Hargreaves Lansdown to scrap platform fee

The UK’s largest investment platform is to scrap its annual platform fee next year.

Hargreaves Lansdown will instead charge a percentage-based fee on assets, which it says will be more “fair and transparent”.

The move comes after years of pressure on the investment industry to reduce fees. Hargreaves Lansdown has been one of the most vocal critics of the current system, which it says is unfair to smaller investors.

Under the new system, Hargreaves Lansdown will charge a fee of 0.45% on assets up to £250,000, and 0.25% on assets over £250,000. This compares to the current annual platform fee of £45 for all customers.

Hargreaves Lansdown said the new fee structure will be more “fair and transparent” because it will be based on the value of the assets that customers hold. This means that smaller investors will pay less than they do under the current system.

The move is likely to be welcomed by consumer groups, which have long campaigned for lower fees in the investment industry. However, it is unclear whether other investment platforms will follow Hargreaves Lansdown’s lead.

Percentage-based platform fee may suit lower-value portfolios

The new fee structure may be particularly attractive to investors with lower-value portfolios. Under the current system, these investors pay the same annual platform fee as investors with larger portfolios. However, under the new system, they will pay a lower percentage-based fee.

For example, an investor with a portfolio of £50,000 would pay an annual platform fee of £22.50 under the new system, compared to £45 under the current system. This represents a saving of £22.50 per year.

However, it is important to note that the new fee structure may not be as attractive to investors with larger portfolios. For example, an investor with a portfolio of £1 million would pay an annual platform fee of £4,500 under the new system, compared to £45 under the current system. This represents an increase of £4,455 per year.