Hargreaves Lansdown

[Mike Dennis]

Use this topic to post any news about and developments at Hargreaves Lansdown

[Mike Dennis]

Just to get the ball rolling on this thread, I thought it would be useful to post links to some historical news articles we already have about HL in our archives. You can find all of these and more yourself by just typing “Hargreaves Lansdown” in our search box…

[Robert Thornton]

I’ve been a HL customer for about 6 years and their service has been pretty good. Until Covid. The service now is appalling and getting worse. It seems to be getting worse at executing market orders, constantly saying it can’t execute. It doesn’t allow trades in some UK funds such as Schiehallion. Executing US trades seems to be difficult and the forex charges exorbitant. It doesn’t support stop/loss on anything other than UK stocks. It hasn’t had trade data for months.
When I try to contact them by phone I am left queuing for more than 30 minutes, secure messaging takes days to get a response. This might have been excusable when Covid first struck but 11 months later it’s completely unacceptable. Given how expensive it is and how much profit they make I can only assume that they are complacent beyond belief.

I have already switched my ISA to Interactive Investor and so far I am very happy. I’ll be switching my SIPP very shortly.

[Mike Newman]

I agree a lot with RT. Can I ask how long did it take to move from HL to II? I ask because it took 18 months to move from the ‘new’ appalling Barclays excuse for a broker to both AJ Bell and II and both problems were due to Barclays incompetent administration. My beef with HL is that unlike all the other brokers that I use, HL does not provide a daily rolling closing balance, so I don’t know from one month to the next how HL’s stated cash availability is derived – they just assume you have to trust them. In the past they have made mistakes which has taken quite a while to sort out. When I complain, as I do often, they will eventually email me a list showing the daily balance and this list is available on their twice (I think) a year statements. They have the info but refuse to be competitive and put in on the visible web site!!!

[Mike Dennis]

Yes, I agree that HL have too many service problems at present and its not clear why they should be struggling to provide normal service levels. Their competitors also have their bad moments but seemingly nowhere near as many. My wife is presently trying to transfer a small trading portfolio (5 holdings) from them to ii and its taken 3 weeks so far with no sign of progress. She has struggled to get responses when chasing them.
Interestingly the main reason I transferred my ISA from HL some time ago was their expensive 0.45% pa charge for holding unit trusts. There’s no logic for it – custody costs are no different investment trusts. But I guess they have themselves in a bind. They probably know that they will have to be more competitive in the medium term but, if they change their unit trust pricing in line with pricing for other holdings they will eliminate a very large chunk of their present revenues. Its a dilemma for them and they will resist making the change until the pain of market share loss outweighs the pain of price reductions. A relatively low growth market with very few new customers may be the trigger for this change especially if poor portfolio growth wakes up more of their “zombie” customer base to the fee levels they are paying and how much they can save by switching.

[Robert Thornton]

In reply to reply #16519

Hi Mike
It took about 4 weeks to transfer about 12 stocks in-specie and some cash. The stocks were transferred in stages, the cash was the last thing to transfer.
Overall I was very pleased with the process.

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[Mike Dennis]

In reply to reply #16528

Thanks Robert – good to know. I shall see if they can achieve similar timeframe with my wife’s portfolio.

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[Ian Millard]

I’ve used HL for several years for my SIPP. On the plus side they were very good when I did a small drawdown, no fees, very flexible and responsive, and very good advice. However I believe the fees are far too large for the small value add. I am mainly invested in ITs so the fees are capped at £200, but even so I have larger portfolios with II and iWeb who charge much less for holding and trading.

[Michael Byrne]

In reply to reply #16519

I’ve been with HL for 20 years but recently, they are a pain to deal with – and expensive. I transferred most of my ISA and SIPP to II which took about three months. I then tried to donate part of what was left to a charity but HL flat out refused……

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[Colm Maguire]

I have several family members with SIPPs that I oversee and also ISAs myself included. I have had no problem with HL and always rate their service and the quality of the website. I have few needs last year to contact hem so can’t comment. I did move my SIPP out to the Share Centre/ Curtis Banks some years ago because of the high fundholding charges. HL are good value for shares but not funds. When I started my SIPP it was all shares but gradually migrated to funds.!
The linked accounts feature on HL is very useful!
The transfer of te SIPP did not go well but no fault of HL. I’ll post more info on Curtis banks separately.
Eventually all the family will end up n ii. saving the whole family several 000s per annum.

[Colm Maguire]

In reply to reply #16519

When I moved my SIPP from HL the move was badly managed and no one on the receiving side took responsibility for resolving problems and pushing the change forward. In the end I found that the issues arose around funds which I had in HL not available on the receiving platform. Even worse the on a few, the Class of unit held in HL not available on the other platform. It would have been easier to sell the problem funds and transfer the cash. If I had done that I reckon it would have been complete in 10 weeks or less.
You can do your own research. See if the receiving platforms offers the same class in each of the funds you want to transfer. If that is all yes then there is little reason for the process to be longer than two months.
I got the impression that the customer support people I dealt with did not understand the issue.
NB all my shares were transferred in a few weeks.

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[Mike Dennis]

In reply to reply #16531

Still waiting for my wife’s trading account to be transferred from HL to ii. My wife has sent HL a couple of chaser emails and they respond apologetically (eventually) but the account has still not moved. I think they are struggling to digest all these new clients they have signed up in the past year.

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[Mike Dennis]

Interesting Facts from HLs latest Half Year Results

Interesting data for us :-
>
> Massive increase in customers last year driven by the covid effect – now at 1.5m Average age of new clients has dropped from 45 in 2012 to 37 in 2020.
> Market share claimed to be 40.3%
> 6.5m equity trades in H1 generated £113m revenues which is 123% up on H1 prior year (2.9m trades).
> It looks like the average HL client did about 4 trades in the last 6 months of 2020 which is twice the average

>
> Overall HL revenues are up 16% YoY
> Operating costs up 25% – most of the increase is driven by increased equity trading, acquiring and onboarding new customers and reconfiguring ops to deal with covid. The latter two are more likely to be one-offs which will drop off from future cost base?
> PBT up 10%
> Funds they hold are circa £62bn compared to £40bn equities but gap is closing.
> HL continue to make very comfortable revenues (£110m) from fund custody charges and renewal commissions.
> Nearly 50% of all revenues (£140m) come from holding funds and managing funds of funds. I suspect this is by far the most profitable bit of their business – their crown jewels.
Average revenue per user (ARPU) is £400 (H1 turnover £300m x2 to annualise / 1.5 million customers which I think is a decline from prior years.
The average customer portfolio size is £81k. So the average customer is paying HL 400/81k = 0.5% pa in fees.

[Mark Bentley]

In reply to reply #16798

6.5m trades generating £113m of revenue is interesting. Implies > £17 per trade. Surely their commissions are not that high? If not, suggests that they’re generating revenues on trades from sources other than commissions. Makes me wonder whether they get fees for order flow, which I was led to believe was not legal in the UK.

If I’m right that the revenue is more than just trading commission, it would be interesting for a shareholder to ask how that revenue was derived, at their AGM.

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[Mike Dennis]

In reply to reply #16800

Good spot Mark. Ijust checked the notes again and the £113m was for “Stockbroking commission and equity holding charges”. I think their broker charges were the majority of this but it would take a bit more detective and algebra work to get a handle on the split. Dont forget that many clients still use telephone broking which increases tbe average charges considerably.Holding charges on equities are zero for trading accounts and 0.45% of holdings for ISA and SIPP accounts up to a max of £45 pa and £200 pa respectively.

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