Furious investors have launched a backlash at Hargreaves Lansdown’s fees hike – and are leaving in their droves.
The country’s largest investing platform is haemorrhaging investors to rivals as a result of a charges revamp. The changes will result in higher fees for at least 400,000 customers.
Although the number of customers jumping ship cannot be quantified, competing platforms say they have seen a surge in inward transfers from Hargreaves since the price changes were announced just short of two weeks ago.
Some rivals say Hargreaves customers now account for 45 per cent of transfers in, compared to between 10 and 15 per cent normally.
Interactive Investor says it has experienced an ‘almost 200 per cent increase’ in inward transfers from the number one platform, comprising a mix of self-invested personal pensions (Sipps), stocks and shares Isas and investment accounts.
Yet it refused to quantify the amount of transfers other than to say ‘we are seeing a large influx and significant numbers’.
Charge: Hargreaves is introducing a new £1.95 fee to buy or sell investment funds online – unless funds are bought via a regular savings plan
While AJ Bell also declined to reveal specific data, spokesman Charlie Musson says it has seen an increase in customers switching to its platform, ‘taking advantage of its extremely competitive pricing, simple products and excellent service’.
Share trading platform IG reports a ‘surge’ in transfer requests from Hargreaves customers – with the number equivalent to 94 per cent of those received for the whole of last year.
Money Mail has also received a deluge of emails from disaffected Hargreaves customers, telling us they are moving their assets to rivals.
Interestingly, some customers have been contacted by the platform asking for their reaction to the new charges. This suggests Hargreaves is aware of opposition to the changes.
When announced late last month, the mish-mash of price changes were described as ‘providing even more clients with better value for money’.
They kick in the start of March. Yet, while Hargreaves said half of its 2million customers would benefit from lower fees, 20 per cent will pay more.
This is in part due to a new £1.95 fee to buy or sell investment funds online – unless funds are bought via a regular savings plan. This applies to its stocks & shares Isa, investment account, Junior Sipp, and Sipp.
It also stems from a higher cap on the annual account charge that is levied on holding shares (including investment trusts, exchange traded funds, and bonds) in a stocks & shares Isa.
This annual fee rises from £45 to £150, although the charge rate reduces from 0.45 to 0.35 per cent as it does for fund holdings below £250,000.
The new maximum annual account charge for funds is £3,750, kicking in once holdings exceed £2million.
A 0.35 per cent account charge is being introduced for the first time on shares held in a general investment account, with an annual maximum of £150. The new charges for fund holdings are the same as for the stocks and shares Isa.
Based on those customers who have contacted Money Mail in recent days, the biggest grievance centres around the new higher cap on account charges for holding shares – and the introduction of fees for holding shares in the investment account.
Hikes: Hargreaves’ annual account charge is set to rise from £45 to £150, although the rate reduces from 0.45 to 0.35% as it does for fund holdings below £250,000
Amongst those who are unhappy is Ian Fraser, from near Glastonbury in Somerset.
The 68-year-old retired supplier coordinator for local helicopter manufacturer AgustaWestland is currently transferring his investment account and Isa to AJ Bell after being told by Hargreaves he would have to pay ‘roughly £14 more each month in account changes’.
‘It’s a no brainer for me,’ says Ian, who is married to Elaine. ‘Hargreaves’s annual charge cap on shares held inside an Isa or investment account will be £150, compared to £42 for AJ Bell.
‘My money with Hargreaves is a key part of my retirement armoury and I refuse to have it clobbered by higher charges.’
It’s the same for Adrian and Debra Faulkner, from Wakefield in West Yorkshire. The retired couple, both aged 65, have stocks and shares Isas with Hargreaves.
From next month, their individual annual account charges will jump from £45 to £150. Both their Isas are invested across a spread of investment trusts with dividends received paid out (tax-free) to boost their retirement income.
‘We’ve never had a problem with Hargreaves,’ says Adrian, a former sales rep for a pharmaceuticals company. ‘I’ve recommended them in the past to family and friends. But this price hike is a step too far.’
To start with, Debra, a retired nurse, is moving her Isa across to AJ Bell which will result in an annual account charge capped at £42. Adrian will then consider whether to follow suit.
He says: ‘One of my concerns is that we both move our Isas across to AJ Bell, only for them to follow Hargreaves’s lead and increase their charges cap.’
In AJ Bell’s defence, it cut charges in both 2022 and 2024 – and has made a commitment to continually reduce them as part of its long-term strategy.
Other movers include Bob Williams, a 77-year-old retired market research director for Mars, from Windsor in Berkshire.
He has been told by Hargreaves that the monthly charges on the investment account he uses to hold a number of European and American shares will rise by £13 from the start of next month. As a result, he will be transferring the shares to Barclays where he has an investment account.
‘Hargreaves’s price increases are annoying,’ he says, ‘but they give me the perfect excuse to hold all my investments in one place, something I’ve been planning to do for a while, but never quite got round to doing.’
Dumped: Hargreaves is haemorrhaging investors to rivals as a result of its charges revamp
Holly Mackay, chief executive of platform comparison website Boring Money, believes the fee changes made by Hargreaves are a ‘positive move’ for most customers, especially those with smaller accounts, those who hold funds, and who don’t trade often.
Yet, she confirms ‘older, more affluent, and savvy investors who have maxed out their Isas and use Hargreaves’s investment account to hold shares will end up paying more’.
For example, Boring Money says that someone with £100,000 invested in a mix of funds and shares in a Hargreaves Isa, will pay £360.60 a year from next month as opposed to £317.80 now.
This is based on four annual fund trades, four share transactions and a regular monthly investment.Cheaper options include Freetrade (zero), Halifax (£112), Interactive (£179.88) and AJ Bell (£211). More expensive are Bestinvest (being bought by NatWest) and Aviva.
On a £100,000 portfolio of shares held outside an Isa in an investment account, the new annual charge from next month will be £177.80, compared with £47.80 now. This assumes four share trades a year.
Cheaper options include Freetrade, IG and Trading212 (all zero) while equivalent fees levied by AJ Bell and Fidelity are £62 and £30, respectively.
In contrast, Boring Money says someone with £20,000 in a mix of funds and shares in a Hargreaves Isa will see total annual charges drop next month from £113.90 to £87.80.
This assumes the investor carries out two fund and two share trades in both years.
The new charges are cheaper than those for Bestinvest and Fidelity but still more expensive than AJ Bell and Interactive.
Yesterday, Hargreaves said it was unable to provide ‘exact’ data, but did admit that the proportion of investment account ‘transfer out’ requests was double the average for 2025.
Simon Belsham, chief client officer, added: ‘Our refreshed pricing model represents an investment of tens of millions of pounds that will see eight in 10 clients either better off or paying the same as today.
‘Our clients tell us they trust and value us for our deep expertise, service, and unrivalled range of innovative products.’
jeff.prestridge@dailymail.co.uk