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View the article online at http://citywire.co.uk/wealth-manager/article/a727982

Hargreaves unveils unbundled pricing structure

by Jun Merrett on Jan 15, 2014 at 07:07

Hargreaves unveils unbundled pricing structure

Hargreaves Lansdown has unveiled its new unbundled tiered pricing structure for its Vantage platform.

The tiered charging structure is:

  • £0- £250,000: 0.45%
  • £250,000 to £1 million: 0.25%
  • £1 million to £2 million: 0.1%
  • From £2 million above: no charge

From 1 March 2014 the average annual management charge (AMC) for a Wealth 150 fund will fall to approximately 0.65%. Hargreaves said the average AMC charges will compare favourably to the standard AMC of 0.76% for the same funds and give an average discount of 0.11% for Hargreaves clients.

Hargreaves has also selected 27 funds from its Wealth 150 list which will make up a new list called the Wealth 150+ where the average AMC will be 0.54%.

The average AMC for funds available on Vantage which are not in the Wealth 150 is 0.71%, including passives.

The company will reveal the full list of the 27 funds who have offered it super clean deals on 1 March.

The execution-only platform was set to announce its pricing structure at the end of 2013 but delayed it until 2014 so it could refine its Wealth 150 list of funds.

The platform is required to implement the new structure from 6 April 2014.

Hargreaves has estimated the new pricing structure represents a £8 million cost based on its financial results for the year ended 30 June 2013.It also believes there could be a £9 million hit on its revenues as it approaches April 2016 when legacy rebates will be banned.

At the start of trading the firm's shares were down 2.6%, or 39p, at £14.69, lagging the FTSE which was marginally up.

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