Online stockbroker interactive investor, Money Observer’s parent company, has agreed to buy Alliance Trust Savings.
Online stockbroker interactive investor, Money Observer's parent company, has agreed to buy Alliance Trust Savings for £40 million.
The move to buy Alliance Trust Savings from Alliance Trust PLC will bring together two of the UK’s largest fixed priced investment platforms in the UK.
Commenting on the acquisition, interactive investor CEO Richard Wilson notes: “This is another important step in our ambition to build the UK’s best investment platform. The acquisition adds significant scale to ii and reinforces our ability to deliver excellent choice, value and service to all our customers.”
Interactive investor is the second-largest investment platform in the UK, following its acquisition of TD Directive Investing at the end of last year. It currently has a total of £20 billion asset under administration (AUM) and 300,000 customers.
That number is set to increase with its latest acquisition, with total assets growing to £35 billion. In addition, customer numbers will increase to 400,000.
As well as increasing the scale of the company, the purchase of Alliance Trust Savings will increase interactive investor’s ability to invest in new technology.
Commenting on the sale, Lord Smith of Kelvin, chairman of Alliance Trust, says: “The two businesses are highly complementary and Alliance Trust Savings customers, many of whom are Alliance Trust shareholders, will benefit from interactive investor’s similar flat-fee structure, as well as its increased scale and focus.”
The fixed fee structure suits larger portfolios, those in excess of £50,000, due to the fact that the broker charge remains the same even as the investment pot grows. In contrast, under a percentage-based fee model the amount paid by customers increases as the portfolio rises in value.
Research for Money Observer from the lang cat, a consultancy, shows the impact of the different fee structures for various pot sizes.
Interactive investor’s purchase of Alliance Trust Savings is subject to regulatory approval from the Prudential Regulation Authority and the Financial Conduct Authority.