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Hargreaves: we won't go lower than 28 bps
by Jun Merrett on Apr 30, 2013 at 10:05
Hargreaves Lansdown has said it will not offer a price lower than 28 basis points when it launches its rebate free charging structure on 1 January 2014.
Chief executive Ian Gorham said due to the company’s cost base it would have to charges clients at least 28 bps in order to remain profitable.
'If we charge less than 28bps we'd make a loss. That is the minimum we'd have to charge to make a profit,’ he said.
Gorham (pictured) said the charges would be tiered and percentage-based which would allow Hargreaves to be competitive for both big and small clients.
'Percentage-based is better for small investors as investors usually make small investments and we want to be the friend of the small investor,’ he said.
'We want to appeal to small investors but also acknowledge the larger ones. If you've got £1, £2 or £3 million [the tiered structure] makes sense.'
Last week the Financial Conduct Authority extended its ban on cash rebates and fund manager payments to execution-only platforms, as well banning legacy rebates. Platforms have until 2016 to fully comply with the rules.
The company is currently in talks with fund groups and asked them to offer it their best prices, estimating this will take six months with more details to be published in the autumn.
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by Michelle Abrego on Mar 11, 2014 at 10:45