Hargreaves Lansdown CUTS account fee in huge shake-up of charges – but fund

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Hargreaves Lansdown will cut its investment account fees for investors, in the biggest shake-up to its charges in over a decade.

It has announced its headline annual platform charge will reduce from 0.45 per cent to 0.35 per cent from 1 March, but there is a sting in the tail for Isa investors holding shares, ETFs and investment trusts as their fee cap trebles.

The UK’s best-known investment platform will also make buying and selling funds more expensive. 

Hargreaves Lansdown* is introducing an online fund dealing charge of £1.95, which it says reflects more people trading in funds than when fees were last updated.

Those who own shares, trusts or ETFs in a stocks and shares Isa will see their maximum annual charge more than triple from £45 to £150. Meanwhile, investors with standard accounts have previously paid no platform fees for this, but will now face the same 0.35 per cent fee and cap.

However, in a boon for more active investors in shares, HL is cutting its online share dealing charge from £11.95 to £6.95.  

All this means that the platform could become more expensive for those who trade in funds often or who only hold shares, ETFs or investment trusts and don’t trade frequently. We explain the full details below.

Hargreaves Lansdown* says that half of its clients will be better off from 1 March, while 8 in 10 clients will either be better off or pay the same.

But there is a cohort of customers that will see fees hiked by more than £10 a month, largely due to the removal of lower account fee caps when holding shares.

Richard Flint, interim chief executive at Hargreaves Lansdown, said that the changes will provide ‘even greater value’ for clients and will ‘make investing even simpler and more accessible.’

Hargreaves Lansdown’s fees: What’s changing?  

The Hargreaves Lansdown fee shake-up is comprehensive and could change how investors use the platform, with fund dealing becoming more expensive.

There are no changes to fees within a junior Isa or Lifetime Isa.

Regular investing by direct debit will also continue to be free, as will dividend reinvestment.

This is Money says: This move by Hargreaves Lansdown follows changes from Interactive Investor and Freetrade, as competition heats up among platforms.

Largely the fees are more straightforward, with Hargreaves Lansdown applying a 0.35 per cent account charge no matter whether you hold funds or shares.

As ever there are some winners and some losers, though. 

According to the platform, half of customers will be better off. You should scrutinise the changes carefully to check whether you’ll end up out of pocket under the changes. 

You can use a Hargreaves Lansdown calculator* to help with this.

Hargreaves Lansdown says that only 2.5 per cent of clients will see fees hiked by more than £10.

But with the platform now serving around 2million customers, this still equates to approximately 50,000 investors who will see fees ratcheted up significantly.

Find out our pick of the best stocks and shares Isa providers, as well as our top Sipp providers in our regularly updated guides.