Investors have contacted Investors Chronicle to complain about Hargreaves Lansdown's forced selling of their investments to meet account fees.
The DIY investment platform requires investors to keep a minimum cash balance on account to meet account fees. If this is not in place, then Hargreaves Lansdown will sell investments to meet charges.
The company says it will normally sell units of the largest fund holding first. However, if investors do not hold funds Hargreaves says it "may sell part of other holdings".
Mark, an Investors Chronicle reader, says: "On Wednesday 9 April I received a contact note by post informing me that I had sold 98 shares in Taylor Wimpey.
"I telephoned Hargreaves Lansdown thinking that there was a mistake or that my account had been hacked into. I was told that Hargreaves had sold the shares to pay for annual account fees.
"I feel they just hacked into my account and took their fees when they wanted and took the stock they wanted.
"There was no confirmation or acknowledgement from me that they could debit my account or select a stock to sell that was cum-dividend."
In response to Mark's complaint, Hargreaves reversed the sales placed to cover its March fees and refunded the £1.50 dealing charge levied. It said the March fees would be collected alongside fees for April, "as an exceptional step" to give Mark "the opportunity to get used to the new fee collection arrangements".
Hargreaves Lansdown pays interest on cash held in its Vantage share and individual savings accounts accounts tiered within bands. However, the rates are extremely low. Customers currently receive 0 per cent on the first £999.99, 0.05 per cent (gross) on the amount above £1,000 and below £49,999.99 and 0.1 per cent (gross) on balances above £50,000. Hargreaves makes a substantial profit from client money held on deposit.
Other stockbrokers allow fees to be paid separately from your account. For example, Barclays Stockbrokers can debit a nominated bank account for Isa account charges. This can be better where the account is a tax-efficient wrapper as it allows more money to accumulate free of tax inside the wrapper.
Investors who are worried that they may be affected by Hargreaves Lansdown's automatic fee collection should sign up for the company's email alert service, whereby the company will email you if your cash balance falls below 50 per cent of the suggested minimum cash balance on your account. You can do this by logging on online and selecting 'email alerts', or by calling the helpdesk on 0117 900 9000.
