Boost for regular investors as Hargreaves Lansdown cuts fees

Wealth manager Hargreaves Lansdown is cutting the cost of regular investing by dropping some of its charges for buying and selling investments, Wealth & Personal Finance can reveal.

From Tuesday, customers who invest regularly by direct debit will no longer be charged £1.50 for buying and selling shares, investment trusts and exchange-traded funds. Regular investing into funds is already free of charge.

The wealth platform is also removing fees for reinvesting dividend income into shares. Reinvesting dividends currently carries a one per cent fee, with a £1 minimum and up to a maximum fee of £10. 

Holly Mackay, founder of financial website Boring Money, says: ‘Hargreaves Lansdown has a reputation for being one of the more expensive online brokerages – but also for offering a good quality service.

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Cutting the cost: Customers who invest regularly by direct debit will no longer be charged £1.50 for buying and selling shares, investment trusts and exchange-traded funds

‘Although it still has a relatively expensive initial 0.45 per cent annual management charge, the move to cut regular trading fees is a positive step towards attracting investors to drip feed a small amount of money on a regular basis, which can be an appealing way to build up a long-term nest egg.’

Competition has been heating up among investment platforms in recent months, with several cutting fees for customers. Last month, Hargreaves Lansdown removed charges on its Junior Isas and cut the fee on its Lifetime Isa from 0.45 to 0.25 per cent.

In February, rival Interactive Investor launched its Investor Essentials product, to allow customers with up to £30,000 to invest for a competitively priced flat fee of £4.99 a month. 

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Keeping fees in check is essential to successful investing. While investors cannot control stock markets, how much they hand over to their investment platform and fund managers is in their power.

Hargreaves Lansdown has a 0.45 per cent management charge for fund investors up to £250,000, which falls to 0.25 per cent above this level up to £1 million.

Rival AJ Bell has an annual charge from 0.25 per cent, which drops to 0.1 per cent for those with more than £250,000 in their portfolio. Interactive Investor charges a £9.99-a-month fee for investors with over £30,000, which includes a ‘free’ trade each month.

Wealthify and Nutmeg charge an annual fee of around 0.76 and 1.03 per cent a year respectively, including trading charges.

Ruchir Rodrigues, commercial officer at Hargreaves Lansdown, says: ‘Cutting the cost of regularly saving is a commitment to support those at the start of their investment journey as well as passing on savings to loyal clients with a better value service.’

This post first appeared on Dailymail.co.uk