Interactive Investor (II) was launched in 1995, and quickly made inroads into the online trading financial and services stockbroker industry in the UK.
It is known for its relatively low-cost pricing structure and quality service offering – in fact, the pricing is so competitive it is considered a ‘discount broker’. Today, it boasts 7.4 million users per annum, with 40% being referred from friends and family. In June 2017, II advised that it was buying TD Direct Investing. In this Interactive Investor broker comparison, we’ll focus on mobile trading. Interactive Investor (II) offers the following:
- Investment protection
- II/TD Direct Investing desktop trading platform
- II/TD Direct Investing mobile app
- II/TD Direct Investing web trading platform that you can use on a tablet
Is Your Money Safely Held and Protected at II?
One of the first questions you’re bound to have is how your deposits and transfers to II are held. Consequently, this is where we begin this Interactive Investor review. Interactive Investor Limited is a private company which owns and operates a number of different companies. The financial situation looks healthy: the group of companies has no external debt as it is completely equity-funded, and it has assets of £100m.
In the UK, the brand is an execution-only stockbroker, meaning it does not advise clients on which trades to make. It manages over £21bn of assets for 300,000 clients. When you sign legal papers with II, your investments are registered with a custodian, Interactive Investor Nominee Services Limited. Interactive Investor Nominee Services Limited does not:
- operate as a bank
- have any exposure to under-performing assets, including subprime lending, and
- does not lend any of the stock it holds for customers.
This means simply put that your money is held in a trust account, which is untouchable by creditors in the unlikely case of a disastrous event such as II folding. Your funds are separate, and creditors cannot claim them to pay back II debt. II may not use them or trade with them in any way.
How is II Regulated and what Financial Warranties are in Place?
Equally important in this or any broker comparison, is looking at regulations that can safeguard you. As a UK company, II is regulated by the Financial Conduct Authority (FCA). This is a first-tier level of protection as the company also has its own security provisions in place. In addition to this, II also holds the following industry and professional memberships and is regulated by the further member-applicable governance rules:
- A London Stock Exchange member firm – member firm 315
- An HM Revenue & Customs ISA Plan Manager
- Participants in the Financial Services Compensation Scheme
- A Corporate Member of the Chartered Institute of Securities & Investments
- A member of the Wealth Managers Association
- A member of Tax Incentivised Savings Association (TISA).
Should II cease trading, you will be covered by the Financial Services Compensation Scheme (FSCS). You can get up to £50,000 in compensation if it’s found that an investment business is in default and you can’t pursue or succeed with any claims against it. If a bank II uses to deposit funds collapses, you may claim up to 100% of the first £75,000 cumulatively for losses relating to all your deposits with each separately authorised institution (which II engaged for deposits, etc).
The II App – Overview
The TD Direct Investing app is easy to use and lets you handle all your investment needs in one place. The main features of the TD Direct Investing app are as follows:
- Portfolio Summary and Account Funding – get an overview of your accounts and add funds here
- Order List – your Executed, Pending and Cancelled orders at a glance. Close orders that have more than two days to settlement, and cancel limit orders that haven’t been executed
- Quick Quotes – view price charts without logging in, save stocks to your watchlist or place a trade. Use the search function to find UK and International equities, funds, bonds, ETFs and covered warrants. Also obtain prices and place trades
- Trading – search, get prices and trade
- Watchlist – keep an eye on up to ten stocks without logging in. Curate your own watchlist with your ten favourite stocks and monitor them. Check and manage your watchlist on the move without logging into your account
- Markets Overview and Risers and Fallers – stay on top of the latest price developments from around the world
- WhatsTrading – you can sign up for a group lunchtime update of the top buys and sells of customers
There are no advanced features such as a chatbox or notifications or alerts, but you won’t really miss them either.
The TD Banking App – Access and Financial Warranties in Place
In December 2017, II migrated all its clients to the TD web platform. At the moment it is not absolutely clear whether or not all II original clients have also had to migrate to the TD Direct Investing app.
The TD banking app is different and not only is it available on iPhone and Android, but you can download either the smartphone or tablet version as well. It makes sense, depending on your needs, to use this banking app in addition to the trading app so you can easily move funds backwards and forwards, for example. When you’ve opened an account and registered for the app, you’ll be sent a secure link to download the TD Direct Investing app to your smartphone. Once you click on this link, you’ll be able to download it. The app is free, but data and carrier costs will, of course, apply.
The app also comes with financial warranties. Should you lose money due to an unauthorised transaction on the TD Direct Investing app or web platform, you will be reimbursed 100% of your losses. However, you will not be reimbursed in the event that your negligence has caused the loss, so as with any other trading platform, do your research first, check your investments are sound and keep an eye on what your capital is up to.
The TD Direct Investing App – Basic Banking and Trading
The smartphone version of the TD Direct investing app lets you perform the following basic banking functions:
- Check account balances and transaction history
- Send and receive money with Interac e-Transfer®
- Make Canadian and U.S. bill payments
- View Pending Transactions on your credit card account in real time
The tablet version of this app has the same main features. The latest basic banking improvements that have been made to the TD Direct Investing app on smartphone include the following:
- Daily limits for mobile cheque deposits have been increased Touch ID uses your fingerprint biometric to allow you to log in on an eligible device
- If you call TD Canada Trust from the app using a smart phone, you’ll be seamlessly identified
It’s clear there is an emphasis on efficient yet simple trading is behind the trading section on the app. Here are the main functions available to you:
- Trade stocks, ETFs, options, and mutual funds
- Execute advanced multi-leg option strategies
- View real-time holdings, positions, balances, orders, and activities
- Track price volatility and mobility for stocks, ETFs and mutual funds with mobile push notifications
- Customise your watchlists with your favourite stocks so you can keep an eye on them
- Access Canadian and U.S. market data and sector information
A scaled-down version of the app is even available on the Apple watch.
The TD Direct Investing app – A Closer Look at Some Features
The languages of the app are currently English and French. The trading app boasts some wonderful innovations such as:
- Smarter trading, using heat maps, advanced full-screen charts and an intuitive design
- TD for me – helpful tips and content on the go
- Moving and sending money expediently and quickly with pre-filled amounts, and adding recipients straight from your phone with Interac e-Transfer
- Make your TD Credit Card payments in a few simple steps with minimum payment, statement balance and payment balance
- Deposit higher daily amounts and make deposits to your Youth Account, Investment Secured or your Personal Line of Credit account through mobile payment.
Smarter trading heat maps can help you stay on top of your watchlist, certain sectors or certain asset classes. As for pulling up charts, simply position your phone horizontally to get the full-screen chart. You can also customise chart styles and parameters, view trends and identify opportunities. The cheque deposit function lets you take a picture of your cheque, upload it and have it clear in a flash so you can enjoy the funds quickly, with minimal hassle. TD for me brings all the benefits of being a customer to your smartphone. Receive real-time communications, depending on your location. You’ll find out about upcoming TD events, hot properties for sale nearby, access to a TD mobile mortgage specialist, receive pertinent tips when you cross the border, and so on.
WebBroker, The TDDI Internet Platform
This is the platform to which all II users were migrated at the end of 2017, although this experience did not go off without a few glitches. Initially, during the II migration to WebBroker, there was some disruption as clients reported site down time and not being able to log in. The platform includes research, automated notifications, insights and news. You’ll also gain more trading scope with extended market trading and trailing stop orders. What kind of research is available? Several layers of research and educational material are provided. It features research and analyst commentaries with real-time data, pointed and current information, and actionable insights through publications like the TD Daily Bull & Bear Report. Additional education is available in the form of webinars, archived events, podcasts, and video tutorials. You can also attend live webinars and ask questions, weekly webcasts and advanced technical concept training through web curriculum. The web platform provides you with access to extended trading market hours, provides you with a personal economy of scale, and allows you to execute complex orders such as trailing stops, in addition to placing a trade from almost anywhere you’ve navigated in WebBroker. There are also tools available to close or open a trading position at an automated price, although this needs to be set up in advance of its use.
To Wrap It Up
Interactive Investor is a low-cost brokerage that remains popular with the trading ‘mass market’ clientele because it provides an accessible service, a solid platform and some great app and web platform features. Is II the best low-cost broker? It certainly is one of the two largest ones in the UK post the TD merger. After the migration to WebBroker, some clients complained about the manner in which dividends were paid out. Previously, II customers were able to choose whether they wanted their dividends reinvested or paid out to their trading or bank account. Now if you want dividends paid into your bank account, it can only be done with all your holdings. This means that you cannot choose to reinvest dividends from one stock and have dividends from an alternative stock automatically paid into a bank account. If you want income from certain dividends only, these dividends will have to be paid out into the trading accounts, and then manually transferred. Despite this complication, the education and research offered by this broker are robust, and represent both in-house and independent views, while the platforms are solid and dependable. By no means is the TD Direct Investing app a feat of innovative technology that will impress professional traders, but it does contain novel innovations – the heat map being one. Since the merger with TD, fees have become even more simplified, cementing II as a leading affordable stockbroker in its category of low-cost brokerage services.
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