Online stockbroker Interactive Investor (ii) has scrapped exit charges and is offering 'cash back' on transfers onto its platform.
Interactive Investor had charged a fee of £10 per holding, capped at £250 for investors leaving the platform.
Chief executive Richard Wilson said the platform had 'quietly waived all exit fees' last year but 'we feel now is the time to remove them permanently'.
From the 5 November until 31 December, ii has also said it will offer ‘cash back’ on exit costs incurred for new and existing customers transferring to its platform, as follows:
|‘Cash back’ rates|
|£100 for £25,000 to £100,000|
|£250 for £100,001 to £250,000|
|£500 for £250,001 to £1,000,000|
|£2,000 for £1,000,001+|
Wilson said: ‘For over 20 years, ii has fought for simple, clear prices so the consumer is free to make the choice that is right for them, without fear of hidden costs or constraints. Exit fees are incompatible with this principle.
‘Talk is cheap, so we hope today’s announcement signals our commitment to stand behind our position.’
Exit fees were cited in City regulator the Financial Conduct Authority's platform market study as one of the most significant barriers to consumers switching platforms.
An FCA survey of 800 non-advised consumers discovered that a quarter (26%) found exit fees difficult or quite difficult to understand, while 28% of investors said these charges stopped them from moving providers.
Interactive Investor, the second largest DIY investor platform behind Hargreaves Lansdown, has been been growing rapidly over recent years after a series of major acquisitions.
This latest tie-up saw ii take on around 100,000 clients, taking its customer base up to 400,000 investors, with assets under administration increasing from £20 billion to £35 billion.
However, the platform’s expansion has not all been plain sailing as earlier this year customers were outraged by 'disappointing' changes to its free research account facility.
The free ‘virtual’ account which lets DIY investors put their own portfolio of investments together without trading them, had issues with user log-ins and limited functionality.
Cash back terms
The ‘cash back’ offer will include a two-week grace period for investors who open their account just before the 5 November start date - so any accounts opened between 22/10/18 and 05/11/18 will be eligible.
However, the offer will only apply to new trading, ISA or self-invested personal pension accounts and exclude Junior ISAs and pension trading accounts.
It will only apply to online transfers and UK residents who have had an account open for a minimum of 12 months before they open the new account.