Interactive Investor to offer ‘friends and family’ pricing

Investors can offer accounts to friends and family for just £ 1 a month by promoting the UK’s second largest personal investment platform to win the loyalty of the next generation of savers.

According to Interactive Investor, for a flat rate of £ 5 per month, clients can offer up to five accounts to “friends and family”, allowing new employees to buy stocks and funds and open tax-protected investment tools. can do.

This move occurs as the wealth and investment industry prepares for the enormous transfer of wealth from baby boomers born before the 1960s to millennials born in the 1980s and 1990s. According to Wealth Manager Brooks McDonald, £ 327 billion will be available in the UK over the next decade.

The investment platform is facing competition from youth-friendly investment and trading start-ups as it seeks to recruit millennial and Generation Z clients. Cryptocurrency..

Unlike rivals The Hague Loves Landsdown and AJ Bell, Interactive Investor CEO Richard Wilson, who charges a flat rate rather than a percentage of the client’s assets, said the “Friends and Family” plan. The broker’s service is “a much wider audience”.

“Fixed rates aren’t very suitable for low investments (percentage rates are more competitive), at least in the early stages. Launching our friends and family solves this problem. I will do it, “he said.

Broker negotiating with Sell ​​to Abbrdn for around £ 1.5 billionLaunched what it is called in 2019 “Netflix-like” subscription pricing model It has 3 layers of service. With approximately £ 55 billion for retail clients, the company is the UK’s second largest investment platform.

Just as parents share their video streaming accounts with their families, Interactive Investors now wants to involve their adult children and other young investors.

Word-of-mouth plays an important role in driving the growth of the investment business. Investment businesses often spend a lot of money on persuading new clients to trust their assets. For example, Freetrade, a low-cost UK stock trading service, distributes free stock to clients who refer friends.

Family-friendly services are more common among wealth managers who manage the money of the entire clan and advise clients to pass on their wealth to the next generation.

Quilter, a wealth manager who provides investments to clients through financial advisors, launched “Family Link” in 2020. By pooling the portfolio, families can access higher tiers and thus benefit from lower tiers under a tiered pricing structure. Currently, about half of our customers use this feature.

Netwealth, an online wealth manager, also allows clients to work with friends and family to take advantage of low percentage fees based on the total investment value. The company has reduced the minimum investment for members of these linked accounts “Network” from £ 50,000 to £ 5,000, making it easier for young investors to access.

Almost half of the new accounts that Interactive Investor distributed during the one-year friend and family planning pilot were under 35, compared to an average age of 57 for 400,000 clients. Nearly 70% of new subscribers were female, but about 30% of existing customers.

Customers with friends and family accounts can invest up to £ 30,000. After that, you will have to pay the standard Interactive Investor fee.

Interactive Investor to offer ‘friends and family’ pricing Source link Interactive Investor to offer ‘friends and family’ pricing

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