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.
Comparisons
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)
| Portfolio size | £10k | £20k | £50k | £100k | £250k | £500k | £1m |
| 0.45 | 0.45 | 0.45 | 0.45 | 0.45 | 0.35 | 0.20 |
Competitors - SIPP (% charges)
| £10k | £20k | £50k | £100k | £250k | £500k | £1m | |
| Charles Stanley | 1.45 | 0.85 | 0.49 | 0.37 | 0.3 | 0.27 | 0.21 |
| Interactive Investor | 2.44 | 1.22 | 0.49 | 0.24 | 0.1 | 0.05 | 0.02 |
| AJ Bell | 0.9 | 0.75 | 0.5 | 0.35 | 0.14 | 0.07 | 0.03 |
| 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)
| £10k | £20k | £50k | £100k | £250k | £500k | £1m | |
| Interactive Investor | 1 | 0.5 | 0.2 | 0.1 | 0.04 | 0.02 | 0.01 |
| ClubFinance | 1.2 | 0.6 | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 |
| Charles Stanley | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.2 |
| AJ Bell | 0.7 | 0.45 | 0.3 | 0.25 | 0.1 | 0.05 | 0.02 |
| ATS | 2.15 | 1.08 | 0.43 | 0.22 | 0.09 | 0.04 | 0.02 |
| The Share Centre | 1.58 | 1.15 | 0.46 | 0.23 | 0.09 | 0.05 | 0.02 |
| AXA Self-Investor | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.50 | 0.5 |
| Nutmeg | 1 | 1 | 0.75 | 0.6 | 0.5 | 0.3 | 0.3 |
