After revealing it will charge new fees [1] for holding HSBC index trackers and certain other funds from December 31st, some customers of Hargreaves Lansdown seeking cheaper alternatives are looking more closely at the switching fees it levies for exiting its platform.
We have now clarified with the company that the fee is charged on a per fund basis for ISA and fund & share accounts, but it is a flat £75+VAT fee for SIPPs.
Hargreaves Lansdown switching fees
- £75 plus VAT (flat rate)– SIPP account
- £25 plus VAT per fund – ISA account
- £25 plus VAT per fund – Fund and share account
One Monevator reader has reported that the company told him it may ‘refine’ these charges depending on customer response.
In the case of the per-fund fee account types, you may want to investigate consolidating multiple funds into one fund – or even into cash, if you’re prepared to risk missing a move in the market – before making the switch, to bring down your fees. I’d suggest you check the small print and for look for additional fees – and also give Hargreaves Lansdown a ring – before taking any action.
Personally, I’d also wait for the dust to settle before deciding to move from Hargreaves Lansdown and paying these switching fees.
At the least, do the maths to work out the impact of the new platform fees on your total expenses before making any move – it will be substantially less for larger portfolios, due to the fixed per fund nature of the platform fees.
Also keep in mind that any ultra-low cost platform today is likely to be pricier at some point in the future, as providers seek to recover the revenues they’re set to lose from the end of trail commission following the upcoming implementation of the Retail Distribution Review.