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Charles Stanley stokes war of words with Hargreaves Lansdown over FCA probe
by Elsa Buchanan on Oct 08, 2013 at 15:01
Charles Stanley Direct says the FCA’s review of the execution-only market will ascertain whether the preferred funds lists of Hargreaves Lansdown and other platforms are ‘fair and transparent’.
The firm’s direct-to client investment service, which launched in the first quarter, has welcomed the review, saying it has nothing to fear and it is interested in the regulator’s findings.
A Charles Stanley spokesperson told Wealth Manager: ‘The one area we are most interested in is Hargreaves Lansdown’s ‘core 30’, or most featured funds, and if clients will be aware of the commercial element of their relationship with the fund groups in the core list.
‘The FCA’s review could show us if that is fair and transparent and whether the end customer is being treated fairly.’
'End clients need to understand how much those fees are affecting their performance and the total cost of them. When the penny drops around the country about how much these investments are costing, we’ll know what is transparent and what is not.'
In response to the comments, Hargreaves Lansdown’s head of financial planning Danny Cox (pictured) said he also backs the review, describing it as positive for consumer protection.
He said: ‘The execution-only sector has a vital role to play in delivering good outcomes for UK investors. Any FCA review of the sector is likely to increase clarity around execution-only services and strengthen investor confidence; as the UK’s largest and most successful direct to consumer investment services provider, we welcome such a review.
‘We are also delighted that our competitors are more interested in talking to the media about our business than they are their own, as this helps us to keep our overheads down.’
Cox added: ‘The FCA is recognising that with the growing numbers of new operations, early scrutiny of these should eliminate any issues before they start, so this is a good step by the regulator to protect consumers.'
As revealed by Wealth Manager back in May, Hargreaves Lansdown called for best pricing from asset managers, alongside a strong performance track record, for funds to be considered for its revamped preferred fund lists. This comes ahead of its planned switch to offering clean share classes early next year.
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