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Hargreaves Lansdown eyes lower prices for online customers

Nick Paler
Written By:
Nick Paler
Posted:
Updated:
21/10/2013

Customers of execution only platform Hargreaves Lansdown are likely to get lower prices if they transact business online.

The platform – which now has almost £40bn of assets under administration following a recent surge in net new business – is yet to announce its new pricing structure, but chief executive Ian Gorham said there will likely be a difference in price depending on how clients interact with the platform.

“It is fair to say we will look to differentiate between different clients and their needs,” Gorham said. “Being online might be one thing we look at.”

Currently around 55% of Hargreaves’ clients are online, with the remainder transacting by mail or telephone.

Understandably, there is a higher cost to the business of the latter options as more staff have to be employed, and as such it is likely costs will be higher for consumers who continue to operate by phone or by post.

Hargreaves, along with every other platform, has been impacted by the Retail Distribution Review (RDR), particularly in terms of its rules on payments.

Currently Hargreaves is predominantly remunerated by fund managers through rebates, but in future no platform will be allowed to accept payments from fund groups.

Hargreaves is set to unveil its own pricing structure later this year, and the group has already said it intends to launch a tiered charging structure for clients based on their assets under management.

Gorham said the platform will not try to get around the loss of trail by any “back door” methods, such as charging fund groups for advertising, and he added no clients will miss out as a result of the move to super clean share classes.

“Clients will either get the same deal or better, as we have been able to negotiate some better deals,” he said.