On the 19th September, Hargreaves Lansdown announced that it is scrapping all four of its controversial exit fees, bringing the total number of fees the firm has scrapped in recent months to nine. The scrapping of its exit fees follows a previous move by its biggest competitor Interactive Investor.
The move by Hargreaves Lansdown, which some are suggesting is an effort to help rebuild the fund platform's reputation following months of negative press surrounding the freezing of Neil Woodford's equity income fund, will be welcomed by investors who had previously been charged around £3m per year in exit fees.
Hargreaves Lansdown had previously charged £30 to close an account and in addition would charge £25 per fund or stock and £25 for any cash held. Hargreaves Lansdown also previously charged £295 plus VAT for closing a pension early however all of these charges have now been scrapped.
A summary of the latest changes to Hargreaves Lansdown's exit fees is shown below:
|Hargreaves Lansdown Exit Fees||Previous Charge (prior to 19/09/19)||New Charge (as of 19/09/19)|
|Charge per fund or stock||£25.00||£0.00|
|Charge for cash||£25.00||£0.00|
|Pension Closure||£195.00 plus VAT||£0.00|
Danny Cox, head of communications at Hargreaves Lansdown said “We continue to support a ban on all exit fees, provided this is industry-wide and not just confined to fund shops". The move by Hargreaves Lansdown is likely to put pressure on the remaining major providers that continue to charge exit fees, such as Charles Stanley Direct and iWeb.
Hargreaves Lansdown had previously scrapped five other charges including internal stock transfer fees of £12.50, pension drawdown fees of £75, fees of £25 to move shareholdings to a certificate, a 1% fee to reinvest income in a fund where the income share class was held and finally the £1.50 fee charged per fund when there is insufficient cash in a customer's account to cover its management fees, leading to the selling of a fund.
The news is likely to be welcomed by both existing Hargreaves Lansdown customers and those who had previously been put off using them due to their exit charges.
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Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.