Hargreaves Lansdown asks clients for cash to cover new charges

hyposmurf

Customers of Hargreaves Lansdown will have to pay as much as £250 into their accounts with the fund shop to cover its new charges or risk having some of their investments sold automatically.

http://www.telegraph.co.uk/finance/personalfinance/investing/10593082/Hargreaves-Lansdown-asks-clients-for-cash.html

Drp8713

I thought that was the point of RDR to make your charges clear to you..

Thrugelmir

Holding cash to cover fees is standard practice.

talexuser

Much better seeing the charges than not knowing what they were when hidden in commission and a drag on your total returns.

However I do wonder if HL have worked out how many customers they can afford to lose under their new system.

hyposmurf

Yeh it is better having the charges more visible.Could they not just deduct them via direct debit?

dunstonh

most platforms operate with a cash account to pay charges. That is quite normal nowadays. It was only the fund supermarkets that still operated the old way. HL is positioning itself more as a wrap platform than a fund supermarket.

The article is a non story. It is more an instruction manual on how to work with an unbundled platform

However I do wonder if HL have worked out how many customers they can afford to lose under their new system.

Probably quite a lot as the ones most likely to leave are the unprofitable ones.

PippiShortsock

HL is positioning itself more as a wrap platform than a fund supermarket.

I've seen you make this comment a number of times, dunstonh, so I assume this denotes a significant change. However, I'm not clear on the distinction between a "wrap platform" and a "fund supermarket" unless it just means somewhere you can buy shares as well as funds. It would be very helpful to me (and I suspect to many others) if you were able to spare the time to explain what the change of focus means for the service available to the DIY investor. Thank you!

C_Mababejive

This is just tabloid mischief making. HL provide a service and need paying. They keep people in jobs. Previously the charges were less obvious..now they are in the open. Great... How else then are they to be paid? No one works for nothing...

bigadaj

C_Mababejive wrote: »

This is just tabloid mischief making. HL provide a service and need paying. They keep people in jobs. Previously the charges were less obvious..now they are in the open. Great... How else then are they to be paid? No one works for nothing...

I agree with you, but seeing a single explicit charge does seem to focus the mind, which is no bad thing.

Doesn't stop people moaning but does put pressure on suppliers, well hopefully, so it's good from all sides even though some may complain.

dunstonh

PippiShortsock wrote: »

I've seen you make this comment a number of times, dunstonh, so I assume this denotes a significant change. However, I'm not clear on the distinction between a "wrap platform" and a "fund supermarket" unless it just means somewhere you can buy shares as well as funds. It would be very helpful to me (and I suspect to many others) if you were able to spare the time to explain what the change of focus means for the service available to the DIY investor. Thank you!

A fund supermarket is one that just offers funds. A basic option by todays standards but the most common option just a few years ago. Fund selection, whilst large, was often limited from 500-1500 funds. A wrap platform is one that offers funds and direct investments. Effectively, any conventional investment that is on the LSE and virtually all funds offered via the whole of market distribution. Wrap platforms also typically have more investment wrappers and features. HL used to be a fund supermarket but has moved towards wrap. Until the platform review it appeared more as a fund supermarket with a direct investment bolt on. However, they now seem to marketing themselves more as a full platform service. e.g. their "Waitrose" style service that Danny Cox was talking about.

Rollinghome

dunstonh wrote: »

However, they now seem to marketing themselves more as a full platform service. e.g. their "Waitrose" style service that Danny Cox was talking about.

Waitrose sell just groceries. It's Tesco who sell almost everything. I think Danny Cox was referring to "Waitrose-style pricing" though the reality is closer to Ryanair with a raft of stealth charges for everything they can think of .

What Investment's guide to "Wrap accounts, trading platforms and fund supermarkets" which can be confusing and over-lapping terms: http://www.whatinvestment.co.uk/investing-in-funds/unit-trusts-and-oeics/444251/wrap-accounts-trading-platforms-and-fund-supermarkets.thtml