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Which? study finds widespread failings in D2C wrap market

Only Hargreaves Lansdown gained a recommendation out of 14 execution-only providers

A Which? survey has found the overwhelming majority of direct platforms are failing to meet client needs, with banks and building society platforms judged the worst performers.

A survey of 1,300 members by the consumer body judged that only Hargreaves Lansdown is worth a recommendation out of 14 execution-only platforms.

Which? asked questions in six categories: customer service, administration, investment opportunities, functionality, tools and guidance and value for money.

On the basis of the scores given out of five for each category, Which? gave the firms a percentage cus-tomer score. 

Only firms with a score of 70 per cent or above would be recommen-ded to members.

The lowest-scoring direct platforms all belonged to banks or building societies. Halifax Share Dealing, Barclays Stockbrokers, NatWest Stock-brokers and HSBC finished bottom with 45 per cent, 47 per cent, 49 per cent and 54 per cent respectively. The study also recommends Self-trade clients move away from the platform due to recent issues and the fact it is no longer accepting new clients.

Selftrade announced last month it was to transfer its entire client bank and brand to business service outsourcing group Equiniti following a strategic review and an announcement that its parent, Boursorama, was to exit the UK.

The study also points out customers should consider how much their platform provider will charge them to exit or transfer assets away, with a number charging up to £25 per line of stock to move investments elsewhere.

Which? says: “The idea of a one-stop shop for your investments has obvious appeal – one company to call, one set of online passwords and all your investments on one statement. 

“But if you’re entrusting large sums of money to one firm, which one to go with is not a decision to take lightly.

“Hargreaves is the only provider to secure a customer score of more than 70 per cent – becoming a Which? Recommended Provider. High-street banks offering these services performed the poorest.”

The Platforum head of direct Jeremy Fawcett says: “There’s more variation in the positioning of direct platforms these days and some will work better for certain types of consumer than others. 

“Some people want masses of information, tools and access to exotic investments while many want the exact opposite. That makes it difficult to make overall pronouncements on which are the best and worst.

“We agree Hargreaves Lansdown provides excellent customer service while we rate AJ Bell You-invest, Charles Stanley Direct and Interactive Investor most favourably on costs and Fidelity Personal Inv-esting does best on guidance.

“The banks also have an opportunity in this market because they have big brands and access to large numbers of clients. 

“If they decide to strengthen their propositions and integrate them with online banking and good cash savings options, they could make
serious headway in this sector.”

Which? direct platform study results:

which? d2c

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