Hargreaves Lansdown "playing hardball"

grey_gym_sock

gadgetmind wrote: »

For those who prefer to avoid high fees funds, there is still no mention of caps (currently £45 for ISA and £200 for SIPP) nor trackers (currently £2pcm per tracker).

if some previous articles are to be believed, then HL are planning to apply the same new charges to tracker funds, instead of the £2 per month.

i've seen no hint of changes to the charges for shares (where the £45 / £200 caps apply). though that doesn't stop them from changing them at the same time (as youinvest have just done for shares held in a SIPP, though not for shares held in an ISA).

gadgetmind wrote: »

Hl add the square root of sweet FA of value regards holding of a tracker or two on their platform, and keeping their web site fed and watered isn't exactly rocket science.

there's really some quite good info here - http://www.hl.co.uk/funds/index-tracker-funds/view-index-tracker-funds - even down to stock-lending policy, etc - though it's tiny compared to the barrage of paper bumpf HL produce about managed funds.

as for costs, of course HL's margins are huge, however you apportion costs against revenue. however, running a platform like theirs is far from cheap. it's only profitable when you have significant market share.

being aware of what you're paying, and moving if necessary to keep your costs down, is the best way to get HL's prices down.

(in case this is biased, i should perhaps mention i still hold some HL shares )

dunstonh

If you dont think its possible then looks USA where cost over .2% are classed as expensive to some and which some even class as outrageous seeking charge as low as 0.07%. Heres hoping. Take a look at https://www.bogleheads.org

it is a common myth that the US is cheaper. However, apart from the obvious economies of scale that exist in the US compared to UK, the differences are not that great. You can get 0.1% index trackers in the UK. (Blackrock for example). The US also has managed funds and the charges can be a lot higher as well as comparable.

unbundling of charges will make the comparisons with countries a lot clearer as often in the past, comparisons have been made with UK on bundled basis vs overseas on unbundled basis without all elements of distribution taken into account.

bowlhead99

The inevitable price changes at HL will now not be announced until the new year - presumably they will look to maximise the length of time they keep the old prices and see what every competitor (that gives its customers more notice of the changes) is going to do, before finalising.

Given the furore from some on the Sippdeal price change thread - where they accompanied their changes with 're-registration away' fee increases by a fiver per line of stock, effective in three months' time - it will be interesting to see whether HL do the same and how much notice they give. I'm not an HL customer but seem to remember someone on here warning that the last round of T&C updates gave them some specific ability to vary things like reregistration fees without a massive amount of notice. I may be misremembering.

Anyway, hot off the press re HL pricing (from their 7am RNS):

Retail Distribution Review ("RDR") pricing structure announcement

Hargreaves Lansdown will also be announcing its RDR pricing structure in early 2014. This announcement was previously scheduled for the end of the calendar year 2013. The regulatory deadline for implementing our new RDR pricing structure is 6 April 2014. Work is progressing well and the extra time will allow us to refine the Wealth 150 review and overall proposition so that we ensure we achieve the best results for our clients.

Ian Gorham, Chief Executive

"We note recent unfounded press speculation about Hargreaves Lansdown's pricing, but at this stage details of our final charges are yet to be confirmed. We are delighted with the results of our tender to fund managers seeking market leading fund charges for our clients. We look forward to announcing the pricing structure in early 2014 and implementing it before the regulatory deadline of 6 April 2014."

grey_gym_sock

"in early 2014", but not in a specific month

i suspect HL's main motive is to minimize the bad publicity that each provider seems to get by announcing before other providers. keeping the old prices might have been a motive when it was a matter of a year or so, but it's less significant for a few months.

gadgetmind

bowlhead99 wrote: »

Hargreaves Lansdown will also be announcing its RDR pricing structure in early 2014.

One might have thought that their "Waitrose" quality might extend to giving information about charges promptly, but they've missed that boat. Now let's see whether they manage to inform people in time, provide sufficient detail in one drop rather than piecemeal, and give those choosing to move elsewhere a fast and reasonably-priced transfer process.

"We note recent unfounded press speculation about Hargreaves Lansdown's pricing, but at this stage details of our final charges are yet to be confirmed.

Details are yet to be confirmed? If what's in the press is indeed speculation (rather than being based on information leaked from HL) has *anything* from HL been seen let alone confirmed?

I don't like word games and would like to know exactly what HL have told the press that they aren't telling customers.

SnowMan

bowlhead99 wrote: »

Given the furore from some on the Sippdeal price change thread - where they accompanied their changes with 're-registration away' fee increases by a fiver per line of stock, effective in three months' time

The main issue for many Youinvest customers is that the existing re-registration exit charge of £20 per stock is not being waived temporarily. So someone already in clean funds being charged explicitly by Youinvest, can be hit through this increase by (say) a quadrupling of platform charges with a mere 30 days notice, and subject to an exit charge (re-registration charge) equal to (say) 3 times their existing annual platform charge to move away. I can't see how that can ever be fair.

it will be interesting to see whether HL do the same and how much notice they give. I'm not an HL customer but seem to remember someone on here warning that the last round of T&C updates gave them some specific ability to vary things like reregistration fees without a massive amount of notice. I may be misremembering.

Were you thinking of this post?

Rollinghome

Sounds as if reading threads like this has given Gorham the collywobbles. Probably now realises that letting Danny Cox out on his own to talk about "Waitrose pricing" wasn't clever news management either.

Describing the press speculation as "unfounded" is somewhat disingenuous and makes him look even more slippery. The reports I saw in the financial press were founded on the analysis by Barclays who in turn based their findings on Hargreaves Lansdown's current margins of around 0.7%. Either they intend to cut their margins, in which case their shareholders should be told, or they will maintain them with the Waitrose-style pricing announced by Danny Cox.

Clearly, they don't have good news that they want to convey to their customers as soon as possible.

westy22

Well, I am waiting no longer to hear bad news so I have today posted my forms to transfer my HL SIPP to Youinvest whilst they have their £500 exit fees refund offer in place.

I don't want to be rushed into a forced, short notice move from HL in 'early 2014' so I've jumped ship early in anticipation that my costs would rise significantly under HL's new pricing.

I doubt that Ian Gorman or Danny Cox will lose any sleep but my SIPP was of a size that put it in the top 5% of accounts held at HL (according to Barclays).

Just got to hope that my in specie transfer goes smoothly and quickly

grey_gym_sock

to be fair, perhaps HL have been misquoted, and it wasn't "Waitrose pricing", but "wait for pricing".

dunstonh

and its not as if they have had a long time to arrange this. After all, the lead in time has only been 5-6 years.

Its not as if the other platforms have moved to the new charging and are cheaper. Oh, wait a second... they have and are.