Hargreaves Lansdown is moving to a restricted model and scrapping the minimum asset requirement for its advice service.
The move means the advisory arm of the company will no longer have to advise on products that it says are “overly complicated, opaque, expensive or carry excessive investor risk”.
Hargreaves says: “We believe that by restricting the advisory service we offer, and focusing all our advisory research and resources on the areas that actually matter to our clients, we will be able to improve the advisory services we offer, simplify our fee tariff and remove the minimum portfolio size for advice.”
From 1 October, the firm will scrap its £20,000 minimum portfolio size and advise clients over the telephone regardless of the size of the portfolio, subject a minimum fee of £495.
For investment advice investors will pay 1 per cent on the first £1m assets, compared to an uncapped 1 per cent previously.
The review service will charge between 0.365 per cent and 0.5 per cent depending on the type of service selected, where before it was weighted by assets.
For the portfolio management service the firm will remove the annual 0.75 per cent discretionary charge applied on third-party funds.
Ongoing charges will also change. For the first £250,000 the charge will change from 0.45 per cent to 0.51 per cent per annum, while for assets between £250,000 and £1m, the fees will go from from 0.25 per cent to 0.30 per cent per annum, while the current 0.10 per cent fees for assets between £1m and £2m will be removed.
Hargreaves Lansdown head of communications Danny Cox says: “This change will set the groundwork for us to simplify and reduce our advisory charges, develop our telephone-based service and increase the use of technology to improve the efficiency of the advice process.”