Danny Cox of Hargreaves Lansdown being pulled apart on Radio 4 Moneybox over new fees

guitarman001

cepheus wrote: »

I recall something in the programme about HL clients have until June to move without increased fees.

Oh? So I can move my LifeStrategy fund to another broker fee-free?

innovate

WOW, hardly ever come across a more arrogant and slippery attitude than that conveyed by Danny Cox. Definitely looking to move from HL now, even if I was only half-heartedly doing so before.

innovate

guitarman001 wrote: »

Oh? So I can move my LifeStrategy fund to another broker fee-free?

Only if you sell them and move the cash. No fee-free in-specie transfer I am afraid.

Rollinghome

innovate wrote: »

Only if you sell them and move the cash. No fee-free in-specie transfer I am afraid.

And when the new fees come in they'll charge you to transfer as cash too plus another fee to close each of your sub-accounts.

None of the new charges other than the platform fee are required by RDR or any new regulations. They have been introduced in order to keep the headline figure low and obscure how expensive their service is. I think that was what Paul Lewis and Justin Modray meant by calling the charges "sneaky".

As this Guardian article makes clear, their overall margin has been 0.73% with 66% on Vantage accounts and, as they been briefing analysts, their profits will not be significantly reduced. Those numbers are a long way from the headline figure of 0.45%.

They have been telling two different stories. One story telling clients that they have slashed fees and started a price war, and another to shareholders telling them don't worry, we haven't really.

The new charge particularly mentioned by Modray was up to £600 for probate valuations that could hit newly bereaved widows and widowers but apart from that there's a whole raft of charges for what is already a very expensive service that aren't charged by much cheaper rivals - including those sky-high exit fees.

Glen_Clark

Rollinghome wrote: »

They have been telling two different stories. One story telling clients that they have slashed fees and started a price war, and another to shareholders telling them don't worry, we haven't really.

Supermarkets often do that, its par for the course.
The thing that shocked me was his insinuation your money isn't safe with his competitors, and just before the end of the interview. I have never heard that before. Since your investment is supposedly ring fenced in a nominee account the only way you could lose it is through Madoff type fraud. Is that what he is accusing his competitors of?

Totton

organic_wanabe wrote: »

Unbelievable! I have been with HL for years and now realise what an uninformed idiot I have been. Do they really believe that they will keep the majority of their clients?

They will keep the majority of their customers and quite likely continue to grow the business according to esteemed sources such as the FT. Not everyone is a loser with the new charges from HL.

SnowMan

Totton wrote: »

They will keep the majority of their customers and quite likely continue to grow the business according to esteemed sources such as the FT. Not everyone is a loser with the new charges from HL.

Most customers are paying substantially more with HL than if they moved to a different platform (the only exception being those with SIPPs below about 50k).

Previously HL customers may not have been aware they were paying substantially more. I would include you in that group as you said to me in June when I said to someone looking to switch to a new platform, possibly HL, that HL were likely to be expensive,

Totton wrote: »

Rubbish, you know no better than anyone else if in the future they will be expensive or not :-)

But now it is more obvious (perhaps even to you) that HL are expensive. There are posts on this forum where customers are saying they didn't realise how much they were paying to HL.

So the question is will those customers move to cheaper platforms? That is the question that is difficult to answer. Logic says they should but people don't always act in their own interests or logically.

Glen_Clark

Well I think the charges pale into insignificence compared to Danny Cox's apparent suggestion at the end that his competitors are fraudulent (when he was backed into a corner over Hargreaves Lansdown's 73% profit margin)
But Hargreaves Lansdown customers were already paying dealing costs more than double their competitors so I don't see why they won't continue doing so.

ColdIron

SnowMan wrote: »

So the question is will those customers move to cheaper platforms? That is the question that is difficult to answer. Logic says they should but people don't always act in their own interests or logically.

I suspect that many customers will stay put especially once they see that the charges are going to be a little lower than they were paying previously, however opaquely, even though they are still higher than many of their competitors. They (sort of) knew that anyway, and the Waitrose/John Lewis analogy carries some sway

The ones that are most likely to move are holders of trackers such as the Vanguard LifeStrategy as these are going to be considerably more expensive with the loss of the cross subsidy

I am curious about the announcement of the super low cost trackers from L&G and Blackrock at 0.06%. Unless I've got it wrong these could compare well (0.45 + 0.06 = 0.51) with say the VLS at Charles Stanley Direct (0.25 + 0.33 = 0.58) but I am happy to be corrected

Glen_Clark

ColdIron wrote: »

I am curious about the announcement of the super low cost trackers from L&G and Blackrock at 0.06%.

Sounds interesting:) have you got a weblink please?