Hargreaves Lansdown Review

This article was last updated on June 11, 2020

This article will review Hargreaves Lansdown in the UK and ask if it is a good platform to invest on.

If you have any questions or want to invest, you can email me (advcie@adamfayed.com) or contact me on the chat function below.

For those that prefer video content, I have summarized the content on the video below:

Introduction:

Hargreaves Lansdown PLC is a Bristol-based financial service company, which provides funds and shares to its customers. It is listed on the ‘LSE (London Stock Exchange)’ and a constituent of the Index ‘FTSE 100 (Financial Times Stock Exchange 100)’, which is a major Index comprising of the biggest listed companies in the United Kingdom. 

It was founded in the year ‘1981’ by two persons called ‘Peter Hargreaves’ and ‘Stephen Lansdown’. In the beginning, they used to provide information to their clients regarding Unit Trusts and Tax Planning matters. Hargreaves Lansdown was listed on LSE in the year 2007.

It provides the investors with a wide variety of investment options along with some exquisite features like a user-friendly mobile app, good research, etc. some disadvantages are present while having an account with Hargreaves and Lansdown like little bit expensive prices, average resources for education and charting tools, etc.

HL (Hargreaves Lansdown) is considered as one of the best UK-based brokers available. It is regulated by the ‘FCA (Financial Conduct Authority)’ and is considered to be a safe available option for trading by many people.

It is also suggested as the best available option for the investors (either beginners or buy-and-hold investors) who are looking for excellent customer service and user-friendly trading platform.

A lot of people have many questions related to Hargreaves Lansdown such as “Is Hargreaves Lansdown safe?”, “What is the fee structure for HL?”, etc. we are going to cover all such queries and FAQs related to having an account with Hargreaves Lansdown in this article.

The overall rating given for the Hargreaves Lansdown by some reputable investment-related websites is given below.

Website Overall rating
Trustpilot 3 stars out of 5
BROKERCHOOSER 4.4 stars out of 5
StockBrokers 4.5 stars out of 5
BROKERNOTES 3 stars out of 5
Drewberry 4.9 stars out of 5

Fees and Commissions charged by HL:

Hargreaves Lansdown is known for its expensive trading fees while making an investment in stocks and ETFs. However, the fees for trading with Funds and Bonds on HL is quite low when compared to other online brokers. 

For US stocks, HL charges high-level fees. When an investor is willing to make 0-9 trades, the fees per each trade will be ‘£11.95’. For 10-19 trades, it is ‘£8.95’ per each trade and for more than 20 trades, it is ‘£5.95’ per trade.

For Mutual Funds, the fees on HL are low when compared to many other online brokers. For investments in mutual funds up to £250k, ‘0.45%’ of the value of trade is charged as fees.

For investments ranging from £250k – £1 million, ‘0.25%’ of the trade value is charged and for the margin from £1 million to £2 million, the fees are ‘0.10%’ of the trade value. There are no fees applicable to investments valuing more than £2 million.

Another advantage related to the fees while trading with HL is that there is no inactivity fee (fees generally charged when an account is kept idle without any sort of activity for a certain amount of time).

Generally, two sorts of fees are applicable for the investors on their investments while trading with the help of any online broker. They are 1.) Trading Fees and 2.) Non-trading Fees.

‘Trading fees’ – These are the type of fees that occur while trading. The types of trading fees that are applicable to an investor, in general, are ‘Commissions’, ‘Spread Costs’, ‘Financing Rates’, etc.

Trading fees at HL can be considered as average as the Stock and ETF fees are high whereas Fund and Bond fees are low. 

As we have already discussed, the stock and ETF fees are high on HL and some other brokers such as ‘Degiro’, ‘Saxo bank’, etc., provide much lesser fees.

For example, the fees on HL for a $2000 trade on US stocks, UK stocks, and German stocks are $14.3, whereas Degiro and Saxo Bank provide much lesser prices.

The fees for trading with stocks are based on the volume of the trades made in the previous month. The more trades made by the investor in the previous month, the lesser the fees.

Fund fees on HL are comparatively low among other online brokers. For the investors who are willing to trade (buy and sell) frequently, HL is considered to be the best available option as it doesn’t charge commissions for opening or closing a mutual fund position.

For a $2000 trade in funds, the fees are $0. However, fees are applicable for holding a fund which is based on the volume. For the trades with a value exceeding more than £2 million, the annual fund fees are absolutely free. Generally, the amount of fees that is equivalent to one month based on the annual fee is calculated and charged on a monthly basis. 

The Bond fees are also very low on HL and slightly high among a few online brokers. For example, the bond fees of HL for a $10,000 government bond trade are $14.3 which very low when compared to Saxo Bank ($88.0) and slightly higher when compared to Degiro ($11.3).

The above-mentioned are the prices that are applicable while trading online and investors can also be able to trade using a phone. Phone trades are considered to have high prices (1% of the value of trade with a minimum of £20 and a maximum of £50).

In addition to these, the user is charged for Portfolio+ (portfolios managed by the HL’s fund managers). The fees for Portfolio+ are of two types. They are:

  • Commissions for mutual funds
  • Annual management fee

The annual management fee differs based on the performance of the portfolio and on average, the management fees can be somewhere around 1.3% to 1.45%.

‘Non-trading fees’ – These are the type of fees which are not related to trading. Some of the examples for the non-trading fees are ‘Withdrawal Fees’, ‘Inactivity Fees’, ‘Account opening fees’, etc.

At HL, there are no inactivity fees or withdrawal fees applicable to the investor which is considered as a major advantage while trading. There is no account fee for opening a standard Fund & Share Account. 

However, account fees are charged for opening a SIPP (Self Invested Personal pension) account or an ISA (Individual Savings Account). The account fees for SIPP or ISA accounts are 0.45% of the value of trade. 

Another advantage of having the SIPP or ISA account is that the annual fee cannot exceed the annual fee cap. The annual fee cap for SIPP is £200 and £45 for an ISA account.

For the assets of currency other than the GBP, a currency conversion fee is charged which depends on the trade value. For the first £5,000 traded, the conversion charges are ‘1%’ of the trade value, ‘0.75%’ for the next £5,000, ‘0.50%’ for the next £10,000, and for the trade value exceeding over £20,000 the conversion charges are ‘0.25%’.

Opening an Account:

The account opening process at Hargreaves Lansdown is very easy and fast. It can be done digitally for the investors residing in the UK and the verification process can be completed online. If the verification is unsuccessful or the person is from outside of the United Kingdom, the documents required for verification must be scanned and sent through the post.

There are many types of accounts available within the HL and the minimum deposit to be made varies depending on the type of account. The accounts at Hargreaves Lansdown are:

  • Stocks and Shares ISA
  • Junior Stocks and Shares ISA
  • Lifetime ISA
  • Self Invested Personal Pension (SIPP)
  • Fund & Share Account
  • Active Savings
  • Junior Investment Account
  • Junior SIPP

‘Stocks and Shares ISA’ – By creating this type of account the investor is able to get access to a wide range of investment classes. With the help of an ISA account, an investor can make an investment that is free from taxes until they reach the yearly limit. Around 2500 funds, shares, and investment trusts are accessible with this and an investor is able to fund their account up to £20,000 annually in order to invest in the stock market.

‘Junior ISA’ – this account is for children under 18 years and with the help of this account, young investors are able to get access to investments along with affordable taxes. 

The junior ISA account can only be opened by a parent or a guardian in the name of their child. Any of the friends or family of the child is also able to fund the junior ISA account. However, there is a limit for the amount of money that can be invested within a junior ISA account. 

The children after acquiring the age of 18 years are able to access the money in their account without any taxes or costs for the withdrawal.

‘Lifetime ISA’ – the age limit for a person to open a Lifetime ISA account is from 18 years to 39 years and must be able to represent a flexible way of saving cash/investing in the stock market. 

The amount save within this account is from the UK tax and an extra 25% is provided by the government for up to £1,000 annually. Any person can be able to invest up to £4,000 (an additional £1,000 from the government) within this type of account from Hargreaves Lansdown.

The amount saved within this type of account can be taken out after 12 months for buying a house (worth £450,000) or the person can wait until they turn 60 years to withdraw.

In case of failing to buy a house with money that has been withdrawn or withdrawing the money earlier may lead to a charge of 25% by the government and the government makes sure that the person receives a lesser amount than the amount they have actually invested. 

‘Self-Invested Personal Pension (SIPP)’ – this type of account is considered as a tax-efficient account for the purpose of pension/retirement investment. The investor is able to control the choice of investments with the help of this account. Similar to the Shares and Stocks ISA account, the SIPP account also provides access to 2500 (which includes both the shares of the United Kingdom and overseas). 

Any person can be able to create a SIPP account whose age doesn’t exceed 75 years and can be able to fund their account up to £40,000 annually. The limit which has not been used in the previous year can be carried forward to the next year.

‘Fund and Share account’ – this type of account is the basic investment account provided within the Hargreaves and Lansdown. This is considered as a flexible account with user-friendly costs that allow the investor to buy or sell or hold their assets in their account. This type of account can be created very fast only with the help of a debit card number and the required documentation. 

‘Active savings account’ – with the help of this account, the investor is able to select from a wide range of savings products. With only a minimum deposit of £1 and debit card information, any individual is able to open a active savings account from HL. 

The person can be able to check the rates that they receive through this account can be able to easily monitor their investments very effectively.

‘Junior SIPP account’ – This is a SIPP account which is especially for children (below 18 years of age). There is no investment limit for this type of account. There are rules for the withdrawal and the money can be taken out at any time and can be used for necessary purposes such as the educational fee. 

Holding the assets inside the account can be considered as highly beneficial for children (either for a short time period or longer). 

The process of opening an account can be done entirely online for the residents of the United Kingdom and people from other countries can also be able to create an account very easily. The verification process can be done online for the residents of the UK.

There might be some cases when the process might fail for some reason. For example, the recent relocation of the investor (this might either be from another country to the UK or from the UK to another country). the reason for the failure can be known by the user by contacting the customer support of HL. 

For the users who are from outside of the UK or failure of the verification process, the person is able to fill the application form and post the documents (such as proof of residency, identity, etc.). the application process is as follows.

  • First, the person is required to fill the physical application form.
  • Next, a scanned copies of identity proof such as international passport/ Driver’s license/ firearms license/ evidence of person’s entitlement to a state or local authority funded benefit, pension, grants, tax credit, etc. 
  • After that, scanned copies of the current council tax statement (dated within the previous three months)/existing bank statement/utility bill (issued within the previous three months).

For the residents of the United Kingdom, a cheque with the amount that they want to fund their account is also required. 

Deposits and Withdrawals:

The process of deposits and withdrawals within the HL are considered to be easy and hassle-free. The transfers can be done with the help of a debit card or bank transfer. The base currency for the account is GBP and the transactions can only be done in GBP. 

For the people who want to change the base currency to another, the conversion charges are applicable. This can be considered as a huge backdrop while withdrawing as many other online brokers offer more base currencies in which the customer is able to withdraw.

‘Deposits’ – Hargreaves Lansdown does not charge any type of Deposit fees to its customers. There are only two options available for the customer. They are 1.) Bank Transfer and 2.) Credit/Debit card.

There is no availability of e-wallets (such as PayPal) for depositing money into the account and this might be considered as a major disadvantage as there are only a few online brokers which provide the option of e-wallet.

The time taken for the deposit through a debit/credit card is instant and the person is able to see the money that they have funded their account with instantly. Although, the method of bank transfer can be quite a delaying process and it can take up to as much as 2 days. The bank account (either for the debit/credit card or bank transfer) should be in the name of the investor only. 

‘Withdrawals’ – similar to the deposits, the withdrawals can also be done only with the help of a credit/debit card or Bank transfer. There is no option of e-wallets for the withdrawals too. Withdrawals are also free with Hargreaves Lansdown.

The withdrawal process (either from a credit/debit card or a bank transfer) can take up to 2 days.

Trading Platforms and tools:

The trading platform of HL can be considered as an easy and user-friendly one. The mobile application is also very easy to understand and effective. Although the charting tools aren’t available, the research tools are considered as very effective.

‘Web-trading Platform’ – The web-based platform is very great and effective. However, there is a lack of a two-step safe user login and lacks effective customizability. It offers excellent fee reports and has an exquisite search function.

There are two ways that a person is able to access the web trading platform of Hargreaves Lansdown. The first way is through the traditional HL’s platform for all the account types except the CFD and Spread betting account. The second way is specially designed to access the CFD Spread betting account, this is done with the help of IG (Investor’s Gold) trading account. 

The major disadvantages that need to be considered while trading on the web-based platform are:

  1. There is no availability of two-step safe user authentication.
  2. The customizability is limited for charts, workspace, etc.
  3. The web-based platform is available in only English.

The design is good and very easily manageable. The disadvantage is that it cannot be customized. The login feature is somewhat effective and comes with a secret number after registration and during the login, the system asks for any three random digits of the six-digit secure number.

The search functionality is quite effective and the desired results can be obtained by typing the respective company’s name or asset’s name. Funds can also be searched by selecting the provider of the funds or the sector.

The order types within the HL are Market, Limit, Stop Loss, Stop Trailing, Good ‘til time (GTT), and Fill or Kill (FOK).

Alerts and notifications can be received for UK stocks. The range is limited for alerts and alerts can be set only for the price moves, dividend payouts, and news announcements.

The HL’s web-based platform offers clear fee reports as well as the portfolios. For any asset, the costs for the upcoming 5 years can be checked for a £5,000 trade.

‘Mobile Trading Platform’ – The mobile platform of HL also offers a good, effective, and easy-to-understand interface. Just like the web trading platform, the mobile platform also lacks the two-step safe login feature. Another disadvantage that needs to be considered is that there are no price alerts while using the mobile platform.

An advantage while using the mobile platform is that biometric identification can be used for login, which can either be the fingerprint or face depending on the device used by the customer.

‘Desktop Trading Platform’ – There is no availability of a desktop trading platform on Hargreaves Lansdown. 

‘Markets and Products’ – the investor is able to access stocks, ETFs, funds, and bonds using Hargreaves Lansdown. There is no availability of options and futures, while trades in forex, CFDs, and cryptocurrencies can be done with the help of an IG trading account or other brokers.

Asset Class Number of Providers
Stocks 21
ETFs 1,400
Funds 164
Bonds 350

‘Portfolio+’ – the investor is able to invest in portfolios managed by the fund managers at HL, which can be a great option if a person is not willing to manage their investments on their own. The minimum amount that needs to be invested should be £1,000 and there are charges such as the annual management fees and commissions for the mutual funds. 

‘Venture Capitalist Trusts’ – VCTs let the investor make an investment in some small startup companies. The minimum investment amount is very high and can be around £3,000 to £6,000.

‘Research’ – the research tools at the HL are considered to be user-friendly along with excellent trading ideas as well as good fundamental asset data. Charting tools and analytical tools are good, but they are considered to be basic. The news feed is exceptional and consists of news, reports, tips, and announcements.

‘Education’ – Trading platform tutorial along with some good quality educational videos, live seminars conducted in the UK, educational articles, etc. are provided in order to be helpful for investors of beginner level. However, HL doesn’t provide the user with a demo account.

Customer Support:

The customer support team is very effective and responds within a limited time. The answers and solutions given by customer support are useful and relevant. They don’t provide a 24/7 support to the users and live chat option is not available for the customers.

Customers can only get answers to their queries only with the help of a phone call or an email. The answers can be acquired instantly using phone support, whereas the email can take somewhat around 24 hrs.

The answers provided by the customer support are quite useful and provide all the required information to the customer.

Conclusion:

Hargreaves Lansdown is a well reputable firm and is regulated by the top-tier regulator FCA and is listed on a stock exchange, hence, it can be considered to be safe as there is a high level of investor protection.

Even though, it is suggested that an investor should be aware of all the above-mentioned aspects and consult a good financial advisor (like us) and be able to strategize a good and effective plan about their investments.

Investments can be riskier and the person should therefore not hesitate to take help from a person who is familiar with all the details related to investments. By doing so, they might be able to receive a lot of benefits from their investments.

Further reading

How much do you need to invest to have a million dollar or pound portfolio?

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