Hargreaves rolls out ‘odd’ passive platform charge

Hargreaves Lansdown has amended the annual charges for some, mostly tracker, funds within the Vantage Investment Supermarket, replacing the 0.5 per cent annual change it makes on a few funds with a flat platform fee of £1 or £2 per holding, per month.

Hargreaves pointed out that the fee will only apply to a “minority of funds”, most of which are passive funds, as it will remain free to hold over 2,400 funds, which accounts for 97.3 per cent of funds its clients hold in the Vantage platform.

Where applicable, the charges for shares, investment trusts, exchange traded funds, bonds and gilts will remain the same.

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Danny Cox, head of advice at Bristol-based Hargreaves, said this means Hargreaves can increase the range of funds offered and keep its charges “competitive”.

He said: “We will introduce the new platform fee on 31 December 2011. Where a fund currently attracts a fee of 0.5 per cent a year in the Isa and self invested personal pension, the platform fee will be £2 per month, per holding, and apply to the Vantage Isa, Sipp and Fund & Share Account.

“A platform fee of £1 or £2 will also apply to a small number of funds for which we currently do not make a charge such as the HSBC FTSE All Share Index.

“These changes are designed to help us continue in our aim of providing our clients with the widest range of investments, and the best value, of any investment supermarket in the UK.”

Martin Bamford, managing director of Surrey-based Informed Choice, thought the amendment was “a little odd”.

He said: “It is a little strange that it’s per fund holding and not a flat platform charge. This is a little bit odd as most charge a flat platform fee.

“Passive fund charges do not include adviser or platform remuneration, which is often overlooked, and that can make them look cheap compared to others.”