Hargreaves Lansdown has called for an industry-wide ban on exit fees as it scraps nine of its investor charges, including the controversial fee to leave.
The platform, which announced the changes today (September 19), has removed nine fees in total including transfer fees, reinvestment fees and charges to sell funds.
The company cut overseas charges last year but has today removed all ‘administration’ charges so investors will only pay a platform service fee and for their share deals.
This means fund investors will pay a fee of up to 0.45 per cent. For shares, there is no fee for general investment accounts, while a 0.45 per cent charge applies to shares in Isas or Sipps, capped at £45 and £200 respectively.
According to the company the move is designed to make the tariff charged for using its platform “simple, transparent and good value for money”.
Hargreaves also announced it backed an industry-wide ban on all exit fees, provided the rule applied to all and was not just confined to platforms.
Danny Cox, head of communications at Hargreaves, said: “We have removed exit fees and think everyone else in the industry should do the same.
“We have been working on this innovation for some time and have invested heavily in electronic transfers.”
Mr Cox said the company could now perform around 60 per cent of transfers electronically, which helped manage the cost as manual, paper-based administration was more expensive and time consuming than electronic processes.
In March the Financial Conduct Authority announced a consultation on banning or restricting the fees charged by platforms to clients wishing to leave.
Some in the industry have warned platforms could still introduce such fees “by stealth” even if they were formally banned by finding loopholes in the system, while others were concerned the watchdog’s ruling would not cover all firms.
The full set of fees removed:
|Fee removed||Previous price|
|Internal stock transfer fee||£12.50 per holding|
|GAD calculation fee on pensions||£75 +VAT|
|Transfer a nominee sharholdings to a certificate||£25 per holding|
|Transfer fee (cash)||£25|
|Transfer fee (as holding)||£25 per holding|
|Account closure fee||£25 +VAT|
|Early account closure fee||£295 +VAT|
|Reinvest fund income charge||min £1, max £10|
|Selling funds to pay fees||£1.50 per fund|
Mark Polson, director at the Lang Cat, said: “Hargreaves Lansdown has done the right thing here.
“We would have liked them to have done it earlier, but the truth is that today hundreds of thousands of customers are in a better position than they were yesterday.
“It remains a premium priced service, but that sense of them having their cake and eating it too is reduced.”
Richard Wilson, chief executive of Interactive Investor also welcomed the move and thought it meant a “much more competitive marketplace” could open up.
He added: “This move throws down the gauntlet to the wider industry, which has dragged its heels on this issue.
“As we await the regulator’s final decision on exit fees, let’s see if other major platforms can call time on the fees without further arm twisting.”
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