Negotiating lower platform fee with Hargreaves Lansdown

sebtomato

Thanks to the recent posters for sharing your recent experiences in asking for discounts.

As expected, sounds like nobody has been successful getting anything from HL, regardless on being a customer for a long time or size of portfolio.

I will see what they say. Having been a customer for 7 years, if they don't offer anything at all, I will take a large chunk of my money elsewhere, and my next ISA won't be with them.
No company can really justify not giving any discounts or incentive to long term customers (I am not talking aligning to competitors' prices). It would either be plain arrogance that they have a superior offering than anybody else (they probably do but how much is that worth?), lack of awareness of changing market conditions/competition, or lack of awareness of issues they have had recently (like pushing hard for Woodford's or M&G funds).

Quite a lot of bad publicity in recent news, about the Wealth 50 list underperforming, transfers out taking much longer than expected etc.

Probably best to diversify anyway as opposed to keeping all investments under one provider.

Albermarle

I also phoned Hargreaves about incentivising me to stay in their SIPP (£200k+) before Vanguard's SIPP launch

I do not really understand why the Vanguard SIPP launch is seen as such an event that has triggered all these comparisons with HL , and brought into focus their high fees
There are numerous reputable SIPP platforms ( all offering a big range and immediately available ) that are already cheaper than HL and have been for some time .

sebtomato

Albermarle wrote: »

I do not really understand why the Vanguard SIPP launch is seen as such an event that has triggered all these comparisons with HL , and brought into focus their high fees

I guess because pensions are much longer term investments, there were some recent articles on how fees can compound negatively over long periods, and also many people will not actively manage their pension investments (compared to other investments they have), so may just use balanced trackers like LifeStrategy or Pension trackers.

bowlhead99

sebtomato wrote: »

Probably best to diversify anyway as opposed to keeping all investments under one provider.

Ultimately if you decide that diversification of provider is a sensible thing to do, to avoid a potential uncompensated loss - or if that appears remote, then more practically, some operational disruption - then you should go ahead and diversify your providers.

Because otherwise, you may feel foolish if you came a cropper to some issue that you had considered mitigating through a change in provider... but you had decided to not diversify and instead allow HL to bribe you to stay with some fee rate 'incentivisation' for being a large or long-standing customer.

Seems to me that if you want to diversify you should prioritise that, regardless of discounts or bribes or economies of scale from staying with HL. A fee reduction bribe of 20bps a year for a few years, for example, doesn't seem a lot to fund your self-insurance of a potential financial loss or the hardship/inconvenience from temporary lack of access to your assets.

Whereas if you don't really feel you need to diversify, it is a weak argument to throw 'diversification' into the ring as a reason why you are going to move if the price doesn't improve.

IMHO, conflating the two separate issues is not as helpful as it might first appear because you are unlikely to be exactly sitting on the fence and then have the fee rate tip the balance.

I doubt they have lack of awareness over what rival providers offer, or lack of awareness of publicised 'issues they have had recently'. If they're not giving customers discounts just for being customers, it's because they don't think they need to, as most of the millions of customers don't have your mindset (not saying it's a bad mindset).

You can say that's arrogance or whatever. But some of your examples of 'bad publicity in recent news' are simply not the sort of things they would want to reduce their revenues to counter and get you onside.

For example what proportion of existing customers are going to say, "Hey, I noticed the press criticised you for having slow transfer out times. Slow transfer out times are annoying for people leaving you, and as a result of the adverse publicity I have certainly been put off the idea of transferring out because it sounds like a big hassle. So, please now reduce my fees, otherwise I would like to start a slow and tortuous transfer-out process". The second sentence doesn't logically follow from the first, despite there being 'adverse publicity'

I'm not sure I quite agree that no company can afford not to reduce prices for longer term customers. In the business to business world, longstanding large contracts can certainly help you secure a good deal going forward, and in some retail relationships you get the same, especially in luxury goods. But for a lot of retail offerings there isn't much or any discount on the table (simply because you've used them for a long time), and the shops or service providers don't really go out of business because of it. The mobile phone companies with their customer retention deals will look at how much you might be willing to spend with them, rather than the fact you've used them for 3 yrs vs 13 yrs vs 23 yrs.

sebtomato

bowlhead99 wrote: »

Ultimately if you decide that diversification of provider is a sensible thing to do, to avoid a potential uncompensated loss - or if that appears remote, then more practically, some operational disruption - then you should go ahead and diversify your providers.

I am considering several factors, not just the fees being charged, and my circumstances are different from other people's.

In favour of HL: large choice of funds, trusted platform, website/tools/data available, all investments under one roof (convenience, particularly for ISAs), speed of operations, savings accounts available etc.

In favour of starting diversifying to other platforms: risks of all investments in one place (not just HL financial stability but also other risks like hacking etc.), higher cost, feeling valued as a customer, planning to move a large portion of investments to passive trackers, etc.

There is a lot of adverse publicity currently against HL, and also an investor trend to move to passive funds (where HL competitive advantages are reducing), so I think they will need to react to that, either by reducing their fees, adding other advantages/products, or as someone mentioned creating a "low cost" platform. If they have already plans in place to reduce fees, they may as well retain some customers before they live, so it's related.

Brian65

sebtomato wrote: »

trusted platform, website/tools/data available, all investments under one roof (convenience, particularly for ISAs), speed of operations, savings accounts available etc.
.

1) iweb is also a FTSE100 plc, xo are a small plc but trusted by Building Societies and other Brokers to run their sharedealing & custody services, Don't know about the others but they seem to be trusted too.
2) tools data may be available to non account holders? - I don't know as I'm happy with Google.
3) Not aware of HL being faster than other platforms
4) Why would you want to be ripped off by HL savings account rates as well as their platform, funds and dealing charges?

Thrugelmir

sebtomato wrote: »

I guess because pensions are much longer term investments, there were some recent articles on how fees can compound negatively over long periods,

Virgin Money started their UK tracker in 1995 to a huge fanfare. Fees charged aren't a new topic. Technology is the game changer.

sebtomato

Brian65 wrote: »

1) iweb is also a FTSE100 plc, xo are a small plc but trusted by Building Societies and other Brokers to run their sharedealing & custody services, Don't know about the others but they seem to be trusted too.
2) tools data may be available to non account holders? - I don't know as I'm happy with Google.
3) Not aware of HL being faster than other platforms
4) Why would you want to be ripped off by HL savings account rates as well as their platform, funds and dealing charges?

1) yes, some other platforms can be trusted too, but are going be less big
2) Tools are indeed available elsewhere, or even to anyone with an HL account anyway. Research can be done using HL tools and purchase could be done elsewhere (but of course less convenient)
3) I think they are quicker for some operations, like investing new money (without waiting for payment to clear first)
4) HL short term saving account rate (at 1.25%) are not too bad compared to other banks (or keeping my money on my bank account). Good for an holding some money waiting to be invested (as opposed to investing in large chunks), but not for longer term

Malthusian

Albermarle wrote: »

I do not really understand why the Vanguard SIPP launch is seen as such an event that has triggered all these comparisons with HL , and brought into focus their high fees
There are numerous reputable SIPP platforms ( all offering a big range and immediately available ) that are already cheaper than HL and have been for some time .

It's the investing equivalent of the wall-to-wall coverage of the Greggs vegan sausage roll.

If you want vegan pastries you can get them anywhere, and not just at hipster cafes charging £10 either. But Greggs is a well-known brand with high consumer loyalty. There are plenty of people who will eat a vegan sausage roll only if Greggs are offering it. Likewise there are plenty of people who will open a low-cost SIPP only if it's got Vanguard's name on it.

Brian65

like investing new money (without waiting for payment to clear first)

with iweb I don't have to wait for payment to clear (they have my debit card details).
with x-o I don't even have to make payment before trading - can invest up to £250k (which is less than I have invested) and make payment anytime before settlement day.