Hargreaves defends charging £2 a month for tracker funds

Hargreaves Lansdown plans to charge investors who hold certain tracker funds on its Vantage platform a flat fee of up to £2 per month, compared to the current annual rate of 0.5%.

The flat fees will be introduced from 31 December. Some investors have complained the switch will make certain index tracker funds more expensive than costlier managed funds. Where a fund currently attracts a fee of 0.5% a year in the ISA and SIPP, the platform fee will be £2 per month, per holding, and apply to the Vantage ISA, SIPP and Fund & Share Account. A platform fee of £1 or £2 will also apply to a small number of funds for which Hargreaves currently do not make a charge, such as the HSBC FTSE All Share Index. The Fund & Share Account had been free but the new platform fee ...