Controversy at Hargreaves Lansdown on double charging

Smoke, mirrors, RDR, TCF, FSA, bluster,obfuscation dah di dah di dah.....

I have this great idea. You set up a business where the client's interests are at the centre of everything you do. You charge the client directly for your services and you do not take a penny of commission as remuneration. You account for every single penny and you deliver the high level of service and advice you promise, and you do all of this because you want to, not because the regulator forces you to.

OooH! Can you believe it?

Well I never.

Well,surely what we should be asking is how much do the other Platform/Wrap providers take in kickbacks.Are these hidden charges? Are they taken into account in TER calcs?...........I wonder...........

HL are rapacious and greedy but have been allowed to be that way by both the regulator and their competition. The level of kickbacks they receive from fund managers is mindboggling and at odds with the way they present themselves as champions of the consumer battling with fund management companies to reduce fees (most of those they take themselves!). However their competition has been singularly useless so they have not faced pricing pressure from that direction, at least when combined with functionality which HL are without doubt strong on, and they have not previously been forced to disclose their fee arrangements on funds (why has this taken so long for a financial services business dealing with consumers - havent IFAs had to do this for years!). All they have done is what any business would do in that situation - charge as much as they can for as long as they can. They are in the process of being "disclosed", and much like the debt crisis we all find ourselves in, they are not going to find it easy to wriggle off the hook.

Have a look at Nucleus....clear ,unbundled and a great cash proposition....No kick backs.Platform fee,discounted funds, adviser fee....sorted.

In fact, I was responsible for setting up the HL terms on the HSBC FTSE All-Share fund, many years ago (something like 10 years ago).

One fact overlooked by the comments and articles recently regarding this fund, is that HL's platform has provided the cheapest route, by some margin, for retail investors to access a FTSE tracker in the UK in this time, with the headline rate of 0.25% a matter of public domain fact (and with any rebates agreed between the two firms not negating the fact that this was the best deal for investors in the UK).

It has taken many years for any other provider to come even close to matching or beating this headline rate, and even now it represents the cheapest - or certainly one of the cheapest - tracker costs available to investors (with most other mainstream options still double this, ie at 50bps : and is Virgin still charging its customers 1% for the pleasure of sitting in its tracker?).

It may be a fact that when asked to pay a platform fee smaller investors will be disadvantaged on the costs of ownership, but they will have to calculate if the advantages of HL's platform, research, service, etc, are sufficient to warrant the explicit costs.

I see nothing wrong with a transparent explicit fee being levied by a platform, wrapper, service proposition provider, in addition to any fund charges that are disclosed. Customers will need to work out the 'value' of the overall proposition as well as the cost, and over time I have no doubtthat they will, at which point they will vote with their feet and their funds, with many favouring HL's overall proposition.

Rebate = commission and should be banned. Level playing field for IFAs please.

Hargreaves Lansdowne announced preliminary profit before tax of £129 million on 1st September 2011. This was up 42%. Where do you think this comes from???

listen all you complainers. You can always go and buy some shares in HL and share the success with them. !!!