Yahoo Finance Hargreaves Lansdown offers investor secret deal with lower fees
Hargreaves Lansdown offered a secret deal to a DIY investor who threatened to switch to a rival broker over expensive account fees, as Britain's largest investment broker faces increasing pressure to cut back its charges.
The broker contacted a DIY investor with a “special arrangement”, after he began the transfer process for his £390,000 self-invested personal pension, or ‘Sipp’, according to the investment publication Investors’ Chronicle.
The investor, who was not named, said that he was a customer of Hargreaves Lansdown for a decade but intended to move to rival Interactive Investor.
Hargreaves told the investor that it appreciated his loyalty and while it was not standard practice, would offer him a “special arrangement” on fees.
Instead of its tiered charge on investment funds, which starts at 0.45pc, Hargreaves said that it would offer almost half that level at a flat fee of 0.25pc on all funds up to the value of £1m, Investors’ Chronicle reported.
It added that it would not charge any fee on holdings worth over £1m. It currently charges its other Sipp customers a fee of 0.1pc on holdings worth between £1m and £2m. Hargreaves reportedly encouraged the investor to keep the special arrangement under wraps.
According to the Investors' Chronicle, the broker said: “As the circumstances of your friends and extended family will differ from your own, we do request that you not share the details of your offer with other people so that we can avoid causing disappointment.”
A spokesman for Hargreaves Lansdown said: "Our fee structure is simple and transparent where clients pay the platform fee plus any dealing costs and nothing else.
“Platform services have always had the ability to apply an appropriate standard charging structure in certain circumstances.”
Investment brokers are facing an increasingly competitive market, as cost-conscious DIY investors seek to save by cutting back on fees.
Hargreaves Lansdown charges a 0.45pc fee on the first £250,000 and 0.25pc up to £1m invested in funds in a Sipp, meaning a £500,000 portfolio would cost a saver £1,750 a year in fees.
A flat 0.45pc charge applies to individual shares held within a Sipp, but this is capped at £200 a year.
Meanwhile, Interactive Investor charges start at £9.99 a month, regardless of size, which works in favour of investors with large pots.
Have you been offered a sweetheart deal? We'd like to head from you, please contact lauren.almeida@telegraph.co.uk
