Negotiating lower platform fee with Hargreaves Lansdown

quirkydeptless

At the start of last year, HL did increase the loyalty bonus on some funds, possbly as a response to customers asking for lower fees and/or a response to competion, but not a massive one.

I'm all passive ETFs in my HL ISA now. A capped £45 is considerably less than if my ISA was in funds. The trading cost of £11.95 is a bit of a sting, but I trade minimally.

The funds I hold on there in my SIPP have an average loyalty bonus of 0.2%, so I see this as effectively my platform cost being 0.25% with free trading which I'm OK with. Due to the ETF/IT/share cap being £200 for the SIPP and the size of my SIPP, this actually works out cheaper for me.

I had considered putting new money into other providers and save a bit more, but with my set up, e.g. new money into my ISA is effectively 0 holding cost now, it didn't seem worth it.

So HL isn't overly expensive in some set ups, but it's not ideal and best would be to find the platform with the best trade of in cost/benefits that meets your portfolio size and requirements.

sebtomato

kinger101 wrote: »

If you do ask them for a reduction, I wouldn't make such a nebulous and inaccurate comparison with Waitrose in your discussions with them.

I am just barely replying to the comparison started by someone else. But thanks, I was going to discuss Waitrose on my call with HL...

sebtomato

Aminatidi wrote: »

If they say yes all is well but if they say no you really do need to be prepared to say "I'm off" as otherwise what incentive do they have to say yes?

I am planning to do some significant additional investments soon, hence the timing now to understand if it's worth staying with HL for the new and current investments, or start moving elsewhere. Also, I am progressively moving most of my funds from active to passive/Vanguard trackers, so Vanguard would probably be a good platform anyway.

sebtomato

quirkydeptless wrote: »

At the start of last year, HL did increase the loyalty bonus on some funds, possbly as a response to customers asking for lower fees and/or a response to competion, but not a massive one.

Thanks. I have seen some loyalty payments from HL, but never really understood where they come from/how they are calculated. They have been pretty negligible anyway.

eskbanker

sebtomato wrote: »

kinger101 wrote: »

If you do ask them for a reduction, I wouldn't make such a nebulous and inaccurate comparison with Waitrose in your discussions with them.

I am just barely replying to the comparison started by someone else. But thanks, I was going to discuss Waitrose on my call with HL...

Yes, I introduced the Waitrose analogy but think it's probably been pulled and stretched more than enough now!

However, the fundamental point remains that in many sectors there will be players who consciously position themselves as premium and who are correspondingly less likely to try to compete on price. Of course there's no harm in asking, but thus far nobody has shared any evidence of customers negotiating lower platform fees since HL's 2014 changes....

Albermarle

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.

Most of their main competitors offer similar cashback deals on and off during the year , so I guess they wanted to match that .
I presume paying out a relatively small amount of cashback overall is peanuts to HL.

I would think it is more likely that HL and maybe others will make a headline public reduction in fees in response to increased competition ( Vanguard etc ) at some point rather than individual deals with customers.

sebtomato

Albermarle wrote: »

I would think it is more likely that HL and maybe others will make a headline public reduction in fees in response to increased competition ( Vanguard etc ) at some point rather than individual deals with customers.

Yes, I think they are going to have to cut their fees across the board, although I think they will always remain higher than competitors, as they can't just compete on price/cost. However, someone with business sense could say that they may as well do that for existing customers who ask for it, as opposed to after they have left.
Recent news about Vanguard moving into low cost wealth management/investment advice (possibly for 0.3% fee with a minimum of $50,000 invested) is going to shake the competition further.

under_the_radar

You may think it's a joke that HL can get away with pricing like Waitrose, and claim it's justified by providing a higher standard of service, but they explicitly compared themselves with Waitrose when they introduced their post-platform-review charging scheme in 2014.

Their main charges (i.e. annual charges and dealing charges) haven't changed since then, but they have gradually removed all the ancillary charges they had from 2014 (probate charges, account closure charges, transfer out charges, ...). So we may be nearer to seeing a cut in their main charges, since there's nothing else left to cut now. But perhaps not quite yet.

annaccordion

Simplistic, but when you think it's time to negotiate with HL, it's because your investments have reached a stage where you think you can.

If they have & if you're not a frequent trader, IMO it's time to move as you'll never going to get HL down get to the fixed fee platform charges that cost c.£120 - £240 pa.

sebtomato

annaccordion wrote: »

Simplistic, but when you think it's time to negotiate with HL, it's because your investments have reached a stage where you think you can.

If they have & if you're not a frequent trader, IMO it's time to move as you'll never going to get HL down get to the fixed fee platform charges that cost c.£120 - £240 pa.

True, but I am a frequent trader in a sense that I am rebalancing my portfolio towards fewer and more passive funds, and also have some more money to invest over the next 12 months. I never buy or sell funds in big chunks, in one go, to average out, so I am expecting hundreds of transactions over the next 12 months. In that respect, any platform charging a fee for trading is not going to be cost effective in my case.