Hargreaves Lansdown has unveiled its long-awaited clean pricing model - but how does the new fee structure rank against other D2C offerings?
Earlier today, the platform giant revealed a tiered charging structure with four main levels, each free of switching costs:
- 45bps for clients with fund investments under £250k;
- 25bps for investments of £250k to £1m;
- 10bps for £1m to £2m;
- No charge for investments above £2m.
These charges work on a cumulative basis: an investor with £500k in assets, for example, will pay 0.45% on the first £250k and 0.25% on the next £250k.
Investment Week has compiled a list of the biggest players in the execution-only market, sorted by the charging level for the crucial £50k segment.
It is this grouping, of clients with investable assets £20k-£50k, in which a significant proportion of Hargreaves' customers are found, according to analysts at Barclays.
The tables below suggest Hargreaves' pricing is competitive at that level - particularly for SIPP business - though this falls off at the next leg up (clients with assets of £50k-£100k).
All figures are based on a ten fund portfolio with 50% turnover a year and include switching charges, wrapper charges and dealing costs.
Companies which have yet to announce post-March 2014 unbundled pricing models, such as Barclays and Fidelity, are not included.
Hargreaves: SIPP/ISA (% charges, cumulative basis)
Competitors - SIPP (% charges)
|Alliance Trust Savings||3.11||1.56||0.62||0.31||0.12||0.06||0.03|
|The Share Centre||2.73||1.72||0.69||0.34||0.14||0.07||0.03|
ISA (% charges)
|The Share Centre||1.58||1.15||0.46||0.23||0.09||0.05||0.02|