You are here: Home - Investing - Experienced Investor - News -

Hargreaves Lansdown to scrap controversial exit fees

0
Written by: Emma Lunn
19/09/2019
The online investment platform has announced a simplification of its fee structure, and removed nine fees.

Hargreaves Lansdown will no longer charge admin fees when a customer sells stocks or funds, or moves money elsewhere.

Hargreaves Lansdown has been under pressure regarding fees following its involvement in the Neil Woodford debacle. In June it agreed to waive its platform fee on the Woodford Equity Income fund while trading in the fund is suspended.

Hargreaves Lansdown clients had been major supporters of the Woodford funds: according to the most recent set of accounts, Hargreaves Lansdown holds 31 per cent of the Equity Income fund at 31 December 2018 and 62 per cent of the Income Focus fund.

Danny Cox, spokesperson for Hargreaves Lansdown, said: “Putting the client first is always our priority and cutting our fees is an important step as we seek to improve our service year on year. Our new tariff is simple, transparent and great value for money.

“From now on, online clients will simply pay a platform service fee, and for their share deals, and nothing else. Last year, we cut our overseas dealing charges and negotiated an extra £7m worth of savings on fund charges for our clients. Now, we’ve removed all of our other incidental administration charges.

Cox confirmed Hargreaves Lansdown had removed exit fees and called upon other players in the industry to do the same. He said the firm had invested heavily in electronic transfers, which can be completed more quickly and cheaply than manual paper-based transfers. About 60 per cent of transfers to Hargreaves Lansdown can now be done electronically, up from around 30 per cent a year ago.

“We continue to support a ban on all exit fees, provided this is industry wide and not just confined to platforms, which would distort the market,” added Cox.

The Hargreaves Lansdown fees that have been reduced to zero include:

  • Internal stock transfer fee (previously £12.50 per holding)
  • Government actuarial department calculation fee on pensions (previously £75 plus VAT)
  • Fee to transfer a nominee shareholdings to a certificate (previously £25 per holding)
  • Transfer fees (previously £25 per holding or for cash)
  • Account closure fee (previously £25)
  • Early account closure fee on a pension (previously £295)
  • Charge to reinvest fund income (previously 1 per cent of the trade value with a minimum of £1, and maximum of £10)
  • Charge to sell funds to pay outstanding fees (previously £1.50 per fund).

Rival investment platform Interactive Investor welcomed the news that Hargreaves Lansdown is to scrap exit fees.

Richard Wilson, chief executive of Interactive Investor says: “This is a very welcome move for investors. We have long argued that exit fees are a recipe for rip offs and a barrier to competition. Now a much more competitive market place can start to open up.

“This move throws down the gauntlet to the wider industry, which has dragged its heels on this issue. As we await the regulator’s final decision on exit fees, let’s see if other major platforms can call time on exit fees without further arm twisting. What we would like to see is an outright ban on exit fees for existing customers, not just new business going forward. It is the only right thing to do.”

Interactive Investor announced that it was permanently removing exit fees in November 2018 and has not charged exit fees since December 2017.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week