I’ve always said that investing is a relationship business. Whether it be with a broker, a salesperson, a trading platform or a colour scheme. Choosing a broker can be in some cases more about how they treat you and how they make you feel rather than cold hard cash.
It’s for those reasons that when we compare investment providers, we don’t just do it on price. We compare features and delve deeper into the ethos of a broker by talking to people at the top. When buying things like car insurance, you just go with the cheapest provider. But with investing it’s a much more intense relationship. Most active investors are probably interacting with their broker first thing in the morning and last thing at night.
I remember when I was a stockbroker, at what was then Walker Crips Weddle Beck. I used to sit behind one of the oldest brokers left in the city, I think he was 92. His clients used to write into him for portfolio updates and prices. He, in turn, would lean over and say, “Dear boy, may I borrow your FT, I need to report some prices to a client’. He’d then write a letter to his client with an update and some recommendations if anything needed changing. The whole process taking about a week I’d say.
This wasn’t that long ago either, probably fifteen years when there was the internet, email and so on. But people like what they like. And one thing that people like most of all, is relationships.
In the original Hargreaves Lansdown founders’ biography, In for a Penny, Peter Hargreaves said that he likes to invest in companies he likes doing business with. And that’s really quite relevant, because, when you choose an investment account, you are really entering into a life long relationship.
So, here, we hear from Chris Hill, the most recent CEO of Hargreaves Lansdown on what makes their investment service so appealing.
What’s your favourite thing about running Hargreaves Lansdown since becoming CEO and taking the reins from the founder, Peter Hargreaves?
The people. Hargreaves Lansdown is the most client focused business I have ever experienced and we have exceptionally talented and hard-working people here. Fundamentally we are here to help people, to empower them to save and invest with confidence, and I enjoy the fact that we are helping people to make good decisions which will improve their financial lives.
And the hardest part? Is there anything that you’ve wanted to push that’s been particularly challenging?
Being a CEO is a tough job, but I love the challenge. I’m very ambitious for the business and frustrated at times with the pace of change when you look at other industries. People experience Amazon, Uber, Netflix so differently to financial services and our challenge is to try and offer clients a similar or better experience.
I’ve often heard Hargreaves Lansdown compared to Waitrose. Not necessarily the cheapest, but with excellent products and service. Do you think there is a danger in investment providers entering a race to the bottom in pricing at the sacrifice of customer service?
We don’t think about our service like this. Our focus is on our clients and their experience, putting their needs first whatever their stage of life. We listen to them, constantly asking for their feedback and views, and what they want from their service so we can understand what matters to them and shape their experience accordingly.
Great service isn’t just about the 1.7 million client calls we answered last year, the majority within 6 seconds, and the 5,000 emails and letters a week (although we are very good at that), its about being a trusted and financially secure home for people’s hard earned savings. Great service is bringing together over 35 years of knowledge, expertise and technology to provide a user experience that really helps people. Great service is making things easy – a challenge in what is still a very paper based industry – encouraging people and giving them the confidence to make good decisions.
Its also about replacing the mobile app with a better one when you didn’t need to, not to add bells and whistles for the sake of it, but to make the user experience better. Its about making it even easier to select and invest in high performing funds and using our scale to cut prices. Its spending the time and effort finding a better way to help people get a better rate on their cash by and making it easier to manage their cash savings.
We take a lot of pride in the service and experience we offer and we work very hard to continue to find better ways which make it easier and quicker to manage money.
Hargreaves Lansdown has always had a pretty diverse offering of investment accounts. Is there any type of investment that you do not currently offer, but would like to add? Seed or property for example…
Our service is helping people to manage their investments and savings all in one place. We were the first to launch a Junior ISA in 2011 and the first to launch a Lifetime ISA in 2016. Active Savings is also a first and Easy Access launched last month.
It’s early days and we are learning how clients are using he service and how the marketplace is working. We now have 9 partner banks and we would like to develop the service and in the fullness of time launch a cash ISA.
We expect that the more banks and products on the marketplace, the better the rates for savers, and they are very good already.
And finally, what would you say are you top three online resources that investors can use to improve their strategies and performance?
Well I’m bound to say the Hargreaves Lansdown website with its extensive investment research, charting tools and ease of execution to name but three. We have a team of 19 in our investment research team which spends over 23,000 hours a year helping people make good investment decisions. This expertise is available to everyone for free.
You can also pick up the phone if you need help as 70% of our clients do. It is easy to underestimate how important an offline service is to the online.
That aside, choose a service which suits the way you want to use it. Increasingly people want to be able to access both information and trading facilities on the move through good mobile apps, so you can get information and place deals whenever you want to.
I come back to the Amazon and Netflix experiences – increasingly people want immediacy of services through their phone. HL now has more clients log in through mobile than through a desktop PC.
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.