Hargreaves Lansdown Versus Interactive Investor

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Hargreaves Lansdown Review

Is it time to move your money away from Hargreaves Lansdown?

Hargreaves Lansdown has been making headlines recently. This is due to the fact that the firm โ€“ย which operates the largest investment platform in the UK with nearly two million customers โ€“ has received multiple bids from a private equity consortium (good news for long-term shareholders but not so good for anyone who bought HL shares near their highs).

Given that Hargreaves Lansdown has been in the spotlight, we thought it would be a good idea to examine the companyโ€™s annual fees and charges to see if theyโ€™re still competitive. Could it be time to move your investments from Hargreaves Lansdown to another provider to reduce your investment costs?

HL Stocks and Shares ISA fees

A lot of UK investors invest within Stocks and Shares ISAs. With these accounts, capital gains and income are tax-free.

Now with Hargreaves Lansdownโ€™s Stocks and Shares ISA, there are different fee structures for stocks and funds.

For stocks (UK and international shares, investment trusts, ETFs, gilts and bonds), thereโ€™s a 0.45% charge, which is capped at ยฃ45 per year.

Meanwhile, for funds, charges are calculated in bands:

  • ยฃ0 – ยฃ250,000 โ€“ 0.45%
  • ยฃ250,000 – ยฃ1m โ€“ 0.25%
  • ยฃ1m – ยฃ2m โ€“ 0.1%
  • Over ยฃ2m โ€“ No charge

So, letโ€™s say an investor had a ยฃ200k portfolio of stocks. Here, the annual fees would be just ยฃ45. That looks competitive. A ยฃ45 annual fee on a ยฃ200k portfolio equates to a charge of just 0.02% per year (note that we are ignoring trading fees here).

However, if the investor had a ยฃ200k portfolio of funds, itโ€™s a different story. Here, the annual charges would be ยฃ900. Thatโ€™s relatively high. By moving to a different platform, the investor could potentially save a lot of money. For example, if they moved to Interactive Investor, which offers an โ€˜Investor Planโ€™ for just ยฃ11.99 a month, their annual charges would be just ยฃ144 per year. That would represent a saving of ยฃ756 per year, which is significant.

HL SIPP fees

Looking at SIPPs (Self-Invested Personal Pensions), Hargreaves Lansdown offers different fee structures here too.

For stocks (UK and overseas shares, investment trusts, ETFs, gilts and bonds), thereโ€™s a 0.45% charge, capped at ยฃ200 per year.

Meanwhile, for funds, fees are as follows:

  • On the first ยฃ250,000 โ€“ 0.45%
  • On the value between ยฃ250,000 – ยฃ1m โ€“ 0.25%
  • On the value between ยฃ1m – ยฃ2m โ€“ 0.1%
  • On the value over ยฃ2m โ€“ No charge

Given these fees, a ยฃ200k SIPP consisting of stocks would be looking at annual charges of ยฃ200 while a ยฃ200k SIPP consisting of funds would be looking at annual charges of ยฃ900.

Again, the charges for stock portfolios are competitive. A ยฃ200 fee on a ยฃ200k portfolio equates to just 0.1%. This can be beaten โ€“ AJ Bellโ€™s fee for stock-based SIPPs is capped at ยฃ10 a month, which translates to ยฃ120 per year. Thatโ€™s not a huge difference though.

For fund portfolios, however, there are much cheaper options available. For example, with Interactive Investor, there is a ยฃ12.99 per month โ€˜Pension Builderโ€™ plan. That equates to just ยฃ156 per year. This could save an investor ยฃ744 per year in annual SIPP charges.

Takeaways

In summary, Hargreaves Lansdown offers pretty competitive annual charges for accounts that only hold stocks. However, for accounts that hold funds, its charges are high.

Of course, when comparing investment platforms, fees and charges are not the only factor to consider. Itโ€™s important to also think about things like platform reliability, customer service, investment options, and research tools, and Hargreaves Lansdown excels in all of these areas.

But for those looking to cut their investment costs, it could be worth taking a look at some other providers. If youโ€™re looking for reviews of other brokers, you can find plenty of other options in our investing app comparison tables.

Tell us what you think:

Compare Hargreaves Lansdown versus Interactive Investor side-by-side and see which investment account offers the right account types, fee structure and market access for your investing.
โฌœ Public Companyโœ”๏ธ
๐Ÿ‘‰ Number Active Clients1,800,000
๐Ÿ’ฐ Minimum Depositยฃ1
๐Ÿ’ธ Client Fundsยฃ142 billion
๐Ÿ“… Founded1981
Account Costs
๐Ÿ‘‰ Investment Account
0%
๐Ÿ‘‰ SIPP
0.45%
๐Ÿ‘‰ Stocks & Shares ISA
0.45%
๐Ÿ‘‰ Junior ISA
0%
๐Ÿ‘‰ Lifetime ISA
0%
Dealing Costs
๐Ÿ‘‰ UK Shares
ยฃ11.95
๐Ÿ‘‰ US Stocks
ยฃ11.95
๐Ÿ‘‰ ETFs
ยฃ11.95
๐Ÿ‘‰ Bonds
ยฃ11.95
๐Ÿ‘‰ Fundsยฃ0
โฌœ Public CompanyโŒ
๐Ÿ‘‰ Number Active Clients400,000
๐Ÿ’ฐ Minimum Depositยฃ1
๐Ÿ’ธ Client Fundsยฃ55 billion
๐Ÿ“… Founded1995
Account Costs
โžก๏ธ Investment Account
ยฃ9.99 a month
โžก๏ธ SIPP
ยฃ10 a month
โžก๏ธ Stocks & Shares ISA
ยฃ9.99 a month
โžก๏ธ Junior ISA
ยฃ0
โžก๏ธ Lifetime ISA
n/a
Dealing Costs
โžก๏ธ UK Shares
ยฃ7.99
โžก๏ธ US Stocks
ยฃ7.99
โžก๏ธ ETFs
ยฃ7.99
โžก๏ธ Bonds
ยฃ7.99
โžก๏ธ Fundsยฃ7.99
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