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Fidelity undercuts Hargreaves on direct pricing

Fidelity to offer 35 basis points charge with no event-driven extras.

Fidelity has revealed its new charging structure for its direct platform which undercuts Hargreaves Lansdown by 10 basis points.

The new charges will be introduced next month and will see Fidelity charge 35bps for assets up to £250,000 and 20bps for assets above £250,000. There will be no charge for assets over £1m.

In an online press briefing last week, Fidelity accused competitors of launching overly complex pricing models. It says its new charges will have no additional fees beyond its standard service charge.

It means paper statements, joining, phone dealing and other event-driven charges will not apply to Fidelity’s direct clients.

It says its ‘Select’ list of funds will have an average annual management charge of 64bps with the cheapest tracker fund priced at 9bps and the cheapest actively managed fund at 20bps.

Fidelity head of personal investing Mark Till says: “We do not believe an investor will be able to build a balanced portfolio for less.”

Fidelity will also pay customers’ exit charges if they are joining from a rival platform.

Hargreaves last week announced a 45bps charge for investment up to £250,000.

The Platforum managing director Holly Mackay says: “We see this as a clear and bold move, chucking down the gauntlet to those with more complex structures. It seems as though Fidelity has had enough of playing second fiddle in the UK market.”

Pilot Financial Planning director Ian Thomas says: “This is good for the D2C market. Simplicity around fees is good because clients struggle to understand complex, menu-based charges. The only concern is there may be too much focus on price and not enough about value.”

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