Hargreaves Lansdown Review

Why do you need a Hargreaves Lansdown review? Well, if you've got a great investment idea then you're going to need a brokerage to actually buy the share, fund, or ETF!

Selecting a brokerage can be intimidating for new investors but it doesn't have to be. For UK investors, we think it is tough to look beyond the market leaders in providing investment execution. One of these is Hargreaves Lansdown, and here is our Hargreaves Lansdown review...

Hargreaves Lansdown Review:
When it comes to brokers then bigger can be best

We think the most important thing in choosing a broker is their safety. Despite the government providing some broker protection (currently £50,000 for brokerage accounts and £85,000 for saving accounts), if your broker were to go down then it would cause you all sorts of headaches and stress. 

Surely a broker can't go bust you might ask? Well, unfortunately it does happen. Just ask people who had accounts with Beaufort Securities or MF Global {link}. 

Isn't a broker meant to keep you assets ringfenced? The answer is yes they are. This is a legal requirement BUT sometimes people break the law and the ring fence may not have been observed. Furthermore, the administrators can reclaim their costs from client funds (this came to light in the case of Beaufort) meaning a significant haircut for investors. There can also be a lengthy time lag in reclaiming your funds. Bottom line - I think it is worth paying a bit more for the (hopefully!) safer brokers.

A larger broker doesn't guarantee safety but there are some significant advantages for investors. Firstly, the company is the biggest investment provider in the UK so has huge scale (they have industry-leading margins). Secondly, as the company is so large you can bet the regulator is keeping a very close eye on them - it would be a huge issue for the regulator if a scandal were to occur at Hargreaves Lansdown. Thirdly, the company is publicly listed meaning that you can keep an eye on their accounts yourself. They'll also be under constant analyst scrutiny.

To read more about the Hargreaves Lansdown account, click here.

Hargreaves Lansdown Review:
Using their accounts

As you'd expect, Hargreaves Lansdown offers the major investment products such as ISAs, junior ISAs, Lifetime ISAs, SIPPs, junior SIPPs, and general investment accounts. They also offer enhanced pension options such as buying annuities through their platforms, or setting up an income drawdown plan. 

The Hargreaves Lansdown investment platform is known as "Vantage" and allows the investor to access a range of different investment options. You're able to deal in the following investment products:

- Shares
- Bonds (both corporate and government)
- International shares (Main European markets, USA, and Canada)
- ETFs
- Funds and Investment Trusts
- CFDs/VCTs and spread betting
- Currency services 

Hargreaves Lansdown Review:
Website, Services & Research

The Hargreaves Lansdown website (www.hl.co.uk) is easily navigable and offers a whole range of services and "add on" benefits. This includes analysis on particular companies, news, reports, broker forecasts, fundamental and technical analysis on companies, investment education, and an excellent mobile offering.

The site offers support in managing your account, transferring investments, giving tax information/certificates, and if you cannot find the information you're looking for, then customer services are available by either phone or email. The level of support is extensive and comforting.

Hargreaves Lansdown Review:
Disadvantages:

1) Fees:
You're probably wondering why haven't we even mentioned the charges yet. Well to be honest they are a little on the high side compared to other brokers. Clearly these can change, but currently dealing in stocks, funds, bonds, and ETFs will set you back £11.95 per trade although this will drop if you do more than nine trades per month. You will be charged custody rates on funds with the annual fee being 0.45% on funds up to £250,000. These charges will drop if you hold more in funds (the custody fee is 0.1% for over £1m). 

There are no inactivity fees.  For a full list of Hargreaves Lansdown's current fees, click here

While these charges are a little high, we still don't think they are too bad and, given the quality of service and the relative safety of the broker, we think are fair enough. Transferring shares into Hargreaves Lansdown is relatively straight forward. Transferring out with cost you £25 per holding.

2) Hargreaves Lansdown do not offer a Personal Crest Membership:
While this offering is rare (Killik, Redmayne Bentley, Blankstone Sington and Charles Stanley can offer it), we think a Personal Crest Membership is valuable. This is because it means you are the legal owner of the shares (rather than your broker) so your assets would not be pooled with others and you'd receive direct information from the company itself. Please note, however, that legally ISAs must be held in nominee accounts so a Personal Crest Membership would be of no benefit to you here.

3) Currency conversion is compulsory
The only other disadvantage we've found is that when you deal in international shares, Hargreaves Lansdown will automatically convert your dividends and cash proceeds back to sterling. Other providers (most notably interactive investor) allow you to keep your cash in the currency you are paid. We feel that not having to convert back to sterling gives the investor more choice, greater control, and reduces the cost of constant switching between currencies. We probably think therefore Interactive Investor is the more suitable broker if you are planning a lot of international investing.

Hargreaves Lansdown Review:
Conclusion:

While you can certainly save money by using other brokers, we think Hargreaves Lansdown offers and excellent all round service that is highly regarded by many retail investors. The website is very easy to navigate and the range of investment options is excellent. Therefore, we think that for most retail investors Hargreaves Lansdown is an excellent option to hold your investments and should allow you to get on with the harder task of picking your investments rather than worry about the broker.

Further information - Hargreaves Lansdown homepage


Mike - six-figure dividend earner

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