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Hargreaves’ Wealth 150 may shrink in RDR pricing world

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Hargreaves Lansdown’s Wealth 150 list of favourite funds could shrink significantly as the company moves to adopt its post-RDR pricing model.

The group has contacted fund providers asking them to detail what price they will offer the firm on super clean share classes for their products. This comes ahead of the Financial Conduct Authority’s final platform paper, which is due to be published tomorrow.

One of the consequences of the RDR is that platforms are likely to have to charge investors for their services if platform commission is removed. Hargreaves is hoping to win preferential pricing on super clean share classes, which will allow it to offer investors the lowest price even with its own fee on top.

Offering places on a smaller Wealth 150 could incentivise fund groups to give the company preferential pricing, as they could expect more concentrated inflows.

A Hargreaves spokesman says: “We are aiming to use our negotiating power to do what we do best, which is negotiate costs down for the end investor.

“Once we have gone through the process of negotiation – and this depends on what the platform paper says tomorrow – we will then be able to decide how we formulate the Wealth 150. It might be that it stays the same, it might be that it is reduced.

“We have 103 funds on the Wealth 150 at the moment but could not say whether the list in the future is going to be 103, 30 or 150 – we just do not know at this stage.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “Hargreaves Lansdown’s Wealth 150 list of favourite funds”

    Sounds like advice to me.

  2. A Hargreaves spokesman says:
    “Once we have gone through the process of negotiation – and this depends on what the platform paper says tomorrow – we will then be able to decide how we formulate the Wealth 150.”

    Surely if the Wealth 150 is impartial then fund price is irrelevant? The list would be solely based on the funds HL reckons will outperform peers.

    Looks to me like an admission that fund managers who’ll help prop up HL’s high markup stand a better chance of getting on the list than those that don’t. Makes a mockery of HL’s so-called ‘research’.

  3. Hargreaves Lansdown – “We have no vested interest in which funds we recommend in our Wealth 150”
    IFAs – “Yeah right…”

    Would love to hear Mark Dampier’s and Ian Gorman’s comments on this article.

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