Hargreaves Lansdown "playing hardball"

peterg1965

It's possibly not untypical, but I hold £143,000 of investments with HL in a SIPP, ISA and fund account, and I do not really have any idea how much this is costing me or how the charges are structured. All I do know is how much trading charges are for shares and that there is generally no upfront cost when buying funds.

Maybe I need to do some research.

hyposmurf

HL said at the end of November they would be announcing changes shortly before the end of the year.Understand it's a major change for them.I'm sitting in limbo at the moment awaiting their new charges, looking to transfer my pension or their charges aren't worth it move that and my current funds with them elsewhere.

TCA

peterg1965 wrote: »

I hold £143,000 of investments with HL in a SIPP, ISA and fund account, and I do not really have any idea how much this is costing me or how the charges are structured. Maybe I need to do some research.

http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates

There you go. You'd have been as quick checking their website as writing your post.

It'll all change soon enough, so then's the time to check. Keep your eye on this thread for updates, although I suspect they'd contact you anyway.

peterg1965

TCA wrote: »

http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates

There you go. You'd have been as quick checking their website as writing your post.

It'll all change soon enough, so then's the time to check. Keep your eye on this thread for updates, although I suspect they'd contact you anyway.

I did go on the site and look at the charges this morning, not sure how they compare with other platform providers. The monthly charge for funds (£1 or £2 per fund) was what I was not really clear about - I now am! I have notice they have changed the website recently to suggest cash holdings in each account, presumably making it easier for them to take their charges every month.

I will be interested in their new charging structure when they announce it, not that it will make me move providers unless there is a huge difference in costs.

Porcupine

I note that H-L now admit to their cut when you go to switch (or buy?) funds. There's a Commission Information link underneath each line of stock you're proposing to buy:

Hargreaves_Lansdown wrote:

HL currently receives renewal commission of 1.025% per annum, and pays clients a loyalty bonus of 0.250% per annum

That's a way to find out what they're getting without actually buying a fund.

ffacoffipawb

Porcupine wrote: »

I note that H-L now admit to their cut when you go to switch (or buy?) funds. There's a Commission Information link underneath each line of stock you're proposing to buy:



That's a way to find out what they're getting without actually buying a fund.

The commission is also mentioned on the contract note.

jimjames

WatsonNimrod wrote: »

No, but I had to ring them about something else and the very helpful person said that they had been told an announcement would be made by the end of Jan.

Not sure if that confirms what they have already intimated.

They don't have much choice with timing now.

This has to be in place for 1st April so if they haven't announced by end of Jan they won't be giving 2 months notice of the changes.

I guess they could announce something, realise from reaction it is a mistake and then redo it but that would be pretty embarrassing for them.

Rollinghome

peterg1965 wrote: »

It's possibly not untypical, but I hold £143,000 of investments with HL in a SIPP, ISA and fund account, and I do not really have any idea how much this is costing me or how the charges are structured. All I do know is how much trading charges are for shares and that there is generally no upfront cost when buying funds.

Maybe I need to do some research.

You're sure to be very typical simply because it's been so hard to find out how much outfits like HL have been receiving from your investments by way of commissions and undisclosed arrangements. Most funds are available in various "classes" and HL tends to offer the highest cost versions that pays them most.

Their average seems to be around 0.7% after payment of "loyalty bonuses" but in some cases will be 1.00% or more.

After RDR2 comes into force in April it should be much easier for investors to spot when they're being ripped off. HL will be compelled to offer funds clean of backhanders though they'll still be able to receive payments for marketing. They'll be able to charge whatever they like but will have to tell you.

They originally said they'd announce their new fees by the end of the summer, then by October, then by November. Now they've almost hit the buffers and, as Jim has said, will have no choice but to fess up by the end of the month if they're to give 2 months notice. The fact that they've delayed as long as possible seems to suggest they've realised they'll have a problem when it's clear to clients how much they're paying.

If they try to keep their margin at 0.7% a lot of clients won't be impressed once they realise they can pay 0.25% or less elsewhere. If they tier charges they'll hit small investors and if they don't, they'll lose more profitable bigger investors. If they decide to cut their margins they'll scare shareholders. One thing they could be considering is a spot of confusion marketing with a lower headline rate and lots of extra charges to claw it back.

When HL's Danny Cox announced that they'll have "Waitrose style" pricing he missed the point of why people shop at Waitrose. HL won't be offering extra crusty bread or especially nice deserts. The products they offer will be no better quality than can be had elsewhere, except that HL will be charging possibly three times as much to supply them.

The whole point of investing is to maximise returns, not to line the pockets of over-priced intermediaries who add no value.

guitarman001

Glen_Clark wrote: »

Why not just tell HL where to put their Commission 150 funds?
I pay 0.1% on Vanguard ETFs with X-O.

Oh? I'm paying £2 a month for any Vanguard fund I hold...

grey_gym_sock

Rollinghome wrote: »

When HL's Danny Cox announced that they'll have "Waitrose style" pricing he missed the point of why people shop at Waitrose. HL won't be offering extra crusty bread or especially nice deserts.

well, if c. 0.25% reductions on the AMC of some funds are an especially nice dessert, then apparently they will.

i think HL's last results showed their margin on funds (net of loyalty bonus) as c. 0.6% (it may have fallen a little). my guess is that the new pricing will aim to give up a tiny bit more margin. if you then throw in lower AMCs on some funds, they might look a similar cost to other platforms (only if you use those funds).

though doubtless other platforms will then be asking why they don't have the same lower AMCs - if they don't - some may get them at the same time, but i doubt that all will.

you could certainly call this confusion marketing.

but then it may eventually help to drive down fund management charges.