PlatformsApr 23 2014

Cox hits out at Hargreaves probate charge critics

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The head of financial planning at Bristol-based Hargreaves Lansdown, the execution-only platform giant, hit back at criticism from James Daley, founder of consumer champion Fairer Finance, who criticised the company’s “excessive” costs for providing valuations and carrying out administration on certain accounts when the holder died.

Mr Cox said other platforms that were charging less for this process “had to be charging more elsewhere”, as the process was “labour intensive” and comes with a certain cost.

He said: “Valuations and administration of a customer’s estate were previously covered under what was effectively a commission-based pricing system. That process now requires a direct charge as a result of changes to platform charges, but we are reflecting that cost fairly and proportionately.”

Mr Cox also said the cost of investing “would continue to fall” as the firm continued to assess its fees. He backed up comments made by Ian Gorham, chief executive of Hargreaves, who said in an interim management statement last week that the firm would “listen to feedback” from its clients to stay competitive.

However, Mr Daley said: “We do not have a problem with companies passing on the costs in other ways. There is not a ‘keeping-the-lights-on’ charge, after all.

“It would be perfectly within Hargreaves’s gift to factor in the small percentage of clients who die each year – it could either bear the costs of administering those portfolios or ask consumers to pay an extra 0.01 per cent to cover the cost.”

A spokesman for Fidelity Personal Investing, said: “Our personal investing platform is structured with one simple fee and there are no additional charges anywhere else within the system.”

Gordon Bowden, director of Buckinghamshire-based Quainton Hills Financial Planning, said: “Costs are often hidden in the small print and people invest as a result of ongoing charges, not realising these extra fees may occur in the event of death. Also, charges for re-registering assets are often totally out of proportion to the cost of their adminstration.”

INDUSTRY VIEW
Ben Yearsley, head of investment research at Charles Stanley Direct, said: “We can provide a backdated valuation free of charge electronically, with a £5 cost if it needs to be sent out in the post. But if you need the probate service in full, there are costs depending on the work involved. We do not offer a foxed charge – we charge on a case-by-case basis.”

Direct-to-consumer platformCost of probate process
Hargreaves Lansdown

£30 +VAT per stock (min £100 +VAT, max £500 + VAT)

The Share Centre£50 flat fee
Charles Stanley DirectFree backdated valuation, price of full probate service on request
Bestinvest£10 per holding + VAT (min £50 + VAT)
TD Direct Investing£10 per holding + VAT (min £50 + VAT)
Fidelity Personal InvestingFree
Barclays StockbrokersFree