If you listened to our weekly Companies and Markets podcast, you will have heard Phil Oakley and me discussing this at length. The short summary is that Hargreaves – and it is not alone – has made lots and lots of money doing very little other than arranging for their customers to buy and hold open-ended funds such as Neil Woodford’s ill-fated Equity Income Fund through its platform.
For this, it charges an annual percentage fee based on the amount of funds customers hold, a fee that, incidentally, it does not levy on other assets such as investments trusts, shares and ETFs. It is unsurprising, then, that its promotional efforts – like its Wealth 50 list – are often focused on encouraging customers to buy more funds, which now account for around half of the assets held by its customers.