Direct to consumer platforms have defended the use of pre-filled fund choices in application forms sent to prospective clients.
Hargreaves Lansdown pre-populates fund selections in Isa and Sipp application forms when sent with its monthly magazine. It says the funds vary and reflect the topics discussed in its magazine.
The pre-filled funds most recently included were: HL Multi-manager Income and Growth; Standard Life Investments UK Smaller Companies; and GLG Japan CoreAlpha.
Investors can choose alternative funds and do not have to invest in any of the pre-filled choices.
Platforms including Fidelity Personal Investing, Alliance Trust Savings, The Share Centre and Interactive Investor say they do not pre-populate investment choices.
Charles Stanley Direct says it also pre-fills fund choices to reflect topics discussed in its magazine.
Satis Asset Management chartered financial planner David Hearne says: “Hargreaves Lansdown, particularly through its website, provide excellent information to retail investors.
However, in their efforts to make the application process easier for clients they risk crossing the line from informing to advising.
“Despite the standard regulatory statements it is hard to imagine a retail client would not feel they had been advised if the investments are described as exceptional and their application form has already been pre-filled.”
Hargreaves Lansdown head of financial planning Danny Cox says: “Hargreaves Lansdown are specialists at making investments easier for clients and helping people make the most of their money
and this is part of a much longer process.”
Charles Stanley Direct head of investment research Ben Yearsley says: “You want to make things as easy as possible for clients but you want to ensure at the same time you are not limiting their choices.”