Announcing the changes, Hargreaves Lansdown said that 80pc of clients would be either better off or not affected by the changes. Experts say the customers set to benefit will be those with smaller accounts and beginners who do not trade as frequently, while “savvier” investors may be prompted to switch provider for better value.
Typically wealthier clients who max out their Isa allowance and also hold a general investment account are poised to suffer the most from the changes. General investment accounts currently benefit from no platform charges, but a £150 cap will be introduced from March.
Rival platform Interactive Investor, which imposes a flat fee rather than a percentage-based charge, reported an almost 200pc increase in transfers from Hargreaves Lansdown in the week after the pricing restructure was unveiled.
Meanwhile, the average transfer value to IG – an emerging trading platform – had jumped from £95,000 to £280,000 in the space of a fortnight.
Michael Healy, the UK managing director, said the firm had seen a “significant influx of customers moving over to us”.
Charlotte Ransom, of wealth planning firm Netwealth, said: “Fee changes tend to act as a catalyst for customers to re-engage with and better understand their overall charges.”
Holly Mackay, founder of independent financial platform Boring Money, said those being “prompted to move” by the changes were the “savvier and more affluent customers”.
“Fees can be complex to unpack and it’s typically the more confident, savvy investors who know precisely what they are paying,” she said.
Analysis by consumer group Which? found that an investor with £100,000 in a Hargreaves Lansdown stocks and shares Isa would be charged an annual £365.60 fee if they made four trade purchases and four sales each year from March. This is above the £220.05 average charged by Britain’s most popular investment platforms.
