Interactive Investor vs Hargreaves Lansdown: what's the difference?

Interactive Investor (ii) and Hargreaves Lansdown (HL) are two of the biggest investment platforms in the UK.

But what exactly are the differences between them, and which one is better for your investing needs?

This guide examines the key distinctions between Interactive Investor and Hargreaves Lansdown to help you decide which platform to choose.

What is the difference between Interactive Investor and Hargreaves Lansdown? 

Interactive Investor and Hargreaves Lansdown are both prominent UK investment platforms that allow you to manage your investments digitally.

However, their approaches differ considerably.

Interactive Investor operates a fixed monthly fee model. It's particularly appealing to investors with larger portfolios, as fees remain constant regardless of the amount invested. 

Hargreaves Lansdown operates on a percentage-based fee model, making it potentially cheaper for smaller portfolios but more expensive as your portfolio grows. 

Interactive Investor is known for its transparent flat-fee structure, ideal for experienced investors comfortable managing their own portfolios.

Hargreaves Lansdown, meanwhile, prides itself on superior customer service, extensive research, and educational resources that benefit newer investors. 

Interactive Investor and Hargreaves Lansdown: how do the fees compare? 

When evaluating fees, it’s essential to consider portfolio size and trading frequency: 

Interactive Investor fees

• Charges a flat monthly fee, ranging from £4.99 to £21.99, depending on the service plan you choose.

• Investor and SIPP plans include 1 free trade per month

Hargreaves Lansdown fees

• Charges an annual fee of 0.45% for portfolios up to £250,000. This fee reduces incrementally for larger portfolios.

• Additionally, HL charges between £5.95 and £11.95 per trade, depending on frequency and trading volume.

Overall Interactive Investor is generally cheaper, especially for trading and fund investments.

Hargreaves Lansdown's fees are higher, particularly for funds, but may be competitive for specific investments like shares within ISAs. 

Is Interactive Investor or Hargreaves Lansdown better? 

Let's evaluate based on three critical factors: 

Range of investments 

Both platforms offer extensive investment choices, including stocks, ETFs, investment trusts, bonds, and funds.

Interactive Investor provides access to around 40,000 UK and global investments.

Hargreaves Lansdown also boasts an extensive range, including access to more than 3,000 funds. 

Verdict: Draw. Both platforms provide extensive investment options. 

Research and guidance 

Hargreaves Lansdown is widely acclaimed for its exceptional market research, investor education, and user-friendly guides and tutorials, making it especially valuable for beginners. 

Interactive Investor also offers solid research tools but is less extensive than HL’s. It caters more toward investors already comfortable navigating financial markets. 

Verdict: Hargreaves Lansdown leads in investor education and research. 

Brand reputation 

Hargreaves Lansdown, established in 1981, is the UK's largest investment platform, known for reliability and excellent customer service.

Interactive Investor, founded in 1995, has rapidly grown due to its competitive pricing structure and transparency. 

Both platforms are regulated by the Financial Conduct Authority (FCA), providing robust security measures for investors. 

Verdict: Slight edge to Hargreaves Lansdown due to longevity and service reputation. 

Can you open accounts with both Interactive Investor and Hargreaves Lansdown? 

Yes, UK investors can open accounts with both Interactive Investor and Hargreaves Lansdown simultaneously.

Many investors do so to benefit from each platform’s strengths, utilising Interactive Investor for cost-effective trading and HL for research and fund investing. 

Which is better for passive, long-term investing? 

Passive investing generally favours low fees and easy management.

For larger, passive portfolios, Interactive Investor’s fixed-fee model can be significantly cheaper over time, preserving more of your long-term returns. 

For smaller passive portfolios, Hargreaves Lansdown could initially be more cost-effective, but fees grow with your investments. 

Interactive Investor is generally more suitable for passive investors with larger portfolios due to its predictable, flat-fee structure. 

How do their investment philosophies differ? 

Interactive Investor promotes a more independent, self-directed investing philosophy. It provides the tools, but the investor makes the strategic decisions. Ideal for confident, experienced investors who know precisely what they want. 

Conversely, Hargreaves Lansdown emphasises guidance and education, actively supporting investors through comprehensive research, market insights, and tailored recommendations. HL suits investors who prefer structured advice and ongoing guidance. 

Get expert financial advice 

Choosing between Interactive Investor and Hargreaves Lansdown ultimately depends on your individual financial goals, investment style, and the size of your portfolio.

Interactive Investor is typically more economical for larger, confident investors, while Hargreaves Lansdown offers comprehensive support ideal for newer or smaller-scale investors. 

Given the complexity of investment planning, consulting a professional financial adviser can significantly enhance your investment decisions, optimising outcomes tailored to your personal financial objectives.

Let Unbiased match you with a qualified financial adviser today.