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Hargreaves Lansdown, the UK’s largest “DIY” investment site, is reducing fees for about half its customers as competition in the industry heats up.
The Bristol-based company said it will cut its annual account and share-dealing fees, but add a charge for fund trading in its first overhaul of pricing for more than a decade.
The move will cost Hargreaves, which is now owned by private equity firms including CVC Capital Partners, tens of millions of pounds.
The changes will take effect from March and mean almost half its 2mn-plus customers are expected to be better off, the firm said. However, one customer in 10 will pay up to £1 more each month, with 3 per cent having to fork out an extra £10 or more.
Fund trades will incur a new charge of £1.95, although customers who have a monthly automated investment set up will be exempt.
The fee overhaul comes as competition in the sector intensifies. Big financial services companies such as JPMorgan Chase have entered the fray, while digital upstarts including Robinhood have expanded their offering.
Richard Flint, chief executive of Hargreaves Lansdown, told the FT the move was “more about us reinvigorating the business”, adding: “Competition has been developing for quite a long time and it’s not a surprise — it’s coming in many different forms.”
The company, which pioneered selling funds directly to investors, was founded in 1981 by Peter Hargreaves and Stephen Lansdown and floated on the London Stock Exchange in 2007.
A consortium of private equity firms comprising CVC, Nordic Capital, and Platinum Ivy, a subsidiary of the Abu Dhabi Investment Authority, took control in a £5.4bn deal that completed last year.
The firm’s platform fee, or “headline” account charge, will fall from 0.45 per cent to 0.35 per cent. Share trading fees will be reduced from £11.95 to £6.95 per trade, although fund dealing will incur a charge of £1.95 unless part of a regular saving plan.
Other changes include a reduction in fees for ready-made pension plans — investments managed by Hargreaves. The total fee on this product will fall from 0.75 per cent a year to 0.45 per cent.
The last time the company overhauled its fees was in the wake of the Retail Distribution Review in 2014. This regulation stopped fund supermarkets from taking commission from fund providers for selling their products.
Earlier this month, Hargreaves Lansdown announced that Flint would be stepping down to become deputy chair, with Matt Benchener joining from Vanguard to take over in July.