Hargreaves Lansdown "playing hardball"

SnowMan

Investment Week say the new HL charging structure is expected later this week

http://www.investmentweek.co.uk/investment-week/news/2310183/hargreaves-to-announce-waitrose-style-premium-pricing-structure

The firm is set to announce a tiered pricing model similar to most advised platforms, with charges for lower-end clients starting at around 70bps and sliding to around 30bps for larger accounts

gadgetmind

Based on what's said there, this is going to be a suicide note as I certainly won't be leaving anything on their platform.

JohnRo

Oh come on, they're offering a "premium" service, that's got to be worth every excessive penny.

gadgetmind

I'm looking forward to this one. Time to pull up a comfy chair!

jimjames

“We are often compared to supermarkets: do you want to do your shopping at Waitrose or Lidl?”

Lidl and Aldi seem to be some of the fastest growing supermarkets albeit from a low base. HL might have missed a step with that analogy.

Cox said the operating margin on Hargreaves’ Vantage platform, which currently stands at 0.66%, will not be materially impacted by the unbundled model.

If it is purely based on a % then for small portfolios this could still be a good platform option - it is the fixed platform cost at the moment that is a killer for small investments on HL.

westy22

What 'Premium Service'? They are selling and storing specific units of financial products - a Vodafone share purchased from HL is no better, cheaper or of more value than one purchased from the very cheapest source.

jimjames

westy22 wrote: »

What 'Premium Service'? They are selling and storing specific units of financial products - a Vodafone share purchased from HL is no better, cheaper or of more value than one purchased from the very cheapest source.

I'd see it as their website and their commentary that are the premium product. Yes the investments may be the same but it is the wrapping round them that differentiates such as being able to monitor multiple family accounts via one login.

westy22

I see where you are coming from and, to a certain extent, I agree with you. The main question is how much of a premium are people prepared to pay? Maybe 10bps? possibly 20bps? But 60-70bps - I don't think so!

dunstonh

Lidl and Aldi seem to be some of the fastest growing supermarkets albeit from a low base. HL might have missed a step with that analogy.

Waitrose is seeing growth as well.

Cox said the operating margin on Hargreaves’ Vantage platform, which currently stands at 0.66%, will not be materially impacted by the unbundled model.

With most platforms charging between 0.25% and 0.45% in the low to medium range, it would suggest that if they are going to keep at 0.66%, that they are going to have to charge more.

What 'Premium Service'? They are selling and storing specific units of financial products - a Vodafone share purchased from HL is no better, cheaper or of more value than one purchased from the very cheapest source.

Platforms on the whole are much the muchness. Whilst some have better functionality in places than others, they mostly all do exactly the same job with exactly the same efficiency.

There is possibility that they are willing to sacrifice smaller investments that are likely to be loss making or close to maintain profitability. For example, all those with index trackers on HL are going to end up paying more. If they lose 25% of those people then they gain on 75% then the overall gain (and lower costs) increases their margins in those areas. They can then be offset against the other areas they will see reduced income from.

bigadaj

I woneder if their approach will naturally lead to the opposite of what they want.

If you are a novice investor it's a nice site with generally good backup, notwithstanding the Royal Mail debacle.

On smaller sums then the difference on charges of 0.2-0.3% ona few thousand might not be worth worrying about.

Once you're up to six figures, and combined with the fact that these people are becoming experienced investors then the quality spin ain't worth a few hundred quid a year or more, so most people would actually move.

Will be interesting to see their actual firm figures and commitments, looks like they are putting some pr spin on early. I don't hold investments with the and their fees for switching funds out are xpensive so could be an interesting time when people get hit with such charges on the change to rdr pricing, the regulator could be busy with customer complaints.