Hargreaves Lansdown

[Mark Bentley]

In reply to reply #16801

Ok – that makes sense then. No reason to suspect any “funny business” going on!

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[Cliff Weight]

Investors Chronicle wrote up the chronic service problems of the platforms see https://www.investorschronicle.co.uk/news/2021/02/22/platform-service-creaks-with-customer-surge/ and included this quote from Cliff Weight of ShareSoc:

Cliff Weight, director of individual investors campaigning group ShareSoc, said “Hargreaves Lansdown’s customers having to wait 34 minutes to talk to someone is awful and should be unacceptable. The Financial Conduct Authority and the Competition and Markets Authority looked at platforms a couple of years ago, but seemed to have allowed high cost, poor service, quasi-monopolistic behaviour to continue. They need to go back and have another look at platforms.”

[Phillip Moores]

Hi,
I wonder if anyone can educate me on the Hargreaves’ philosophy of charging on funds but not shares (including ETFs). It makes it appear that its significantly better value to hold ETFs rather than funds*, but I suspicious this isn’t the whole picture.

How come platforms treat funds differently?

* at least for low-trading, buy-and-hold investors.

[Colm Maguire]

As you realise, no fees to trade funds.
As I invested more and more in funds in my SIPP the costs went up steeply. I kept my funds in my SIPP and shares in my ISA. In the end I moved the SIPP to another platform but not the ISA. I wonder if HL think that investors get tired o stockpicking and move into funds as a result.
Certainly customer inertia is one reason why HL makes so much profit.
uk.stockbrokers.co/compare is useful

[Mike Dennis]

In reply to reply #17244

Hi Phillip.
Good question. I know of no good reason why HL charge such a high custody fee on funds but not on other holdings. I believe its a hangover from the “old days” when fund transactions and holdings were treated very differently to those in shares or ETFs. The whole fund market and supply chain used to be an opaque system of charges and commissions which the average investor found difficult to understand but who ultimately paid the price for this opacity. RDR sorted out a lot of this and created “clean” funds where brokers no longer received back commission from fund managers. But there still remained a difference between trading and holding (custody) charges for shares and those for funds. With the increasing use of online trading platforms for both shares and funds, it has brought these differences into stark relief because the user perceives no obvious difference between the two that could justify the difference in charges.

Many brokers now charge exactly the same fee structure for trading and holding shares and funds (for example, Interactive Investor) which tells you all you need to know about the relative underlying costs associated with trading and holding both assets. I therefore think the main reason that HL continue to resist this simplification is that their business is heavily biased toward customers who have modest portfolios consisting mainly of funds which they trade very infrequently. So, to change their fee structure for funds to the same as shares would be commercial suicide. So, as long as the majority of their customers continue to tolerate this fee structure and choose not to switch to a lower cost broker, the longer HL will hang onto it.

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[Peter Reiss]

My wife has used HL for many years and as she does not trade very often, they provide a satisfactory service. I look after her investments and my chief beef with them is their insistence on running separate Capital and Income accounts. I have never been able to fathom out the reason and as I run a number of portfolios at home, carefully logging all entries, including dividends as they are declared, with dedicated bank balances for each, reconciliation with HL takes a lot of time and head scratching. It was for this reason that before the IPO when Barclays decided to ruin a good service (I Had been with them since the late 1980’s) I moved my substantial ISA to AJ Bell. Whilst there have been a few glitches along the way, they do listen to constructive criticism and respond swiftly to problems.

[Cliff Weight]

See also https://www.sharesoc.org/blog/brokers/buying-selling-and-voting-us-shares/

[Mike Newman]

I moaned about HL on this thread earlier this year and HL are just getting worse! I agree entirely with Peter Reiss above. My wife’s ISA and SIPP are with HL (I will be moving both out v soon). I manage her accounts and I and have been getting more frustrated with HL’s lack of customer information and failure to provide a daily running balance (like all my own brokers do) so with both separate income and cash tabs, obtaining a cash balance on any day, current or past is either difficult or impossible. All HL need to provide is another tab listing the opening balance, cash out, cash in and closing balance, like their competitors do! We have just moved the cash free 25% out of my wife’s SIPP and HL made a pigs ear out of the process! When I did the same for my own SIPP, the tax free cash moved to my bank account, the same day. With HL it has taken nearly two weeks and several ‘phone calls and I’m further frustrated by not being able to speak to anybody who knows what is going on with the ‘simple’ business of taking the tax free cash out of the SIPP. HL are now like Barclays who destroyed their stockbroking division and now only allow customers to speak to unknowledgeable telephone answering staff and not to the department that you need to speak to. I’m moving my wife’s ISA to IG’s share account service and I’ll move her SIPP soon as well. I’ve had an IG spread betting account for many years and I’ve heard good reports about their share account facilities and service, so fingers crossed!

[Mike Newman]

While I still have this thread open, can somebody explain why they bother to ‘invest’ with funds and not Investment Trusts? The later consistently perform better, there’s is never going to be a Woodford effect with IT’s. Funds have traditionally hidden their costs which even now are hardly transparent. Many web sites and graphing packages show the performance of IT’s but not funds. Funds can’t be sold quickly so if a market/fund is falling rapidly it generally takes a minimum of a day to sell and another to get your money whereas IT’s trade instantly allowing the ability to use that cash for a different trade at the same time. Funds to me are for fund managers to profit from whereas IT’s allow the customer more trading freedom at a lower cost.

[Mike Dennis]

In reply to reply #18851

Hi Mike
Sorry to hear about your issues with HL but thanks for sharing them with us. Its usesful to know what’s going on so we can help everyone make better choices and maybe also encourage brokerages to better performance. Don’t forget to post your comments on your experiences of transferring to IG in the IG forum here – https://www.sharesoc.org/forums/topic/ig/

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[Mike Dennis]

Mike – you asked if somebody can explain why people bother investing in Funds rather than Trusts. Its not very clear to me either. Perhaps the two most obvious advantages the funds might claim over trusts are firstly they don’t gear so they can be more stable which appeals to those who might be worried by higher volatility. And secondly, for those investing small amounts each month, the trading costs are usually zero whereas they are usually higher for investment trusts. Can’t think of any more advantages but someone else might…???

[Robert Meadows]

I have been a very contented user of the HL platform and service for a number of years.

Since end 2022 I have experienced very poor service, slow response and an apparent lack of Main Board interest in communicating with a customer.

In brief, for a premium priced “investor service” in January 2023 I was not able to get through on the telephone from abroad; secure message queries where taking a week or more to get answered, one of my holdings was showing an incorrect £40,000 loss on my account , it took me up to 20 mins to get a phone answered and then a reply suggesting that the people to help me were unavailable.

I email their posted Board secretary asking to speak to a Board Director to ask if the Board was aware of what was going on in the business. So far, I was given a multi channel director who explained that they were changing to different software for the platform (clients paying premium fees were not informed) , they were short of staff due to their internal policy of encouraging young people to move for change of role and/or promotion hence leaving them understaffed in dealing with customers, the Director had presented to the Board and been given support to recruit additional staff but this was slow due to the aftermath of the pandemic.

In parallel, HL have invested significant sums and people in moving from being an “investor service provider” to becoming and investment opportunities marketing company and provider.

I emphasised that I had asked to speak with a Main Board Director and so far, despite follow up calls on my part, this has not been set up.

Although the telephone service has been improved, they have moved to a recorded message optional choice system which keeps trying to aim the caller off speaking to someone appropriate indicating ares of their site to view.

This in my experience is a sad move from being a premium service provider focused on clients to, an organisation that is seeking to build revenues in adjacent areas at the expense of its clients. the Main Board being inaccessible has led me to sell my holdings in other companies.
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I would be interested to know whether i am alone in experiencing this degradation in customer service and access which is all the more concerning in these times of high market volatility

[Mark Bentley]

In reply to reply #24549

Thanks Bob, I’ve moved your post to the appropriate forum and existing topic that discusses Hargreaves Lansdown.

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[Mike Newman]

In reply to reply #24553

Hi Bob
Yes, I’ve also experienced appalling customer support people at HL recently. If it wasn’t so time consuming, stressful and expensive I would take my wife’s account out of HL. But because trading there is infrequent, I’ve left that headache for another day!
My wife’s account has been with HL for too many years to remember and when it was set up, I sent a letter, signed by my wife, to say that I would be managing and trading the account for her and for many years that has worked OK in that the occasional phone call has been handled correctly.
A couple of month’s ago, I phoned HL to check on a trade and was met with a demand to speak to my wife – no problem normally except she was out at the time – and although I explained that they had a letter from my wife the low intelligent person informed be that I had no right to trade her account and he switched off access to her account FOR BOTH ME AND MY WIFE!!! What’s more it took nearly 3 weeks of daily phone calls and messages before some sense of intelligence reversed the situation. That compounded with HL’s refusal to show all transactions in the transaction page of their web site and not to have an account balance against every input and output (Like most brokers and every personal bank account) will result in me moving her account to a better and cheaper one when I have a few weeks to spare -moving out of the Barclays chaos 3 or so years ago took 18 months!! So I’m not yet pumped up enough quite yet.

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