Broker Interactive Investor Bans Long Term Holdings ??

21st Dec '18 by jonesj

30 comments 3715 reads

We're updating the Terms of Service. (extract from e-mail)

"Investments older than six years
If there has been no movement for a period of at least six years on some or all of your investments we may gift a cash amount to a charity of our choice. We may also release any stock where there has been no movement for a period of at least twelve years and gift these to a charity of our choice. We will always make good any valid claims against any released balances."

If I read that correctly ii may now liquidate any stock holdings of more than 12 years & give the money to charity. This beggars belief.

I can barely believe what I read in their e-mail. Can these people be trusted to have custody of our stock? Am I misinterpreting this?

Looks like my business needs to be taken elsewhere. I shall also have to write to the F CA., Sharesoc etc.

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jonesj

21st Dec '18

I fully intend to keep some of my holdings way beyond 12 years. At best I may want to increase or decrease the holding size, but do not want any broker pressuring me.

I have asked ii for an in-specie transfer to another broker, with all exit fees waived.

I have also e-mailed their CEO to effectively request that he investigates how they let this change out of the door. One would like to think that changes to T&Cs would be vetted from every angle.

That is their second major error this year, after completely screwing up the format of the excel statement download.

I also must reiterate that the nominee holding system is potentially insecure in times of economic stress and I would like to see direct holdings at low cost, just like they have in Singapore.

shipoffrogs

The T&Cs don't do the job if they are ambiguous and need explaining in an email, they need to change them.

Rusty2

I think they will not make any money if you are not trading a share, so I can see their point. I had a similar thing with a US broker I had not done anything on my shares for 3 years and they were going to hand them over to the state. No movement I take means no buying or selling, I guess you could just buy or sell a few every 5 years to keep them happy. IG Group (LON:IGG) also make a charge if no activity on your account for a certain time, is it 2 years? I closed my account with them.

LilliputTom

I have a 'buy and hold' account with them which largely includes stocks that I bought in 2008/09. Thanks everyone here for the clarification of what was clearly a very unhelpful original message. I would surely expect any action on 'dormant' shares to be accompanied by a review of the account overall (i.e. I still log into the account regularly and have kept my contact details up to date with them even though I don't trade in this account much). It turns out that was what was intended, but not articulated!

Agreed. The terms and conditions need to be fair and clear.

An e-mail clarification is not enough.

jared007

I'm glad this was raised here - I read the change myself and couldn't believe it. Seems all is well and just *very* poorly worded change to the terms and conditions.

Rather disconcertingly, I have received a very different explanation from ii:

"...Dormant accounts

The notice of a change to our terms and conditions includes details of how
dormant accounts might be treated. Where there has been a period of at least
six years of no account activity (for cash), and at least twelve years (for
investments), and an account has become dormant, such assets may be paid to
charity.

The concept of a ‘dormant account’ is intended to
apply to those customers with whom we have positively lost contact, e.g. there
has been no attempt to log onto an account and mail is being returned
indicating the customer no longer lives at their address. Any attempts to
re-establish contact during the six or twelve year periods will also,
inevitably, have failed.

We would like to clarify that the operation of these terms would
only ever apply in extreme circumstances. These terms would never apply to
customers simply because there was no transactional activity taking place on an
account.

Where contact had been lost – and before any assets were paid to
charity – the firm would always take steps to try and contact such
customers, for example, using tracing agents.

It should also be noted that where assets belonging to a dormant account
have been paid to charity, should the customer ever make a subsequent claim,
interactive investor would always ensure the assets were returned to the
customer.

Please note that this update only refers to the general Terms of
Service and not the SIPP Investment Terms of Service. If you hold a SIPP, these
changes do not apply...."

Silver Moon

22nd Dec '18

I pay my broker (the Share Centre) for its work and in these days of robotic account-keeping. I expect it costs extremely little for it to caretake my accounts therefore it must be making money without my doing deals. Nominee accounts do carry a risk for the investor and brokers need to understand that the confidence of their customer is all-important. I think the Share Centre does this.

pka

My family has ISAs and SIPPs with Alliance Trust Savings (ATS), which was owned by the large Alliance investment trust. Unfortunately Alliance Trust recently announced that it is selling ATS to Interactive Investor. What I've read in this thread about Interactive Investor does not inspire confidence in me, so I might consider moving my family's ISAs and SIPPs to another platform.

Does anyone have any recommendations for a good provider of ISAs and SIPPs, preferably one that charges fixed fees regardless of the portfolio value rather than a percentage of the portfolio value?

sharw

pka - have a look at iWeb - joining fee then no admiin charge for ISAs and for SIPPs a two stage flat fee for value under/over £50K.

sharw - many thanks, I will take a look at iWeb.

skinner66

i also found credit card companies cancel your account if no activity for a while{ i know different from convo but all the same its about money). prob i piss them off as transfer balance to interest free card, and dont use again. they ok making good interest on you when you use but when shoe is on other foot they give 3 months notice use card or we cancel,

23rd Dec '18

I understand ii will be sending out a further e-mail.

However, as the T&Cs contain nothing to state this applies only to dormant accounts, I am requesting them to revise the T&Cs.

Closure of an inactive credit card account is quite different. By definition, we have no assets held with a credit card company. With a stock broker, the majority of our assets may be held with a broker, so it is important that we trust them to have custody of those assets.
In my case, the majority of my assets are with brokers, although in 2008, I made a conscious decision to diversify across several brokers.

timarr

If you have a significant sum in your ISAs and SIPPs I'd be more concerned about the financial stability of the broker than paying out a bit extra in fees. As the debacle at Beaufort Securities has shown, in the event of the broker failing then the adminstrators can cover any shortfall in their expenses from client assets.

"If you have a significant sum in your ISAs and SIPPs I'd be more concerned about the financial stability of the broker than paying out a bit extra in fees."

Absolutely! Does anyone have any information about the financial stability of Interactive Investor? My family's SIPPs and ISAs have been or will shortly be transferred to them from Alliance Trust Savings. I liked the fact that ATS was previously owned by a large investment trust, Alliance Trust, so I was not worried about its financial stability. However, I know nothing about the financial stability of Interactive Investor, so I'm worried by the transfer.

What happened at Beaufort was a disgrace. However, there is an element of being too big to be allowed to fail (HBOS cf Bradford & Bingley back in the financial crisis).

The largest broker is HL with assets under management of £91.6bn reported at 6/18. Second is ii with £20bn projected to rise to £35bn post Alliance Trust merger.

You could also look at parent companies - in the case of iWeb that I mentioned previously it is Lloyds Banking (LON:LLOY) .

Sources: https://www.investmentweek.co.uk/investment-week/news/3037186/hargreaves-lansdown-sees-record-gbp76bn-net-new-business-in-2017-18
https://www.moneyobserver.com/news/uks-second-largest-investment-platform-buys-alliance-trust-savings

Michael Ridyard

pka, see link below explaining how safe are stock broker nominee accounts:
https://the-international-investor.com/investment-faq/stock-broker-account-safety
I fell out with ii in 2011 and moved my accounts, I also transferred my TD Direct account in 2017 once i discovered ii had taken them over.
Its very important to follow the financial health of your broker I use HL and they are easy to keep an eye on as a listed company.
It's quite expensive to move large accounts but HL will offer from time to time up to £500 per account depending on its value.

sharw and Michael Ridyard - many thanks for your advice.

Deegee Eff

26th Dec '18

I do not have an account at ii, but at other brokers I have had shares that although delisted have been showing on my account at zero for many years. What they seem to me to be saying is that in these situations they will give the shares to a charity that specialises in getting some value from delisted shares. For example there are markets in delisted shares eg Britdaq and a small amount be raised . Obviously they should try and check with the owner first thuough!

laurie

31st Dec '18

Thank you for posting this thread. I no longer feel alone in my outrage. (I have had a number of recent irritating difficulties with ii. The back-office staff appears to be of varying quality, with some people extremely efficient and clear, and others ...words fail me.) Allow me to add the response I received when I asked for clarification concerning the email which has caused so much confusion-
'To confirm this would mean no movement on the account whatsoever. So if this stock had no dividends coming in, price change or yourself doing a buy or sell this is when we would look at this and to confirm we would then inform you if we were looking to do this on each specific stock. If you did not wish for us to do so we would not do it.'

Broker Interactive Investor Bans Long Term Holdings ??

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Jonesj

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