Investment platform Hargreaves Lansdown is witnessing a significant exodus of client funds as customers react to upcoming changes in its fee structure. Savers are reportedly pulling tens of millions of pounds from the Bristol-based firm, which serves approximately two million investors across the United Kingdom.
Pricing Overhaul Sparks Client Movement
The financial services provider announced its intention to completely revamp its pricing model just two weeks ago, with the new structure scheduled to take effect from March 2026. While the company plans to reduce its annual account and share-dealing fees, it will simultaneously introduce charges for fund trading activities.
The headline portfolio charge will decrease from 0.45 percent to 0.35 percent, representing a notable reduction for many investors. However, the annual price cap on certain shares fees will see a substantial increase, rising from £45 to £150 per year. This mixed approach has created uncertainty among the platform's user base.
Competitors Report Record Influx
Rival investment firms have capitalised on this uncertainty, reporting unprecedented levels of customer switching activity. Michael Healy, managing director at IG, confirmed to the Telegraph newspaper that his firm has experienced a "significant influx of customers moving over to us" in recent weeks.
Charlotte Ransom of wealth planning firm Netwealth observed that "fee changes tend to act as a catalyst for customers to re-engage with and better understand their overall charges." This sentiment appears to be driving much of the current movement within the investment platform sector.
Impact on Different Investor Groups
Holly Mackay, founder of independent financial platform Boring Money, highlighted how the changes will affect various investor demographics differently. "Less confident people or first-timers often don't know for sure what they're paying," she noted, adding that "the changes to Hargreaves Lansdown's charges will typically hit older, more savvy investors, who max out their Isas most years and so use a general investment account."
Mackay further explained that previously, investors could hold exchange-traded funds (ETFs) and investment trusts without paying ongoing charges, but this arrangement will change under the new pricing structure.
Platform Switching Accelerates
Charlie Musson of AJ Bell confirmed that his company has "seen an increase in customers switching platforms to us in recent weeks," indicating a broader trend of investor migration across the financial services industry.
This movement represents a significant challenge for Hargreaves Lansdown, which has traditionally maintained strong customer loyalty within the UK investment platform market.
Company Defends Pricing Strategy
Simon Belsham of Hargreaves Lansdown defended the company's approach, stating that "our refreshed pricing model represents an investment of tens of millions of pounds that will see eight in 10 clients either better off or paying the same as today when all elements are considered together."
Belsham emphasised that the company conducted extensive analysis to determine the optimal way to reinvest in value, basing decisions on a comprehensive review of client behaviour and needs. He reported receiving positive feedback from some clients and noted that others who had previously considered leaving have now chosen to remain with the platform.
The coming months will reveal whether Hargreaves Lansdown's pricing overhaul ultimately strengthens its market position or accelerates client attrition to competing platforms offering different fee structures and services.
