Interactive Investor Services Limited · DRN-6073162

The complaint Mrs B complains about the transparency and application of a higher rate dealing fee Interactive Investor Services Limited (Interactive) applied to a trade she placed. What happened Mrs B has a share dealing account with Interactive. In March 2025 she placed a trade to sell a holding in an Exchange Traded Fund she held. Aware that Interactive charge a higher fee for trades £100,000 or more, Mrs B says she instructed a trade just under this limit. The trade however went through for around £100,035, attracting a higher commission rate of £40, compared to the £3.99 Mrs B was expecting to pay. Feeling that Interactive had inflated the trade to bring it into the higher rate threshold, Mrs B complained to the firm. She said: • Interactive added the fee to her trade value so it could charge her a higher rate. • It was unfair it didn’t take the lower rate fee from her available cash balance, and that by not doing so Interactive forced her artificially into its higher rate. • Interactive didn’t clearly disclose it charges its commission fee on top on the trade and that this caused the higher rate to be charged, unknowingly by her. She says it hid that information behind a drop down message on its platform which is only visible for 15 seconds. • The wording of Interactive’s terms are that it applies the higher rate to a “trade value” of £100,000 or more, as she instructed a “trade value” of just under that amount it wasn’t fair to charge her the higher rate. Interactive responded to her complaint to explain it didn’t think it should be upheld. It explained this was because its fees had been clearly explained and it was fair to apply a higher fee for trades due to the additional checks and administration those trades require. As Mrs B didn’t agree with Interactive’s outcome, she asked our service to look into the matter. One of our Investigators considered her complaint but didn’t think it should be upheld. She thought Interactive had fairly disclosed its fee structure and applied its higher rate fee to the trade based on the order given. She also explained the short quote window, which included the fees due for the trade, wasn’t unusual given how quickly market values change. Mrs B responded disagreeing with the conclusions reached and provided additional submissions that: • It had charged her the lower fee on a similar trade before.

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• Interactive should’ve adjusted her order or managed it differently to keep it under the fee threshold given she asked for £99,999 to be sold. Our Investigator didn’t change her view and as an agreement hadn’t been reached, Mrs B’s complaint was passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, like our Investigator, I’m not persuaded Mrs B’s complaint should be upheld. I’d like to assure Mrs B that I understand her concerns and I can see what she was intending to do and why she expected that to work. But for me to direct Interactive to take action here, I need to be persuaded it fell below its obligations to Mrs B, and that failing caused her detriment. The crux of this matter isn’t about whether it is fair or not for Interactive to charge a higher fee, Mrs B doesn’t dispute this in itself, it is whether Interactive fairly disclosed that Mrs B’s particular trade would attract this charge and whether it applied it fairly. Both parties have provided evidence of how the sell order Mrs B instructed would’ve looked to her – Interactive, screenshots, and from Mrs B, screenshots and a video. I’m satisfied this shows that when instructing a sale, the user needs to select from a Market, Limit, Stop Loss, or Fill or Kill order types. Mrs B’s video demonstrates the “Market” order, which Interactive’s records show being the order type she completed. She would then based on this evidence likely been asked to set a “Quantity”, being an instruction to sell a specific number of shares”, or “Amount”, which says the value in currency to trade. Based on those selections, the settlement currency, period and account are listed, followed by a field titled “Return”. It is this return field that has an additional drop down view which shows the “Value of ETFs” and the “Commission”. In the example Mrs B has provided to illustrate what happened to her, this looks as follows:

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I see Mrs B’s point that in her mind she’s asked the firm to sell enough to provide her with a return on the trade of £99,999 including fees and charges, or alternatively charges taken from her available cash balance. But there’s more to it than that. There are three things happening here, first Interactive are converting the value requested to a specific quantity to sell based on the “Amount” value, it also applies its fees to the trade and lastly the information on this screen is likely only illustrative given quotes are often subject to “slippage”. I’m satisfied from the screenshot and video evidence provided that Interactive set out with sufficient clarity that the “Amount” of shares Mrs B wanted to sell was being converted to a specific quantity based on the return Mrs B wanted to receive from the transaction. There is also the underlying practicality that dealing with a fixed number of shares provides the greatest certainty in executing the transaction. I say that because the “Quantity” field is dynamic, changing as the “Amount” field is changed. In Mrs B’s situation the “Amount” she entered was converted to 6,341 to be sold, which based on the evidence I’ve seen I think it’s likely she would’ve seen. Using the number of shares to direct the sale, rather than the requested return, would in my view be a fair way for Interactive to interpret the instruction, as that value remains a fixed number whereas the market price is moving continuously. I think it’s more likely then that the “Amount” field acts as a tool available to help Mrs B decide how many shares to sell, and uses the amount entered in currency to base the sale quantity, and that it was sufficiently clear about that. The evidence provided also shows that Interactive reflect in the “Return” section the total proceeds of the quoted sale and shows the fees involved. I understand Mrs B objects that this is under a small dropdown but in my view overall that doesn’t make the information Interactive provided unfair or unclear. I say that because it is clear from the upward/downward arrow and the different colouring of the section there is additional key information. It is then readily accessible and provides short clear information about the transaction, in my view enough for Mrs B to reasonably understand that the trade has exceeded £100,000 and attracted the higher fee based on the “Amount” she has instructed. Importantly Mrs B isn’t bound into the trade at this time, she can either accept it, amend it or cancel it. And given the evidence provided I think it’s likely she would’ve seen the same when she carried out the sale in question. In reaching my conclusion I have also considered Mrs B’s comments that Interactive ought to have fit her order under the threshold for the higher fee, the short window of time the full order details is available for, and whether Interactive should’ve used her cash balance rather than adding the fee to the trade. But I’m not persuaded those mean Interactive likely treated her unfairly. When Mrs B instructed Interactive to sell her shares the order was received, fairly in my view, as a “market order”, which Interactive’s definition is, in summary, an order to trade at the best current available price. Given the “Amount” was converted to a “Quantity”, which as I’ve said Interactive displayed at the time of order, Interactive’s instruction was then to go to market to sell exactly 6,341 shares at the best price it could source. It filled the order that it was instructed to, which led to her shares being sold as shown in the contract note for the sale at £15.775953 each, a total of £100,035.32, which is above the threshold for Interactive’s £40 fee. Here given the large numbers involved those additional decimal places make a significant difference to the total value.

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Because the value actually received depends on the value when the market executes the trade at that best available price, by the time the order is requested, transmitted to the market maker and then filled, the price could change in either direction. This affects then both the price received and the level of charges that may apply if that leads to a different fee tier being reached. This price movement is commonly referred to as “slippage” in the industry and Interactive’s terms set out this can happen. This uncertainty in the price is in part likely why Interactive treat the “Amount” as a net figure after fees and any applicable tax. It doesn’t know what those will be until the order completes so it looks to complete the transaction as a net requested return. While I appreciate Mrs B feels 15 seconds is too short a time to review the full details and make a decision to trade on those terms or not, I don’t think that timeframe would be unreasonable here. I say this because it balances the need to provide clear, fair and not misleading information. If Interactive gave too much time, it would likely increase the rate of stale prices caused by slippage and leading to less accurate actual returns from the trade. This is also the only reasonable opportunity Interactive has to disclose the full costs of the trade based on the quote it has, and whether, as it did for Mrs B, disclose whether the higher rate applies. Taking that into account along with the prior disclosures Interactive made to Mrs B that it charges a higher rate for trades executing over £100,000, I’m not persuaded the presentation of this information was unfair or that the fee was improperly applied. Turning to Mrs B’s point about the lot size, given the order instruction type and that Mrs B is trading on an execution-only basis, which means that Interactive will only execute the instructions as received, I’m not persuaded Interactive had any discretion to break the trade into smaller lots as Mrs B has said it ought to have. As I’ve said it would be required to carry out the trade as instructed and I’m satisfied it did so. Lastly I’m not persuaded Interactive treated Mrs B unfairly by it not taking the fee from her cash balance. I say this because I’ve not seen it says it will only take the fee in that way and did, in my view, sufficiently disclose the charges being additional to the trade when Mrs B entered her trade details. I’m also satisfied Mrs B was reasonably aware how Interactive apply its charges given her previous trading history and raising of a similar matter with Interactive before. Overall then, while I understand why Mrs B thought setting a value just under £100,000 would execute at the lower fee level, and to an extent I agree that Interactive could be clearer in the moment the trade is being requested that the “Amount” reflects the expected value net of fees, as I have explained there are additional complexities that risk that not happening as she intended. And on balance having taken everything into account I find myself more persuaded that Interactive presented the information about the total costs of the trade in a sufficiently clear manner, that a higher rate was due for trades executing at £100,000 or more, and it applied that fairly. It follows then in my view Interactive didn’t treat Mrs B unfairly in how it handled her trade. My final decision My final decision is that I don’t uphold Mrs B’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs B to accept or reject my decision before 27 April 2026. Ken Roberts Ombudsman

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