Hargreaves Lansdown "playing hardball"

Rollinghome

Discussion on FTAdviser here of those very secretive rebates to some platforms that, they claim, even the regulators weren't aware of.

Still so sensitive that when I alluded to them in my first post, that part was deleted, at the request of... Elsewhere on FTAdvisor they quote an asset manager as saying "We will only offer better terms to distributors who can influence the delivery of funds.” i.e. push their products. “Most platforms cannot influence fund flows so will not be offered discounts”.

Interesting that HL now want to compare themselves with Waitrose. With RDR2 making smoke and mirrors pricing more difficult, it looks as if they've been forced to dump the low cost image and go for being reassuringly expensive instead.

Whether that will work for them and for how long, only time wil tell. Saying that there will always be providers that "do not take the same approach to profitability that we do,” may impress their clients less than, they hope, it will impress their shareholders.

A problem for them will be that many of their clients were attracted to them precisely because of their claimed Lidl-like low costs, including those much trumpeted discounts and "bonuses up to 0.5%". Probably without noticing that, in reality, the bonuses averaged around just 0.12% and making HL uncompetitive on price for a long time.

HL are good for the gloss but with the things that matter they too often don't make the grade, as with their cut-off point of 8.00 am for placing fund deals - when deals can be placed with some competitors right up to the valuation point. The sort of "premium service" I want is the one that gives me premium returns but paying them over-bloated fees can only ensure returns are distinctly sub-standard.

pip895

If you are an investor (with Say 300k) with HL using managed funds will you actually be worse off after all this - presumably the charges on the funds will reduce as the platform charges increase? Is it just the clean fund investors that will be hit as they were previously being subsidised?:undecided

pip895

Rollinghome wrote: »

HL are good for the gloss but with the things that matter they too often don't make the grade, as with their cut-off point of 8.00 am for placing fund deals - when deals can be placed with some competitors right up to the valuation point. The sort of "premium service" I want is the one that gives me premium returns but paying them over-bloated fees can only ensure returns are distinctly sub-standard.

Interesting - it is this sort of thing that might persuade me to part company with HL - are there other non price related advantages of other platforms? One thing in HL's favour is the range of funds available - I cant replicate my current holdings on any other platform I have tried.

jimjames

Rollinghome wrote: »

A problem for them will be that many of their clients were attracted to them precisely because of their claimed Lidl-like low costs, including those much trumpeted discounts and "bonuses up to 0.5%". Probably without noticing that, in reality, the bonuses averaged around just 0.12% and making HL uncompetitive on price for a long time.

I think that is exactly it. The world has moved on and left HL behind. I moved my ISA to HL because my previous provider was giving no advice yet charging the full 0.5% advice fee for it. Moving to HL I at least got some of that back with an improved service.

I've now moved most of my funds away from HL to Cavendish where I get the full 0.5% rebate which equates to around £200 pa more in my pocket than with HL. That may change with RDR but in the meantime it is a significant saving.

Rollinghome wrote: »

HL are good for the gloss but with the things that matter they too often don't make the grade,

One positive with HL is the literature they send out. I needed to light our fire tonight and the HL ISA application and leaflets was absolutely perfect for getting it going

gadgetmind

pip895 wrote: »

If you are an investor (with Say 300k) with HL using managed funds

If you are such an investor, then you clear don't give two hoots about fees, so what's new?

Linton

gadgetmind wrote: »

If you are such an investor, then you clear don't give two hoots about fees, so what's new?

A bit harsh in my view. There is a wide gap between not caring about fees and regarding them as your over-riding investment criterion.

pip895

gadgetmind wrote: »

If you are such an investor, then you clear don't give two hoots about fees, so what's new?

Not so - I don't want to get into the managed v passive debate here - but I I'm cost conscious - I also care about reliability & service as well though.

foofi22

I must admit, I don't quite understand the attitude towards active management by some posters.

Yes, everyone is entitled to an opinion, but to say those that use active management don't care about fees is somewhat wrong.

I use a mixture of passive and active funds and I do care about fees in both cases.

I don't wish to take this thread down the route of active versus passive management!

jimjames

foofi22 wrote: »

I must admit, I don't quite understand the attitude towards active management by some posters.

I'm not sure where the supposed attitude to active vs passive comes from as I've not seen it. The comment I read was about the cost of active funds on HL not any mention of passive. If you have £300k of managed funds on HL you could be paying around £800 more per year than an alternative platform. Some people may consider that a worthwhile amount to pay for the service they get - I know my brother in law is less bothered by the cost but likes the way their accounts are operated so hasn't shopped around. Probably the ideal customer for HL.

Personally I would prefer to have that money working for me but with a slightly less functional website - although if HL were to become competitive again I'd look at moving back.

JohnRo

wile wrote: »

Hi all, may I ask a quick question?

I am now seriously thinking of leaving HL, and have a S&S ISA valued at £29k which is currently spread over 17 funds.

As I understand it, under current HL terms and conditions to transfer these as they are to another provider would incur a charge of £25 per fund.

Would it however be permissible under HL (and also ISA) rules to convert my funds into cash with HL, transfer the balance and then re-distribute into funds with my new provider?

Many thanks

That's what I did moving from BI to CS but BI kept me waiting over 5 weeks for the trouble.