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Investment platforms clash over transfer charges

Nick Paler
Written By:
Nick Paler
Posted:
Updated:
04/10/2013

Two execution-only investment platforms have clashed over the cost of transferring stocks and funds.

Charles Stanley Direct has criticised Hargreaves Lansdown over the cost of its platform transfer charges after Hargreaves, the country’s biggest direct to consumer platform, delayed its shift to a new pricing structure.

Hargreaves chief executive Ian Gorham said earlier this week that the platform is under “no pressure” to move early in its transition to a new pricing model.

In response, Rob Hudson, head of Charles Stanley’s own D2C platform Charles Stanley Direct, said: “It is no surprise that Hargreaves Lansdown are experiencing little pressure in the transfer market given the extent of the exit fees that they charge to move off the Vantage Platform.

“It is also unsurprising that Hargreaves do not wish to convert clients to clean share classes given the enormity of their legacy book.”

Hargreaves currently charges £25 to transfer a holding in a stock or fund, meaning costs can quickly increase if a client has a large number of holdings they wish to transfer to another platform.

Clients can cash their holdings in for nothing and move the proceeds over free of charge, but this often has tax implications.

Charles Stanley itself charges £10 per stock or fund holding to transfer to another platform, but said it is reviewing this fee.

A number of platforms – including Skandia and Fidelity FundsNetwork – do not charge anything for transfers.

Hudson added: “We believe that new and existing clients will benefit most from reduced charges and better performance by being afforded access to reduced Annual Management Charges and low, transparent service fees.”

“This is, after all, the direction of travel for all private investors. We continue to build our business based on providing ‘the fairest deal for the private investor’ and looking to the future.”

Hargreaves Danny Cox said the platform was reviewing all its charges, including transfer fees.

Cox said: “Hargreaves Lansdown has always offered clients the opportunity to transfer out as stock when many platforms only did so when compelled by law. The very few clients who do wish to transfer out can do so in cash for free, and the charge for stock transfers is competitive and reflects the work undertaken.

“The growth in the numbers of clients we attract and the exceptional levels of client satisfaction and retention show we offer clients a market leading service at a highly competitive price.

He added: “Our negotiations with fund groups aim to provide clients with the best funds at the best prices. This work is ongoing and we expect to announce more news later this year.”