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Hargreaves shows its muscle after Vanguard launch

Hargreaves shows its muscle after Vanguard launch

by Charles Walmsley May 18, 2017 at 10:18

Hargreaves Lansdown (HRGV) attempted to put the threat of Vanguard's retail launch behind it today with a strong trading statement showing the investment broker enjoyed a strong start to the year.

The Bristol-based firm saw assets under administration jump £7 billion to £77 billion in the first four months of the year. Just over half of this increase (£3.7 billion) was due to rising stock market lifting the value of investors' accounts with the platform attracting £3.3 billion of new money on top.

The level of inflows was £1 billion higher than a year ago, helped by the launch of New Woodford's new fund, the government's lifetime ISA and a raise in the amount that investors can shelter in individual savings accounts,

The company is also helping itself with clever marketing of itself as a one-stop shop for people's pensions and investments.

'The group's flows have also benefited from its increased digital marketing presence, including the launch of our new smart phone apps, and transfer activity as our clients continue to consolidate their wealth onto our platform,' the company added. 

The funds supermarket attracted 56,000 new customers to take the total to 932,000 in April. 

Net revenue for the financial year to date was £315.7 million, 17% higher than at the same point last year.

Chief executive Chris Hill said the company meant was well positioned to take advantage of 'the structural growth opportunity in the UK savings and investments market'.

The company also announced that chairman Mike Evans would step down later in the year when a successor had been found. Evans joined Hargreaves as a non-executive director in 2006 before becoming non-executive chairman in 2009.

He said: ‘Chairing Hargreaves Lansdown over the past eight years has been a real privilege. I have seen the group grow significantly and establish itself as the UK's leading retail savings and investments platform.'

One of his last roles was the recruitment of Hill, the former chief financial officer of IG Group who replaced Ian Gorham as chief executive last year.

In a falling market Hargreaves Lansdown (HRGV) shares slipped 23p or 1.7% to £13.24. They have fallen nearly 9% this week, largely in response to US tracking fund giant Vanguard launching a low-cost investment website at DIY investors on Monday. 

Jefferies equity analyst Phil Dobbin maintained a 'hold' rating on the shares, saying Hargreaves had beaten its forecasts

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Comments  (35)

  • Joe Soap: 

    HL have had things all their own way until now. I wonder if Vanguard have the clout to change that? I think they may well, but only if they want to.

    For my part, I have so far - Moved 1 SIPP/ISA away from HL. Withdrawn all the money and closed 1 ISA/Trading account. And I am about to move 2 more SIPP/ISA accounts away from them. I know they don't care, but it makes be very happy to be giving them no more of my families money for doing almost nothing (most of the time).

    12:13 on 18 May 2017

  • Mickey: 

    Vanguard will undoubtedly hurt HL but it will also hurt other platforms running with UK staff. Perhaps Vanguard will cause HL to cap or lower its fees for holding funds but if you only want to hold Vanguard stuff then their own platform makes a lot of sense. Personally I am staying with HL where the cap on fees for non-fund holdings makes them the best choice for me.

    13:16 on 18 May 2017

  • Hampshire cynic.: 

    Vanguard's offerings may SEEM to be cheap, but who are they and what track record can they demonstrate? I for one prefer a known UK platform and HL do offer a lot of different fund manager's tried and tested UTs, many of which have specially lowered charges for HL clients.

    If HL feel the need to reduce their fees that would be good as long as their excellent research and service levels are kept. They do have an increasing potential to do something given their economies of scale!

    15:55 on 18 May 2017

  • citymoke: 

    As mentioned on a separate thread that talks about HL's charges, I'm in the process of moving ALL my ISA funds from HL to iWeb. I've calculated that I'll be saving about £650 per year by doing this move.

    16:31 on 18 May 2017

  • RL: 

    If you pay peanuts you get monkeys

    17:31 on 18 May 2017

  • Richorse11: 

    As a serious investor I think HL are great. You get what you pay for . HL may not be the cheapest but in terms of value for money I cannot fault them. I do not know anything about the Vanguard service but I went to the launch of another company trying to take on HL and it was a pathetic offering in comparison; they talked about their low fees and when I saw the price the funds were charging on this platform it was alot more than HL so it netted out more expensive.

    17:47 on 18 May 2017

  • citymoke: 

    RL - I've had investments with iWeb for many years now and I've been very happy with their service and charges. I moved most of my investments to HL just after I retired more for convenience than anything else, but now it's become clear the different charges between each platform which now makes it a lot easier to make comparisons and have decided to take the plunge and move from HL to iWeb. My private pensions are still with HL however for the time being, but I may yet move those as well, but the saving isn't as great as it is with moving my ISA funds.

    18:49 on 18 May 2017

  • Trevor Pick: 

    If Richorse11 is a serious investor why use HL and pay high fees when you can get as much info. from Trustnet free, if you look at where HL get there info. from its from F E Trustnet.

    20:07 on 18 May 2017

  • Joe Soap: 

    You can access all of HL website without being an account holder. Without an account the only thing you cannot do is trade. Why anyone would pay the usurious charges is simply beyond me. Their "research"? FFS! It is NOT research, it is MARKETING!

    00:50 on 19 May 2017

  • citymoke: 

    Joe Soap - spot on!

    01:20 on 19 May 2017

  • Joe Soap: 

    Has anyone here read the "HL" research on Terry Smith? It is so far off the mark it is beyond being laughable.

    Why is that so? Smith will not cut HL a deal on his funds.

    01:32 on 19 May 2017

  • sarah b: 

    I do hope that H_L will take note of comments about lowering their charges as Vanguard will be a massive competitor to them

    10:08 on 19 May 2017

  • citymoke: 

    iWeb and others have been competitors for quite some time now but folks just haven't realised it because the publicity machine has been all about HL whereas platforms like iWeb have had very little exposure to the general public. Whenever any 'expert' is interviewed on the TV news about financial matters it's very often an HL spokesperson who is interviewed. Good free publicity for the public to be made aware of the existence of HL!

    10:24 on 19 May 2017

  • chubby bunny: 

    @Hampshire cynic. - Vanguard are the world's second largest fund company, with over $4.3 trillion in AUM.

    10:48 on 19 May 2017

  • Richorse11: 

    How does Trwevor Pick know what fees I pay. Even my wife does not know this!. Stupid man.

    13:36 on 19 May 2017

  • Franco: 

    I have shares in HL and I can objectively tell you they are the best platform.

    18:29 on 19 May 2017

  • Sibob: 

    The more you have invested with HL the more you pay in fees, could anyone explain to me why it costs substantially more in fees for someone with a million pounds invested than someone with say £100,000, personally I am unable to see a direct cost relationship and am unhappy with the fact that the fees charged are simply linked to the value of the money being invested, it does appear that this is more of a benefit to the the Wealth Manager and the shareholders of Hargreaves Lansdown as opposed to the clients, without whom there would be no business.

    11:34 on 21 May 2017

  • Hampshire cynic.: 


    Vanguard may just be one of the biggest investment companies in the world, but what is their track record is the real question? I suspect that they will only offer their own managed funds unlike HL where you can, if you avoid their own 'fund of funds', have a spread of investment expertise on offer in specially discounted UTs or ITs.

    I do agree with Sibob that there is some room for a reduction in HL's fee structure, perhaps a modest flat annual fee plus a structured percentage fee based on size of holdings, but these being much less than the 0.45 and 0.25 etc rates currently in place. As a shareholder I accept that change is needed but I am convinced that the extra business a new deal would bring would guarantee a much greater market share for HL at little exra operating costs.

    13:39 on 21 May 2017

  • David 111: 

    Sibob - you say that the more you have invested with HL, the more you pay in fees. This only applies to investments in unit trusts and oeics. Investments in shares (including investment trusts) and etfs (both of which in my view are preferable to unit trusts/oeics anyway) have their charges capped by HL, so the more you invest, the better value it becomes.

    20:54 on 21 May 2017

  • citymoke: 

    Yes, I think platforms should charge a flat rate whatever the investment type, be it unit trusts, investment trusts, shares or whatever. To charge customers a percentage of the total value of their funds is unfair in my opinion. At the moment, I'm paying back to HL approximately 10% of the amount that I receive per annum in dividends from my investments.

    That is all going to change very soon of course!

    21:03 on 21 May 2017

  • Sibob: 

    If only your comments were correct David 111, even though I have negotiated a reduced platform charge, it is still percentage based and covers all holdings, you can then add your trust charges (capped at £200) to this.

    Annual management charges

    Shares, investment trusts, ETFs, gilts & bonds

    Fund & Share AccountNo charge

    ISA0.45% a year (capped at £45 a year)

    SIPP0.45% a year (capped at £200 a year)


    This charge applies to each Vantage account separately. It is tiered within bands: 0.45% per annum on the first £250,000 of funds; 0.25% for funds between £250,000 and £1m; 0.1% for funds between £1m and £2m, and no charge on the value of funds over £2m.


    £0 - £250,0000.45%

    £250,000 to £1m0.25%

    £1m to £2m0.10%

    Over £2m0.00%

    CashNo charge

    02:13 on 22 May 2017

  • Joe Soap: 

    OK here is a simple real life example of HL's charges, this was my account before I moved away from them.

    Unit trusts/OEICs -

    SIPP GBP 250,000 x 0.45

    ISA GBP 150,000 x 0.45

    Therefore GBP 400,000 x 0.45 = GBP 1800. A very cool GBP 150 a MONTH to HL for doing what exactly, day to day? Almost nothing. And before anyone queries the way they charge SIPP and ISA on the same account, yes that is how they do it.

    HL refused to cut me a deal on charges so I moved to II. They charge GBP 176 PER YEAR for exactly the same SIPP/ISA account. Out of that GBP 176 I get eight "free" trades a year which generally covers my needs.

    HL now get NOTHING from me, I am very happy and I can use the whole of HL's website as much as I like without paying a penny. Makes me even happier, though to be honest, there is little there worth bothering with that you can't find elsewhere.

    02:33 on 22 May 2017

  • Sibob: 

    David 111 please ignore the above post and accept my apologies you are correct, I normally just type what comes into my head and then edit! I find these boxes to small to read what I've written and edit when the box is full (I'm on an IPad) suffice to say that there is not always a similar investment trust for an investment that I may wish to make, and in certain situations the increased volatility of investment trusts which is not a problem when investing over the long term can be problematic over the short term. I am yet to be convinced why HL can't cap charges on all investments!

    03:27 on 22 May 2017

  • kenneth douglas: 

    Hi. I have read you comments on HL with interest. My wife and I have been with HL for 16 years, they provide an excellent service, bar none, although we have both lost out following their advice, sorry recommendations on two occasions. Our problem now however, is our holdings have increased to the point where their costs have become noticeable. The first thing is, they no longer provide Loyalty Bonus, the FCA stopped it, I did not know this, and I queried, why had HL not reduced the 0.45% charges to compensate, there was no answer, so it seems more profit for HL. I am in the process of looking for a cheaper broker, Investor and Iweb seem to be the best options. If you good people have any views or advice I would appreciate your help.

    11:29 on 22 May 2017

  • Joe Soap: 

    Without a doubt, at the moment the best % fee platforms are Cavendish and Close Bros. Both are 0.25%.

    For flat rate fees, II or Alliance are the best bets.

    11:32 on 22 May 2017

  • Sibob: 

    You can negotiate 0.25% across all holdings with HL in certain situations, it's still too much if it's uncapped in my opinion.

    11:40 on 22 May 2017

  • Joe Soap: 

    HL resolutely would not negotiate with me. Me and my family held > GBP 500k with them. So now, they get nothing at all.

    11:42 on 22 May 2017

  • RL: 

    This debate quite rightly focusses on costs which is the one element that can be controlled in the long run.

    However we should be aware that index tracking funds have serious dangers, especially as they have come to dominate the market. When you invest in them now, after a long bull run, you are automatically overweighting the stocks that have already done well. Is that a recipe for good long term performance? I doubt it very much.

    There is a bubble going on here that we are failing to recognise. Capital is being misallocated on a grand scale. We can't do anything about the system as individuals, but as individuals we can step out of the way.

    So Vanguard may be good and cheap at what it does - but avoid its products!

    12:56 on 22 May 2017

  • citymoke: 

    Kenneth Douglas - I suggest you read all my above previous posts regarding my imminent transfer of all my ISAs from HL to iWeb and the reasons for me doing so.

    12:59 on 22 May 2017

  • kenneth douglas: 

    citymoke - Thank you, I have read all the posts, very interesting.

    I have carried out research, there are a number that I like, although they are still pricey, and if I am going to leave HL, price is one of the main considerations.

    I have two that I really like, Interactive Investor and iweb and the people I have spoken to have been very helpful. Two of my remaining concerns, are the availability of a good cross section of Funds, Trusts etc., and the cost of initial fees, would they be more expensive be course of lower running costs.

    Any further information or views available regarding the two Brokers mentioned, I would very much appreciate the input.

    19:11 on 22 May 2017

  • citymoke: 


    As expected, the transfer of my ISA's from HL to iWeb is not going as smoothly as I'd hoped. What folks need to know is that iWeb is ONLY a broker and NOT a platform company like HL is. iWeb utilise Cofunds as their platform to hold clients investments. The problem is that two of my funds that I already hold with HL (Woodford Equity Income and Newton Global Income) cannot be transferred as they don't meet iWeb's trading criteria (don't know why that is at the moment). Another fund can only be sold and not purchased (Liontrust European Income) and the fourth fund that cannot be transferred is the Threadneedle UK Equity Income Fund. IWeb just say about this one that the Threadneedle Fund Manager won't allow the transfer away from HL No idea why!

    So the only three items that ARE allowed to be transferred are my Artemis Income Fund, my Blackrock Continental European Income Fund and my investment trust, the Scottish American Investment Co plc.

    So, I'm just going with those three for the moment and not the other four which will have to stay with HL.

    17:01 on 26 May 2017

  • Anonymous 1: 

    Hi citymoke I had a problem moving from HL to Trustnet Direct it all depends which class the fund is in I sold the funds and HL transferred in cash I then repurchased them again in another class. I saved a fortune by moving from HL.

    19:52 on 26 May 2017

  • citymoke: 

    Anonymous 1 - ok, but I'd rather stick to the same class. Maybe at sometime in the future iWeb/Cofunds will hopefully expand their choice of funds and accept the exact funds that I have remaining with HL and then I can transfer.

    20:14 on 26 May 2017

  • kenneth douglas: 

    Citymoke, sorry to hear of your transfer problems, although not so surprised. I have had further discussions with Interactive Investors & Iweb. When the questions became more involved in detail, I was directed to Trust Pilot forums, the posts gave very mixed reviews. Problems with long winded transfers, money misdirected, admin problems regarding a clients identities, overall, not so professional, although there were a few clients that expressed satisfaction for both Brokers. My fear is, my lack of in depth knowledge, regarding the admin and funds / trusts in question, will lead me into costly problems. May be in trying to cut costs, a more half way house would be a better preposition for me. cheaper, but still within the realms of professionalism of H&L.

    20:58 on 27 May 2017

  • citymoke: 

    Kenneth Douglas - I am happy that HL checked with iWeb first of all to see if my funds were elligible to be transferred. I've opted for the transfer of only the two funds and the one investment trust to be transferred and the remaining four funds to stay with HL. Maybe sometime in the future Cofunds will accept all funds as they expand their trading requirements accordingly.

    21:11 on 27 May 2017

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