Interactive links with IFA as loss hits £4m

Interactive investor International, the online financial services site, yesterday said it had linked up with the bricks and mortar independent financial advisers Towry Law because of an ongoing lack of enthusiasm among consumers for buying products over the internet.

Interactive investor International, the online financial services site, yesterday said it had linked up with the bricks and mortar independent financial advisers Towry Law because of an ongoing lack of enthusiasm among consumers for buying products over the internet.

The two firms have launched a telephone and face-to-face service for customers who want to ask advice about, for example, what to do about their pension or which unit trust to buy. The service is free to use for Interactive Investor customers, with both companies deriving revenue from commissions from product providers.

The announcement came as Interactive Investor reported that its net loss widened to £4.03m in the three months to 31 December, from £3.12m in the same period a year ago. Interactive shares fell 11 per cent to 24p. The company is trying to transform itself from a financial information-driven site to one where customers primarily shop on the site for products such as individual savings accounts from other companies.

Yesterday's results showed that the strategy has not yet taken off, with revenues from transactions falling 22 per cent to £297,000, compared with the previous quarter. Tomas Carruthers, chief executive of Interactive Investor, signalled that the company is likely to abandon one of its previous core strategies of handling online initial public offerings, as it did for Lastminute.com. The move is part of a drive to cut costs.

Ian McEwen, an analyst at Lehman Brothers, said yesterday's results were "disappointing" and said the cost cutting could involve job losses.