Hargreaves Lansdown "playing hardball"

jamesd

Overall with the changes they expected a margin of 0.44% of the funds under management. In their recent interim results presentation to analysts they reported that their cost ratio had fallen to 0.196%, which pretty clearly explains why they can make capped 0.2% offers to larger investors and make money on them.

They report that feedback on the changes so far has been:

• 96.5% no contact or seems reasonable.
• 1.4% clarifications or adjustments like switch to paperless.
• 0.7% practical questions about how it works.
• 0.7% about investment trusts. (reverting this handling cost them about £1.5 million) (70k of 580k customers hold them, 12% of customers in earnings Q&A at around 53 minutes)
• 0.53% about passive investments (trackers).
• 0.17% assorted apprehensive feedback.

From their RDR analysts presentation they mentioned that only about 7% of assets under management were held by those with total pot sizes over a quarter of a million Pounds. Average number of fund trades was seven per customer per year.

96% of assets under administration are held by clients with less than £200,000 in combined ISA, SIPP and fund and share accounts according to the interim results Q&A at 57 minutes. Anyone with that sort of money should be in a good bargaining position compared to most but it also shows that their pricing drops for large amounts don't actually have much effect in reality for their customers. I don't know the reason for the difference between RDR and interim results numbers.

gadgetmind

jamesd wrote: »

96.5% no contact or seems reasonable.

Or as in my case, transfer paperwork in the post.

And I'm not sure where in those figures my wife would fit as she's made a formal complaint regards them attempting to unilaterally change the agreement to hike her fees six fold.

Rollinghome

They say in response to RDR: "There will be short term noise".

Are they referring to us?

gadgetmind

Well, I'm going to leave them in peace fairly soon.

ss53

They've had no contact from me so far either but my transfer was initiated last week.

koru

jamesd wrote: »

Overall with the changes they expected a margin of 0.44% of the funds under management. In their recent interim results presentation to analysts they reported that their cost ratio had fallen to 0.196%, which pretty clearly explains why they can make capped 0.2% offers to larger investors and make money on them.[/I]

Furthermore, that's just the average cost. A lot of their costs will be fixed. That is, they will not vary much with changes in total assets invested. So, the incremental cost of one extra client with a pot of, say, £300k is much less than 0.2%. So, if they would otherwise lose that client, its worth accepting 0.2% capped at £500, because the £500 is almost pure profit. (But obviously they will happily take £1000 or more from those who don't complain.)

jamesd

Yes, just average. I've probably had more cash in my account on average than the total pot size of an average client and if I recall correctly their lower than usual margin on that is around 0.9% at the moment.

cepheus

Platforum have compared platforms combining cost and other factors such as guidance, usability and content. It named Hargreaves Lansdown as the best overall platform! :eek:


That must have cost HL a bit!


Read more: http://www.thisismoney.co.uk/money/diyinvesting/article-2553178/Forget-price-tag-How-does-DIY-investing-platform-rank.html#ixzz2tE9mV1go

masonic

cepheus wrote: »

Platforum have compared platforms combining cost and other factors such as guidance, usability and content. It named Hargreaves Lansdown as the best overall platform! :eek:

It's notable that while HL came top for customer service, it did not come top for tools and information and wasn't recommended for beginners or those with large pots. In fact, Platforum only recommended HL "if you have a pot of around £50,000, spread between an Isa and a Sipp and all in funds". So I'm at a loss to what those scores at the beginning of the article were about.

naedanger

An interesting article in the context of HL "playing hardball":

http://www.moneymarketing.co.uk/news-and-analysis/advisers/hargreaves-threatens-ifa-with-legal-action-over-charges-criticism/2006461.article

Does this seem a bit rich coming from HL “One of the biggest problems in financial services is endless knocking copy.”