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March 14, 2014 6:10 pm
Investors with large sums have been able to negotiate lower charges through fund supermarket Hargreaves Lansdown, as competition to attract clients intensifies among platforms.
Hargreaves, the UK’s largest fund supermarket with nearly 600,000 clients, has cut fees or waived some charges to accommodate specific investors to retain them.
“We’ve had some high-value clients with very specific requests,” said Tom McPhail, head of pensions research at the firm. “We’ve been able to accommodate them.”
He said Hargreaves is keeping the controversial exit fees it charges under review and expects “costs to come down” in time, although he stressed it has no immediate plans to reduce the fees, which rivals have criticised.
As part of its new pricing structure, the broker is introducing a £25 plus value added tax exit fee for investors looking to close their accounts from June 2. Investors transferring out as cash will also pay £25 from June. Those transferring as stock – known as “in specie” transfers – are already charged £25 per holding.
Mark Polson, principal of platform consultants Lang cat, pointed out that the City regulator states that consumers must not face unreasonable post-sale barriers to changing a product, switching provider, submitting a claim or making a complaint.
“If a provider absolutely must impose a customer penalty of this kind, we think that cost should be around £1 per line of stock. It should certainly not be 10, 20 or even 25 times that amount.”
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