True, the ISA bonus was extremely attractive this year, especially for large ISA transfers. It’s why I transferred my ISA to IE. Though the bonuses are less than 1% of the investments, and if a lot of those ISA transfers are cash, they’ll make a fair bit back on the interest from the deposits. I’d be surprised if we see such a generous offer next year, but if we do, it’ll be because they’ve shown it’s a cost effective way to onboard new clients and increase AUM (including cash, which is lucrative at present).
Perhaps of some concern is their reliance on cash interest to fund the platform. They’ve launched at a time that that has provided a decent return, but if we expect inflation to decrease, followed by interest rates in the coming years, revenue will become more expensive to acquire, and they may well need to monetize in other ways. As I said before, I don’t expect that to be via increasing existing fees, but they might encourage more of their clients onto the managed service. Their target clients are unsophisticated investors after all, so it makes sense that their managed service would be more popular than on more advanced platforms.
One premium feature I’d like to see, which no platform offers at present, is a managed drawdown service, whereby you say how much you want to withdraw each month, and they’ll derisk the assets in line with that need and taking into account relative asset values. This would be great for SIPPs, but also anyone drawing down from ISAs or GIAs. This feature would be a reason for me to switch to the managed service. IE, are you listening?