCS), meaning that if they face financial difficulties (like bankruptcy), up to £85,000 of your assets are protected.

In addition, both platforms include online security measures like two-factor authentication and encryption to protect your personal data and account security.

How To Get Started

Whichever trading platform you use, it’s easy to open an account and get started. Though the processes are slightly different in terms of choosing how you’d like to invest, both prompt you clearly and will require financial details, photo ID, and of course funding to get started.

Weighing Up The Pros & Cons

Costs, apps, asset range, investment products… how do you decipher what could be information overload? Let’s sum up the pros and cons of each platform.

I appreciate the breadth and depth of asset choice offered on Interactive Investor.

With access to thousands of stocks, bonds, funds, and other securities, you can build a portfolio to meet any investment strategy.

The range of account options mean there’s an option for all investment objectives.

You’ll have access to some fantastic market research and educational material, and the award-winning friendly app is easy to navigate.

On the downside, though the flat-fee structure makes a lot of sense for larger portfolios, if you’re starting off small the effect of this cost on your returns will be magnified.

If you’re focused on simplicity and cost-effectiveness, InvestEngine has you covered. It offers a unique no-fees DIY option as well as highly, competitively-priced managed portfolios. Its whole approach makes investing easier, making it especially attractive for beginners.

This said, its limited choice of investment assets and lack of advanced investment tools on its app could be a disadvantage if you’re looking for more diverse investment options and greater control over your investment strategy.

Tips For Investing

Whether you’re a beginner or a more experienced investor, managing your own investments can be a daunting prospect.

Platforms like Interactive Investor and InvestEngine offer you an array of benefits that can help you, but developing sound investment habits is the key that will set your investment performance apart.

You must be strategic, aligning your investment approach with your financial goals. These tips should help you to be confident with all your investments, whichever investment platform you select:

1. Know Your Investment Goals & Risk Tolerance

Accurately assess your financial goals and risk appetite, so that your investments align with your long-term financial objectives.

2. Use Account Features Strategically

Take advantage of the various account types offered by your chosen platform to align with your financial goals – and maximise tax efficiency through ISAs and SIPPs.

3. Benefit From Low Costs

Leverage Interactive Investor’s flat fee structure if you have a large portfolio to minimise costs. Take advantage of InvestEngine’s no-fee DIY portfolios and low-cost managed portfolios to maximise your investment growth.

4. Start With Managed Portfolios

If you’re new to investing, consider starting with managed portfolios on InvestEngine or the Interactive Investor’s Quick-Start Funds.

5. Experiment & Learn

If you’re interested in a more hands-on approach, experiment with developing and managing your own portfolio of investments. You’ll need to do your research, so make good use of all the tools available on each platform as well as independent research routes.

6. Diversify Your Investments

Whether you opt for a managed portfolio or decide to invest on your own, diversification is key. Investing in ETFs on InvestEngine or Interactive Investor is an effective way to start, but remember to diversify across sectors, geographies, and asset types.

7. Regularly Monitor & Adjust Your Portfolio

Regularly review your portfolio’s performance to ensure it stays aligned with your goals. A monthly check-up can prevent any surprises, and help you adjust to changes in your financial life or market conditions.

8. Embrace Pound-Cost Averaging

Investing regularly smooths out market volatility, and helps you avoid the pitfalls of trying to time the market.

Interactive Investor Vs InvestEngine – The Bottom Line

When deciding between Interactive Investor and InvestEngine, your choice will boil down to a few key decisions.

If you want to invest across a range of investment options including individual stocks, bonds, and funds, Interactive Investor’s platform will be the better choice. Its flat fee structure will also appeal if you hold a larger portfolio.

On the other hand, if you desire a simpler way to invest, with extremely low costs and a high degree of diversification, InvestEngine’s focus on ETFs may be more attractive.

Ultimately, it will be crucial to align your platform selection with your investment style, financial objectives, and the investment method with which you feel most comfortable.