In a significant strategic shift, Hargreaves Lansdown, the UK's largest DIY investment platform, has announced a comprehensive overhaul of its fee structure, set to take effect from March. This move comes as the company grapples with escalating competition within the financial services industry, aiming to reinvigorate its business model while impacting its 2 million-plus customer base.
Fee Changes: Cuts and New Charges
The fee overhaul represents the first major pricing revision in over a decade for Hargreaves Lansdown. The company will reduce its annual account fee, often referred to as the "headline" platform charge, from 0.45 per cent to 0.35 per cent. Additionally, share trading fees will see a substantial cut, dropping from £11.95 to £6.95 per trade. For customers with ready-made pension plans, fees will fall from 0.75 per cent per year to 0.45 per cent.
However, the changes are not universally beneficial. A new charge of £1.95 will be introduced for fund trades, although customers who have set up monthly automated investments will be exempt from this fee. According to the firm, approximately eight in ten customers will pay either lower fees or the same amount under the new structure. Yet, one in ten will face an increase of up to £1 more each month, and three per cent of customers will see their costs rise by £10 or more monthly.
Industry Reaction and Investor Clarity
While some industry figures have welcomed the fee reductions, others have expressed concerns about the complexity of the changes. Andrey Dobrynin, chief executive and founder of Invest Engine, commented on the implications for retail investors. He noted that lowering headline fees can help investors build wealth more quickly by reducing costs that erode returns over time.
"However, a reduction in platform fees can be accompanied by the introduction of other costs, in this case new dealing charges to funds, something that was previously free for their customers," Dobrynin explained. "This makes it incredibly hard for average retail investors to know if they are truly getting a good deal on fees and charges from their provider."
Competitive Pressures Drive Change
The fee overhaul is a direct response to intensifying competition within the investment platform sector. Hargreaves Lansdown faces pressure from various quarters, including prominent financial service companies like JP Morgan and Chase, which have entered the market. Digital-only platforms, such as Robinhood, have also tightened their grip, with other digital players emerging to challenge established firms.
Richard Flint, chief executive of Hargreaves Lansdown, emphasised that the move is about reinvigorating the business to better compete with other platforms. "Competition has been developing for quite a long time and it's not a surprise, it's coming in many different forms," he told the Financial Times. The changes are expected to cost the company tens of millions of pounds, reflecting its commitment to staying competitive in a rapidly evolving landscape.
A Pivotal Moment in Company History
This fee overhaul marks another pivotal decision for Hargreaves Lansdown, which has undergone significant transformations over the past year. Founded in 1981 by Peter Hargreaves and Stephen Lansdown, the company was the first to sell funds directly to investors and floated on the London Stock Exchange in 2007.
In March 2025, a consortium of private equity firms, including CVC Capital Partners, Nordic Capital, and Abu Dhabi's Platinum Ivy, completed a £5.4 billion takeover of the company at £11.40 per share. As part of this deal, Hargreaves sold half of his 20 per cent stake, retaining roughly 10 per cent and netting over £500 million. Lansdown sold his entire near 6 per cent stake, describing it as a "bittersweet moment."
Earlier this month, the firm confirmed that Flint will step down as chief executive to become deputy chair. He will be succeeded by Matt Benchener, who was poached from rival Vanguard, where he runs the personal investment business in the US, serving several million clients. Benchener is set to join in March for a handover period before assuming the top role in July, signalling a new chapter for the company as it navigates these fee changes and competitive challenges.
