Hargreaves Lansdown "playing hardball"

dunstonh

1) Remove the tracker platform charge or at least cap it in the same way the 0.5% share charge is done.

They will have to as they shouldnt be discriminating against investment type. So, the platform charge should be the same whether managed funds or index trackers are used.

2) 0.25% platform fee covered by the platform element of the annual charge

Platform charges are now at or around that level. However, that is typically on platforms where an intermediary exists to deal with applications, administration etc.

3) Full rebate of the 0.5% commission fee

There is no 0.5% any more and when they move legacy assets to the new charging basis, the 0.50% should be rebated in full.

Rollinghome

jimjames wrote: »

That's shocking. I was trying to work out what was deleted from your post but it isn't obvious and I don't recall reading anything that could be considered defamatory.

I'm just bemused. I don't recall any other major company company taking such action even in reponse to the "xxx bank stole my money" style posts we frequently see after someone has been the victim of some or other admin error. Such sensitivity to comments are more expected from small outfits selling dodgy alternative investments.

I'd find it hard to believe that any sensible person would think I was suggesting, or would accept, that Hargreaves Lansdown were in receipt of "illicit" payments from fund managers - presumably without the FCA being aware. All that seems clear is that we don't know the specifics of their commission arrangements because as stated in the MoneyMarketing article , they refuse to disclose them.

It's one thing "playing hardball" with fund managers but doesn't look so good interfering with comments by respected commentators such as Justin Modray or posts on messageboards. It suggests that Hargreaves Lansdown's public relations skills may need some attention.

A lot of the negativity towards HL seems to arise from their heavy handed advertising that often, such as in the way the Fidelity China Special Sits IT was marketed, seems highly cynical and liable to be untrusted. They also seem to have caused a lot of irritation by keeping their clients in the dark for so long over the new fees they intend to charge. Big companies can't afford not to be trusted.

Rollinghome

dunstonh wrote: »

They will have to as they shouldnt be discriminating against investment type. So, the platform charge should be the same whether managed funds or index trackers are used.

The cap Jim is referring to is the £40 one on account fees for directly held share holdings, including ITs, within an ISA account. They could could have presumably done that for the funds they imposed the £24 platform fee on when it was first introduced to sweeten the pill but presumably won't be able to post RDR2.

I assume there will continue to be a distinction between charging for shares and funds post RDR2.

planteria

jamesd wrote: »

planteria, it heavily depends on what you invest in and how you invest. Things like trading frequency and fund or share or ETF holdings can completely change the answer.

thanks Linton and James. i have Unit Trusts in my SIPP and a blend of Unit Trusts and Shares in my ISA. i really like the idea of being able to hold both together, in the same porfolio. but, if doing so is going to cause me to really miss out, i can rethink.

SnowMan

When HL introduced the tracker platform charge they refused to waive their re-registration fee for me to move away despite the significant increase in charges.

Hargreaves Lansdown were shown to have acted unfairly (I have documentary proof to back that up should HL try to get that part of this post removed).

With their very high re-registration fee of £25 per fund, it is going to be expensive for people to re-register away if they are hit by a large increase in overall charges this time around and are forced to move to cheaper platforms.

Of course HL might waive the re-registration away charge this time for those where there is a significant increase in charges (which may include those with Vanguard trackers) but given their previous approach I am doubtful they will.

So I would warn people to think very carefully before investing with Hargreaves Lansdown until they announce their new charging structure.

Froggitt

SnowMan wrote: »

With their very high re-registration fee of £25 per fund, it is going to be expensive for people to re-register away if they are hit by a large increase in overall charges this time around and are forced to move to cheaper platforms.

The Share Centre are refunding upto £300 of switching charges that HL or others may charge. Confirmed by phone yesterday.

Linton

planteria wrote: »

thanks Linton and James. i have Unit Trusts in my SIPP and a blend of Unit Trusts and Shares in my ISA. i really like the idea of being able to hold both together, in the same porfolio. but, if doing so is going to cause me to really miss out, i can rethink.

Most online brokers let you buy/sell shares, funds, bonds, ETFs and perhaps more esoteric things such as covered warrants in the same account. This is certainly the case with iii, Sippdeal (now called Youinvest) and Bestinvest and is highly desirable otherwise rebalancing can become messy. The only ones I know to be restricted are Fidelity which is funds only and Stocktrade (run by Brewin Dolphin) which is shares only.

dunstonh

I assume there will continue to be a distinction between charging for shares and funds post RDR2.

I cannot immediately think of any platform that has moved to RDR2 compliance that differentiates between the investment type. Money on platform is key thing they charge against irrespective of whether it is shares, funds or other. That said, there are models that focus on direct investments who will operate more like a traditional brokerage pricing model.

As I understand it, a platform should charge for platform services and should not discriminate between investment types in areas other than costs specific to that type of investment (e.g. dealing costs). The removal of bias is part of the reason for the changes.

planteria

thanks Linton.

i will continue to watch with interest. i have recently invested my ISA allowance, and am looking to make a SIPP contribution by the end of 2013..so will see how things pan out.

are Barclays an alternative to consider?

Rollinghome

dunstonh wrote: »

I cannot immediately think of any platform that has moved to RDR2 compliance that differentiates between the investment type. Money on platform is key thing they charge against irrespective of whether it is shares, funds or other. That said, there are models that focus on direct investments who will operate more like a traditional brokerage pricing model.

As I understand it, a platform should charge for platform services and should not discriminate between investment types in areas other than costs specific to that type of investment (e.g. dealing costs). The removal of bias is part of the reason for the changes.

If that were to come about could come as quite a shock for people with say £100k of equities in an HL ISA. Their charges would go from being capped at £45 pa (not £40 as I said earlier) to £750 if HL imposed a straight 0.75% fee on all investments - or a £25 per stock fee to get out.

With their past form as Snowman has posted for not always treating clients fairly, most would feel more comfortable if HL revealed their intentions sooner rather than later.