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Hargreaves Lansdown Changes Platform Fees For Tracker Funds

Written by Staff

November 23, 2011 12:03 (CET)

Hargreaves Lansdown, the UK-based funds “supermarket”, is introducing a new charging structure for investors holding tracker funds on its platform.

From the beginning of next year, the firm says it will replace the 0.5 percent annual fee it imposes on those investing in low-cost index trackers (which is subject to a cap of £45 a year) with a flat fee of £1 or £2 per month.

The changes were detailed in the latest edition of the firm’s Investment Times newsletter. Fees currently charged by Hargreaves Lansdown for holding shares, investment trusts, ETFs, bonds and gilts will remain unchanged.

For small investors, or those with holdings in multiple trackers, the new charging structure could lead to additional costs. But for those holding over £5,000 in a single fund, there may be a reduction in costs, potentially attracting new business to the investment firm.

Hargreaves had not levied a 0.5% annual fee on all tracker funds, however, due to commission deals struck with some providers, HSBC among them. For such funds, which had previously been offered without any annual fee, the new charges will therefore pose an additional cost for all investors.

Hargreaves said the move was necessary as the firm was unable to cover its costs on some of the cheaper tracker funds. It also said the new charging structure would allow it to widen its product range.

As part of the new fee arrangements, Hargreaves Lansdown will also start to offer Vanguard’s index funds on its platform.  Vanguard’s funds had earlier been excluded from the Hargreaves fund stable, reportedly because the two parties could not agree a commission structure.





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