The Platforum is an independent research firm which specialises in investment platforms and works with major fund managers, life companies and platforms.
The Platforum’s managing director Holly Mackay says: "Hargreaves' customer service is always excellent."
While good customer service is to be applauded, if you think costs are more important, then you should be cottoning on to the fact that Hargreaves is far from the lowest-cost fund platform. And this may lead you to consider transferring out.
Since 1 January 2013, as part of the changes brought in under the Financial Services Authority’s Retail Distribution Review, platforms have been obliged to make it easier for customers to move their investments between fund platforms while staying invested in their funds, a process known as an 'in-specie' transfer. The move was designed to increase competition between providers, offer greater choice and enable consumers to move easily to platforms where they might benefit from lower charging structures or more generous trail commission rebates.
However, a rival platform points out that once Hargreaves and other market leading platforms get you in as a customer it is difficult to transfer out as the costs are high.
Ian Williams, managing director of Cavendish Online, which has some of the lowest costs among fund platforms, has criticised Hargreaves Lansdown, alongside BestInvest and Alliance Trust Savings, for what he describes as their "rip-off" charges for in-specie transfers. Mr Williams says he felt obliged to comment when he heard of one customer wishing to switch their funds from Hargreaves Lansdown to Cavendish Online who was going to be charged £810 by Hargreaves Lansdown for transferring 27 funds.
Several platforms impose fees for every fund switched to a new platform with Hargreaves Lansdown charging £30 per fund, BestInvest £25 per fund and Alliance Trust Savings £15 per fund. Mr Williams believes these charges contravene the spirit of the new rules and are designed to dissuade customers from leaving the platforms in search of better value. Cavendish Online does not charge for in-specie transfers out.
However, some platforms also pay towards the cost of any in specie transfers that you wish to make. For example, Bestinvest will pay £500 per person towards exit fees incurred in transferring holdings to Bestinvest. Barclays Stockbrokers, Fidelity and TD Direct Investing are also offering cash back on transfers into their platforms.
If you wish to re-register your holdings with another fund platform then you need to fill out a transfer form from the new platform, who will then contact your current provider.
Fund platform transfer costs
| Fund platform | Charge per holding for in specie transfers out of stocks and funds | Payment towards cost of in specie transfers in |
| Hargreaves Lansdown | £30 | £0 |
| Barclays Stockbrokers | £30 | £25 to £1,000 cash back available depending on amount transferred. |
| Fidelity | £0 | Up to £300 per person to cover exit fees from your previous provider. Plus 0.75% cash back on the total value that you move before 30 April 2013 |
| TD Direct Investing | £35 | £75 to £1,000 cash back available on Isas depending on amount transferred. |
| Selftrade | £15 | Up to £300 per person to cover exit fees from your previous provider. |
| Alliance Trust Savings | £15 | £0 |
| Bestinvest | £25 | £500 per person towards exit fees |
| Cavendish Online | £0 | £0 |
Source: Investors Chronicle using information provided on the fund platforms' websites.
