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£20k for moving your Isa: brokers offer bonuses in battle for customers

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Illo
Illo

Britain’s biggest Isa providers are offering cash bonuses to customers who switch their investments, as stockbrokers battle for customers in the wake of stock market falls.

Most brokers charge investors fees based on the size of their portfolio, but recent drops in the market and fewer trades since the initial pandemic boom have eaten into their revenue. Faced with weaker sales and tough competition, fund shops have launched offers not available last year, ranging from cash prize draws, free shares, gift vouchers and account top-ups when clients switch to their service.

Hargreaves Lansdown, the country’s biggest stockbroker, announced a prize draw for £20,000 in cash for customers that have at least £500 in their Isa between Feb 20 and April 5.

Rival AJ Bell has promised existing customers a £100 gift voucher if they open and fund an Isa, and £150 for a Sipp. Existing AJ Bell clients can also earn a £100 gift voucher for themselves and a friend if they make a recommendation and the referee opens an Isa or Sipp with at least £10,000.

AJ Bell said any customer that transfers an account to it with more than £20,000 invested would earn up to £35 per investment moved, and up to £100 to cover any exit fees, up to an overall limit of £500 per person.

The last time that Hargreaves Lansdown ran a prize draw was in 2020. Last year, AJ Bell’s only Isa promotion was a case of wine if customers opened and funded an account with £10,000.

Another fund shop, Interactive Investor, did not have any special offers last year, but said it would offer 200 chances to win £100 worth of trading fees, in a rolling weekly offer from March 14 until April 10, for customers with a minimum investment of £1,000 in their account.

Meanwhile Freetrade, a trading website that specialises in stocks, tracker funds and investment trusts, is offering shares worth £50, to new customers who transfer or open an Isa and fund it with at least £1,000. Last year, the required size was £5,000.

While brokers shower clients with promises of cash, vouchers and discounts, earlier this year the Financial Conduct Authority, the City watchdog, said it wanted to tighten rules around investment marketing and drew up plans to ban “new joiner” or “refer-a-friend” bonuses. It warned these promotions often led to people investing in assets they did not understand.

Reader Service: Pension vs. ISA? Discover which might be best for your retirement and how to find your old pension to boost your savings.

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