personal finance

Hargreaves Lansdown drops exit fees for investors


Hargreaves Lansdown has finally scrapped “exit fees” for customers leaving its investment platform, matching moves by rivals Fidelity and Interactive Investor to ditch the controversial charges.

The UK’s largest fund supermarket said this week it would drop a total of nine separate charges in a “simplification of its fee structure”.

Previously, customers who wanted to transfer their investments from Hargreaves to a rival provider would have been charged £25 per holding, plus a £25 account closure fee.

The removal of charges will make it easier for customers aggrieved by the Woodford scandal to move their money elsewhere.

Hargreaves has come under fire for promoting the stricken Woodford Equity Income fund on its “Wealth 50” list of recommended funds until the day of its suspension, at which point about 130,000 Hargreaves customers were left with nearly £1bn in limbo.

Those with holdings in the Woodford fund were initially unable to transfer to rival providers due to the discounted “Z-class” of shares that were exclusive to Hargreaves customers, but a workaround was found in July.

“We have removed exit fees and think everyone else in the industry should do the same,” said Danny Cox, chartered financial planner at Hargreaves Lansdown, adding the fund supermarket had “invested heavily in electronic transfers” which were less costly to process than paper-based administration.

About 60 per cent of transfers can now be done electronically, up from about 30 per cent a year ago, he said.

In March, the City watchdog threatened to ban providers from charging exit fees, describing them as a major barrier to competition. Stating that exit fees were among the top three obstacles to investors switching platforms, the Financial Conduct Authority said some 7 per cent of consumers had tried to switch but failed to do so due to hurdles including exit fees and the complexity of the process.



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