Hargreaves Lansdown has defended its decision to introduce a £25 exit fee for investors who want to close their platform account and a £25 per holding charge for investors wanting to re-register to another platform.
At a press conference on the company’s new pricing structure last week, the firm said a £25 fee would apply to investors who wanted to encash investments held on the Vantage platform, while all tax wrappers and investment accounts would now incur a charge of £25 per holding to transfer to another provider. The £25 charge per holding previously applied only to Isas.
Hargreaves chief executive Ian Gorham said it would not be good business practice if the firm was trying to generate “material revenue streams” from clients transferring out.
He argued the fees reflects the cost to Hargreaves to transfer a client off the platform. He said: “We are trying to recognise the cost of carrying out the service.”
The Lang Cat principal Mark Polson says: “A charge of £25 per line of stock to transfer out feels high and it would be good to see it come down. There really ought to be an amnesty period for existing clients where there is no charge to move assets elsewhere.”
Polson adds the availability of efficient re-reg technology products makes the cost of transferring minimal.
Platform consultancy Platform People head of due diligence Tony Peters says: “There could certainly be treating customers fairly concerns here around charges to move away.”
Plan Money director Peter Chadborn says: “Imposing restrictive methods for keeping people on the platform is likely to test customers’ loyalty.”