Reduced Pension Costs at CMC Invest: A Look at How it Stacks Up Against Competitors (£170 annual savings per employee)
In the ever-evolving world of investment platforms, four contenders stand out: CMC Invest, Freetrade, Interactive Investor, and Prosper. Each offers unique features, fees, and investment options catering to diverse investor needs.
CMC Invest
CMC Invest, a newcomer in the scene, launched in 2022, backed by the well-established CMC Markets, operating since 1989. It provides commission-free trading with access to over 3,000 US stocks, FTSE 100 UK shares, ETFs, and investment trusts. The platform offers three account plans: Core (free monthly), Plus (£10/month), and Premium (£25/month). Higher tiers add features like flexible Stocks & Shares ISA, broader stock availability (mid- and small-cap, mutual funds), multi-currency cash holding (USD, EUR), and SIPP access. All accounts earn 2% interest on uninvested cash, albeit lower than some competitors.
CMC Invest's fee structure is as follows:
- Core plan: £0 monthly fee, no trading fees, 0.5% forex fee on currency conversions.
- Plus plan: £10/month (free first 3 months), added investment choices, ISA option, multi-currency cash.
- Premium plan: £25/month (free first year), includes SIPP.
No transaction fees on trades in all plans, but there is a 0.5% forex fee on foreign currency conversion.
Freetrade
Freetrade, known for its simple app and fractional shares, offers free trades on UK and US stocks. However, it has a limited selection of 22 mutual funds, only available on its most expensive tier. The platform charges £3 for its Plus plan and £9 for its Premium plan, billed annually or £11.99 when paid monthly.
Interactive Investor
Interactive Investor charges £5.99 a month for investments up to £50,000, or £12.99 a month above £50,000. For both an Isa and a Sipp, it costs £9.99 a month up to £75,000 and £21.99 a month above that amount. The platform offers a wide range of UK and international stocks, funds, ETFs, and investment trusts, along with robust research tools.
Prosper
Prosper, primarily a peer-to-peer lending platform, does not offer a Sipp. It focuses on consumer and business lending products rather than equities trading.
In summary, CMC Invest provides commission-free trades with tiered monthly fees granting access to a broad range of stocks, tax wrappers (ISA/SIPP), and some multi-currency features, with a 0.5% FX fee. This contrasts with Freetrade’s free trades and minimal fees but simpler options, Interactive Investor’s flat fees plus trade commissions but deeper market tools, and Prosper’s distinct lending focus rather than equities trading. Investors should consider their portfolio size, investment preferences, and need for tax wrappers when choosing among these platforms.
CMC Invest's new plans make it worth considering alongside other flat-fee platforms, especially for opening or transferring a pension. Cheapest fees may not always be the best choice when choosing an investment platform; consider the type of investor you are, including what you want to invest in and how much support you need. CMC Invest has reduced the cost of its Plus and Premium plans, making its Self-Invested Personal Pension (Sipp) cheaper by nearly £170 a year.
[1] Source: CMC Invest, Freetrade, Interactive Investor, and Prosper websites [3] Source: MoneySavingExpert, InvestorDaily, and The Motley Fool articles on the platforms
- CMC Invest's new plans, such as the reduced cost of Plus and Premium plans, make it worth considering for opening or transferring a personal pension, offering commission-free trading with access to various stocks, tax wrappers, and multi-currency features.
- Freetrade, while offering free trades on UK and US stocks, has a limited selection of mutual funds and charges more for its Plus and Premium plans compared to CMC Invest.
- Interactive Investor charges higher monthly fees than CMC Invest, but offers a wider range of UK and international stocks, funds, ETFs, and investment trusts along with robust research tools.
- Prosper, unlike the others, is primarily a peer-to-peer lending platform and does not offer a SIPP, focusing on consumer and business lending products rather than equities trading.
When choosing an investment platform, investors should consider their portfolio size, investment preferences, and need for tax wrappers, as the cheapest fees may not always be the best choice for their personal finance and business needs.
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