Hargreaves Lansdown’s share price fell by nearly 8 per cent yesterday (16 May) following the launch of Vanguard’s low-cost direct-to-consumer service.
While the Bristol-based broking and advice firm’s share price recovered slightly this morning, it was the business worst affected by the launch of Vanguard's proposition.
Vanguard’s direct-to-consumer online service charges an annual account fee of just 0.15 per cent.
The service will have a minimum lump sum investment of £500 or a minimum monthly contribution of £100.
There will be no account fee above the first £250,000 invested, meaning this fee is effectively capped at £375 a year.
A spokesman for Hargreaves Lansdown said: “Hargreaves Lansdown’s market leading investment service is renowned for its client focus, exceptional service and value for money.
“Our clients tell us they appreciate the extensive range of shares, funds, investment trusts, ETFs and cash open to them, across Sipp, Isa, Junior Isa and Lifetime Isa accounts, and the option for advice should they need it.
“Most investors take advantage of the choice available to invest across multiple fund groups.”
On top of the account fee, Vanguard’s fund charges average out at 0.14 per cent with its FTSE All Share tracker costing just 0.08 per cent.
Compared to Vanguard’s service, Hargreaves charges 0.45 per cent for an Isa account.
damian.fantato@ft.com
