A detailed survey of 218 online investors undertaken by Boring Money in January 2017 provides new insights into what existing customers really think about their investment services.
The research is particularly timely, given the emergence of a new breed of solution, the so-called 'Robo adviser' (such as Nutmeg and MoneyFarm), which collectively has a tiny overall market share of just 0.5 per cent but some big plans and even bigger shareholders.
These newer challengers are hurting the bottom-line of established providers, as pricing naturally comes into the firing line.
As technology continues to become simultaneously more powerful and cheaper, investing continues to become ever more accessible and competition amongst the online platforms has already driven down the cost of investing for the man on the street.
However, it's not just about price. Service varies dramatically across the board, and for many, it's a trade-off between spending hours on hold listening to Vivaldi, or having your queries or trades dealt with quickly, safely and efficiently.
Here's what investors told us.
COST AND VALUE FOR MONEY
Investors cite cost and value for money as the primary driver when selecting their provider of choice, with platform websites and customer service having a secondary role.
Cost is also the element that customers would most like to see their platforms improve upon, and the primary reason why 17 per cent of investors are currently considering switching provider.
'Low quarterly flat-rate fee is ideal for my wife and it's lots cheaper than competitors with a fee based on a percentage of the account's value' - Male, 55-64, Interactive Investor
It is our experience that flat-fee providers Interactive Investor and Alliance Trust Savings are cheapest for £100,000 plus Isa and investment accounts, whilst percentage fee-based Charles Stanley and Fidelity are competitive for lower-sized accounts.
However, cost isn't everything, especially when it comes to the market leader. Hargreaves Lansdown enjoys a whopping 38 per cent market share and, for its customers, cost only encouraged one in four to open their account, with customer service and the website much stronger drivers for selection.
Because Hargreaves is so dominant (the next largest player Barclays Stockbrokers has a 9 per cent market share), we split it out for single analysis from the market average, as the results are telling.
Our experience correlates with this - the service from Hargreaves Lansdown is slick and efficient. I even managed to get through on the phone the day of the Brexit vote last year.
When we asked investors what it is they like most about their provider, however, they are more likely to value the platform's ease of use than either cost or customer service.
'The website is gradually becoming more helpful and interactive' - Male, 55-64, Hargreaves Lansdown
'Easily accessible website to view account and make transactions' - Male, 35-44, Fidelity
'Whenever I have phoned them for advice I have had excellent service' - Female, 45-54, Barclays Stockbrokers
As a result, there tends to be a stronger correlation between overall satisfaction with experience offered by the provider website than with its judged value for money.
MOBILE APP SERVICE
If you like keeping up to speed with markets and want your investments available with a single tap, then I like the Interactive Investor app. It's clean, easy to upload and get going, and clearly shows your account total, overall performance and all component parts.
They've obviously let some trendy designers loose on it and it's good-looking, with nice font and a purposeful lack of capital letters which must have made the traditionalists twitch. And there is loads of market news and stock data.
Building any tech service from scratch is typically easier than re-engineering what you already have. This new-ish app does show the website up in comparative terms to be a lot less user-friendly and in need of a makeover.
And for us long-term investors with funds, I'd question the need to show one-day performance which encourages all the wrong sorts of behaviour. But that's being picky.
From now on I won't access my account online - I'll use the app instead. Buying, topping up and selling existing holdings looks easy too. A good addition to the overall service.
OVERALL SCORES ACROSS THE BOARD
The table below (click to enlarge) shares investors' overall scores for those services receiving the highest numbers of reviews.
Finally, how do respondents stack up compared to other online investors? Activity is surprisingly frequent. 88 per cent check one of their investment accounts at least on a monthly basis and 58 per cent check on a weekly or even daily basis.
Further, not only are investors engaged with their providers but they are also interested in what others have to offer - 36 per cent hold an account with more than one online investment provider, while 17 per cent are considering a move this year, citing charges and fees as the main driver.
If you're a woman, you're in a minority. Our broader research with more than 2,000 UK adults in December 2016 tells us that 20 per cent of men have a stocks & shares Isa compared to just 10 per cent of women. Dads - give your daughter an Isa for her birthday!
Many providers in this survey came in for criticism from their customers for lacking a robust, high-quality mobile app to support trading and account management.
Given mobile's prominence in banking and pretty much every other aspect of consumers' lives, if providers are to try justify higher prices for a better user experience, mobile is a nut that providers would be wise to crack sooner rather than later.
On average we know that between 7 and 15 per cent of online platform trades are put through a mobile device today. As that increases, we suspect cyber-security will grow in importance when it comes to where you put your money. As always with investing, peace of mind comes with an associated price tag.
- 88 per cent of online investors check one of their accounts at least monthly
- 73 per cent of online investors invest via a Stocks and Shares Isa account
- 36 per cent of online investors have investing accounts with multiple platforms
- 17 per cent of online investors are considering switching platforms
- 45 per cent of online investors said 'cost' was the reason they chose their online platform
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