Negotiating lower platform fee with Hargreaves Lansdown

sebtomato

kinger101 wrote: »

The problem with this is even if they are permitted to negotiate, you don't know who'll be on the end of the phone at HL, and what mood they're in. If it's a pragmatic person in a good mood, maybe you'll be lucky. Assuming you're a customer whom they value. Call five seconds later, and you might get someone who won't budge an inch.

Like any large company, they are going to have set processes, and people at the end of the phone are going to be given specific guidelines (e.g. "no discounts whatsoever" or a range), so no, it's not going to be just based on who is answering the phone...

kinger101 wrote: »

If they perceive you'll be a difficult customer, they'll be happy to see the back of you.

What's the definition of a "difficult customer" anyway, and how many companies (large or small) would tell their customers to go away? Is a difficult customer someone who calls them or contact them every week, or someone who asks for a discount every couple of years? Even if a "difficult customer" was someone getting a 0.20% discount on their fees for instance, it's still generating revenue and profit, and way above their actual cost.

In their mind, a difficult customer is probably an expensive one, so someone who interacts with them a lot (calls or emails), completes paper forms instead of doing online transactions, is transferring out assets etc.

kinger101

sebtomato wrote: »

Like any large company, they are going to have set processes, and people at the end of the phone are going to be given specific guidelines (e.g. "no discounts whatsoever" or a range), so no, it's not going to be just based on who is answering the phone...


What's the definition of a "difficult customer" anyway, and how many companies (large or small) would tell their customers to go away? Is a difficult customer someone who calls them or contact them every week, or someone who asks for a discount every couple of years? Even if a "difficult customer" was someone getting a 0.20% discount on their fees for instance, it's still generating revenue and profit, and way above their actual cost.

I wouldn't assume their processes are that rigid. Sometimes if a call a company and get an answer I don't like, I get a better one when I call the next day and speak to someone else.

Your BT example is a good one. At the end of my contract, I asked the guy I spoke to at BT match Plusnet. He said no, and suggested I go with Plusnet if that's the deal I wanted. I asked to be transferred to the retention department. He said no. I changed to Plusnet. I get a call from BT's retention department once Plusnet contacted them about the transfer. BT told me they'd match Plusnet. I told them that ship had already sailed.

A "difficult" customer is one who's perceived as not being profitable or sufficiently so. It's hard to know when that line is crossed without knowing how they price staff time internally, and how much time getting an answer might consume. But with HL, your "0.20% discount" is actually a 44.4% discount.

eskbanker

sebtomato wrote: »

how many companies (large or small) would tell their customers to go away?

Who said anything about companies telling customers to go away? The scenario under discussion is whether the company is prepared to change their published pricing (that the customer agreed to) in order to prevent the customer exercising their right to walk away, which is clearly not the same thing....

sebtomato

kinger101 wrote: »

Your BT example is a good one. I asked the guy I spoke to to match Plusnet. He said no, and suggested I go with Plusnet if that's the deal I wanted. I asked to be transferred to the retention department. He said no. I changed to Plusnet. I get a call from BT's retention department the next day saying they'd match Plusnet. I told them that ship had already sailed.

The BT retention team has got more power than the standard operators. If you had spoken to them upfront, you would have had the price match.
I don't think HL have a dedicated "retention team" or phone number of that...

kinger101 wrote: »

A "difficult" customer is one who's perceived as not being profitable or sufficiently so.

I don't know many companies that ask or let their customers to go elsewhere because they are not "sufficiently profitable" (while the company still makes revenue/profit from that customer, and most of interactions are fully automated anyway)... It's not like a less profitable customer is taking the place of a profitable one, and therefore they have to make a choice.

kinger101

sebtomato wrote: »

The BT retention team has got more power than the standard operators. If you had spoken to them upfront, you would have had the price match.
I don't think HL have a dedicated "retention team" or phone number of that...


I don't know many companies that ask their customers to go elsewhere because they are not "sufficiently profitable" (while the company still makes revenue/profit from that customer, and most of interactions are fully automated anyway)...

I didn't say they'd tell you to go elsewhere. More implying that they wouldn't be overly worried about you leaving, or sorry that you had.

This all all hypothetical anyway. Either ask for a discount or don't.

Albermarle

To stop the thread just going round in circles, the best thing to do is for you to try to negotiate one and let us know how it works out - not just keep debating with people here whether or not you should be entitled to get one or could realistically get one.

My feelings exactly !

sebtomato

kinger101 wrote: »

I didn't say they'd tell you to go elsewhere. More implying that they wouldn't be overly worried about you leaving, or sorry that you had.

I never said I thought HL would be overly worried of me moving my investments elsewhere either. I am however sure they have calculated the cost of an existing customer moving out, vs. the cost of hiring a new one, and therefore have some room for negotiation...

kinger101 wrote: »

This all all hypothetical anyway. Either ask for a discount or don't.

I am going to ask for a discount regardless, that's not the point of this thread. I am not asking people here on whether I should ask a company for a discount or not!

redmalc

I mentioned it last week without a response so I have moved 200k out

Rich1976

Interesting thread and coincidentally I messaged them start of December once Vanguard had announced their new sipp as both myself and my other half hold approximately 150k with HL and have been with them since 2006.

I mentioned this to them as well as the exemplary level of service they have always provided ( which they have ) and could they see any way of reducing their fee from 0.45% for us. I knew what the answer would be but thought I would ask.

A few days later back comes the expected response. That whilst we were were valued customers and they appreciate we have been with them 15 years, No there is no plan to reduce the platform fee and customers need to look beyond headline fees when determining which platform to use such as choice of funds, online offering, customer service etc etc.

To be fair it was a very detailed response they gave and nothing they said came as a surprise.

dispassionateview

I also phoned Hargreaves about incentivising me to stay in their SIPP (£200k+) before Vanguard's SIPP launch because I want to reduce my risk by spreading my investments in several companies. They asked what I would want and I suggested maybe £500. I was told, like Rich1976 above, that they have no incentives as such.

Here are a few takeaways:
- Hargreaves is an excellent company, with a highly competent and responsive customer services team, a rich app, and a fully featured website with many investment options.
- For ETFs in a SIPP, like others have mentioned, they are actually cheaper for me than Vanguard, £200 p.a. cap vs £375 p.a. cap. Those with ETFs and Investment Trusts are in effect subsidised by those investing in funds.
- Hargreaves tend to respond to events, partly for commercial reasons, but bad PR is a consequence. For example, Hargreaves only dropped their Investment Trust fee plans a few years ago when there was sizeable pushback from investors.
- Hargreaves' share trading fees are relatively high. I have requested thay they reduce the standard trading fee from £11.95 to £5.00, to match iWeb at least.
- I think a year's subscription to FT digital (£200+) would be a good incentive for some, including me for my ISA (capped at £45 p.a.).
- Vanguard's mutual philosophy is great but let's not forget it is a business and conservatively run. Their UK offering is simple, cost-effective but very limited. For instance, they purposely avoid having a frequently trading platform, so no app. Yet in the US they have reduced their share and options commissions to $0. The UK platform development is cautious at best.
- All in all, Hargreaves and Vanguard are both wonderful companies with competitive fee structures. Investors are fortunate to have both of them.