Negotiating lower platform fee with Hargreaves Lansdown

sebtomato

Hi,

HL charges 0.45% on investments up to £250K, and then 0.25% on investments above £250K for its platform fee.

In comparison, Vanguard only charges 0.15%...

I understand that HL might provide better tools, choice, discount on some fund fees etc. but if most of my investment is going to be against Vanguard trackers, and the fund fees are the same between platforms, HL is starting to look costly.

Has anyone managed to negociate more favorable platform fee with HL? Surely, they would prefer to give some discount as opposed to losing long term customers to cheaper platforms?

Thanks,
S.

eskbanker

What sort of reaction would you expect if you went into Waitrose, picked up a tin of beans and told them you could get it cheaper at Lidl?

Clue: it's somewhat unlikely to be 'oh well, we'll match that price then' or even 'OK, here's a discount'....

Edit: to be fair, anecdotally HL were prepared to discuss fees years ago after changing their charging structure, but I don't recall seeing any reference to it happening for a long time: https://forums.moneysavingexpert.com/discussion/4889890/hl-customer-charges-custom-offers

Jackthedog

Don’t buy funds buy investment trusts and they are pretty cheap at about 50 quid a year in an isa or nowt in a vantage account

Thrugelmir

sebtomato wrote: »

Has anyone managed to negociate more favorable platform fee with HL?

With over a million account holders do you think that they'll be concerned with losing you as a customer. :think:

sebtomato

eskbanker wrote: »

What sort of reaction would you expect if you went into Waitrose, picked up a tin of beans and told them you could get it cheaper at Lidl?

Clue: it's somewhat unlikely to be 'oh well, we'll match that price then' or even 'OK, here's a discount'....

Quite a poor example, since Lidl tend to have their own brands only, so you are not buying the exact same product (unlike an investor buying a Vanguard tracker fund from HL and a Vanguard tracker fund from Vanguard)...

But yes, I don't know if you have noticed, but customers are becoming more savvy now, and the supermarkets increasing their market shares recently at Aldi and Lidl, not Waitrose...

sebtomato

Thrugelmir wrote: »

With over a million account holders do you think that they'll be concerned with losing you as a customer. :think:

Like any company, I am sure they are concerned about losing customers, particularly in the context of the whole Woodford recommendations/continued push that is backfiring on them, the progressive move of investors to index trackers rather than active funds (meaning some of HL's advantages disappear, like negotiated fund fees), and companies like Vanguard coming strong in the UK (in term of now accounting for the majority of funds but also platforms and now wealth management).

Like any company, recruiting new customers is more expensive than retaining existing ones. On the basis they are willing to give financial incentives to get new customers and transfer assets to them, the opposite must be true too, surely?

I don't expect them to align to very low platform fees like Vanguard's, but I am sure they could do something to retain good customers (particularly when they have been for 10 years and have significant investments with them).

If they give me some rebate, then I will be glad I asked (like many companies, if you don't ask, you don't get). If they don't, then I will start shifting my investments elsewhere.

sebtomato

Anyway, is someone actually aware of HL negociating fees or providing customer-specific discounts (as opposed to speculations/opinions on whether they should or not)?

bowlhead99

sebtomato wrote: »

Anyway, is someone actually aware of HL negociating fees or providing customer-specific discounts (as opposed to speculations/opinions on whether they should or not)?

Yes; if you go far enough back on this board on the forum to when HL last changed their fee structure (RDR followed by 2014 platform review?), you will find that several forum members with sizeable funds balances negotiated to get a fee discount rather than leave and take their balances to a rival.

So if you had £200k+ of funds in an account on their platform at the time HL pushed through a fee structure change half a decade ago, you could have let them bribe you to stay with a personalised unpublished rate. People posted here that they had achieved that, and have mentioned it since.

Whereas, if you're saying you have, say, £100k of funds with them now and have been paying 0.45% for as long as you can remember, but would prefer to pay less, they are likely to say, well feel free to stay on our fee or leave for someone else's fees, that's always been your choice.

If you ask for a fee break without being a big investor - whatever discount they offer you they will have a fear that if you say on social media that all you need to do to get a better rate at HL is ask for one and threaten to move, like you just did... then everyone will do the same. A giveaway of a couple of hundred quid could cost them millions. So, don't expect them to offer it.

If you have £500-1000k on their platform, you can probably be taken seriously as someone who pays them a lot and has realised the competition if a lot cheaper and might move it. And giving you a personalised rate at a million is not something Joe public would be clamouring for because Joe public doesn't have a million.

sebtomato

bowlhead99 wrote: »

If you ask for a fee break without being a big investor - whatever discount they offer you they will have a fear that if you say on social media that all you need to do to get a better rate at HL is ask for one and threaten to move, like you just did... then everyone will do the same.

I agree with most of your points...apart from "everybody would do the same". The large majority of people are lazy when it comes to their finance, and are not going to bothered to even ask for a discount and of course even less bothered to research and switch funds to another platform, just to save 0.30%. Some people may threaten to move but how many would actually be bothered...

In the same way, the vast majority of people can't be bothered to check if they can get a cheaper house insurance elsewhere when it's time to renew (which takes about 10 minutes) etc. Many companies rely on that laziness and also on the fact that people just don't ask for discounts.

After searching online, I haven't seen any evidences on people getting discounts recently from HL, so either HL never gives any discount (in order to avoid setting a precedence) or people do get some in some situations but stay quiet about it....

If HL are willing to give up to £500 cashback for people to transfer funds in, surely they are willing to give some of that for people not to transfer out.

Anyway, I can always ask, and if I don't get anything at all, I will start switching to other platforms (and then HL will give me some financial incentives to come back after a couple of years). win-win

Alexland

From the results people used to disclose about the reductions they had achieved from negotiation with HL they still would have been better transferring out onto a more appropriately priced platform. I doubt HL bother offering these deals anymore.

In Peter Hargreaves book 'In for a Penny' he describes how he would often advise difficult customers that other platforms might be more appropriate for their needs in order to stop them draining HL's time and resources and hope they go bother one of his competitors.

Alex

sebtomato

Alexland wrote: »

In Peter Hargreaves book 'In for a Penny' he describes how he would often advise difficult customers that other platforms might be more appropriate for their needs in order to stop them draining HL's time and resources and hope they go bother one of his competitors.

Maybe that statement was more relevant when there was less competition and they had more competitive advantages, which I think are reducing now. I like HL because of the data/functionality of the site, they have negotiated discounted management fees on some of the funds, the vast number of funds available and also the fact that they are a big player = safer. In term of the recommended selection of funds from HL, everyone has understood what it means in reality, so that has no value...

Now, if I were to move to Vanguard as a platform and more passive investments (current trend investors are following, amplified by the Woodford issue), then I don't need a large selection of fund, I don't need research tools and Vanguard are bigger than HL anyway...

The fact that HL are giving incentives for people to transfer funds in would seem to be an indication that business is not as easy as it may have been before.

I am sure Peter also knows that recruiting a new customer is a lot more expensive than retaining an existing one.