Investors won't be left wanting for account types at Hargreaves Lansdown, as this is one of the most comprehensive offerings I have encountered to date, as this table demonstrates:
General Investment Account (GIA)
Referred to as a Fund and Share Account, this is a good option for anyone who has maxed out their ISA. You can either start investing with a bank payment or by setting up a direct debit starting at £25 per month. The direct debit option means you swerve any dealing commissions (usually fairly hefty at this platform) or account charges. In order to invest in funds, you will need a minimum lump sum of £100.
There is also the option to transfer investments from elsewhere into your HL Fund and Share account.
ISA
As with any ISA, the Hargreaves Lansdown stocks and shares ISA allows users to invest free from any UK tax. There is an account charge of 0.45% for the ISA, and you should make sure you are aware of those high dealing charges.
One of the advantages of the HL ISA is the extensive range of investment options, in addition to the excellent range of educational material for those who are new to investing.
Read more about ISAs
Lifetime ISA
For those between 18 and 39, this is an excellent account specifically designed to help you save to purchase your first home or for retirement. What makes this account so special is the 25% bonus from the government of up to £1,000 per year.
What makes the Hargreaves Lansdown Lifetime ISA stand out is its access to a wide range of investment options with account charges that have recently been cut to 0.25%. However, those crippling dealing charges still apply, so again, this is a good option for buy-and-hold investors.
Read more about Lifetime ISAs
SIPP
The Hargreaves Lansdown SIPP gives you the flexibility to make monthly direct debits from as little as £25 a month or one-off payments of £100. Again, you can access the comprehensive range of investments or select one of the ready-made portfolios. With the human financial advice available at Hargreaves Lansdown, you can also opt to pay a financial advisor to choose your investments for you.
In March 2024, Hargreaves Lansdown introduced their ready-made pension plan, which is a simple and low-cost solution for inexperienced investors. It aims to invest in growth funds while you are young, gradually decreasing your exposure to risk as you reach retirement age.
The HL SIPP will set you back 0.45%, and it is free to buy and sell funds. However, if your pension pot is just under £250k, you could be paying up to £1125 a year for the SIPP, which is extremely high when compared to other providers. However, over £250k and the fee drops to 0.25% which is much more favourable.
Read more about SIPPs
Junior ISA
This is probably the best value product being offered at Hargreaves Lansdown. All account charges have been removed, and it's free to buy and sell investments within this account. This really is exceptionally good value for a premium product.
To demonstrate what excellent value I think this is, I have gone through the process of transferring my child’s trust fund to this account.
Read more about the transfer process below.
One of the advantages of using this account is that once your child turns 18, it will be a very simple process to transfer the funds from their junior ISA to the Hargreaves Lansdown Lifetime ISA.
Of course, you should remember that when a child turns 18, they take the reins on a Junior ISA and are at liberty to withdraw the full amount.
Junior SIPP (child's pension)
It's not often that I see this account option when reviewing these platforms, which demonstrates how comprehensive Hargreaves Lansdown's account options are. This is a nice add-on for parents who have already maxed out the Junior ISA allowance and would like to continue saving for their children in a tax-efficient way. Of course, it is worth remembering that your child cannot access this money until they retire, so you really are locking it away for the long term. However, the advantage of this account is that contributions to your child's pension fall under one of the inheritance tax exemptions and could therefore fall outside of your estate for inheritance tax purposes.
The limits on this account are fairly low, as you can only pay £2,880 each tax year into the account. Your child will get a 20% automatic boost from the government, and account charges are low at just 0.45% for funds and shares.
Active Savings Account
There are several options, depending on how long you can lock this money away. As of January 2024, interest rates are as follows:
Hargreaves Lansdown partners with multiple banks in order to provide their users with these rates. However, at the time of writing this review, they still aren't the best rates out there. Plum and Moneybox are usually competing for the best rates so be sure to check my reviews of those platforms.
Cash ISA
A partnership with Coventry Building Society allows users to spread their ISA allowance across different products, including limited access and fixed terms.
As of January 2024, interest rates are as follows:
I can’t recommend this product as these are fairly low rates. As an example, at the time of writing this review, I was able to locate an easy-access ISA with a rate of 5.16% at Moneybox.
Markets
As mentioned, you will struggle to find a more comprehensive selection of investment options on any other platform. There really is something for everyone here, regardless of their experience or knowledge of investing. One of the only things you won't be able to access here are cryptocurrencies.
Some of the options available include:
- More than 7,500 shares from North America and Europe
- More than 3,900 funds
- More than 1,400 ETFs
- More than 400 investment trusts
- Gilts and bonds
- IPOs and new issues
For investors who find all this overwhelming, help is at hand with the following:
Ready-made investments
For those without the expertise or time to manage their own investments, HL provides a range of ready-made funds that are chosen and managed by in-house experts. All you do is pick the fund and then leave the professionals to manage the rest.
It's important to stipulate that these investments have been put together for people who can leave their money in the market for a minimum of five years. If you think you're going to need your money before the five years are up, then you may be better off with a high-interest savings account.
Funds are separated between 4 funds for growth and 1 for income, and can then be matched to your appetite for risk.
There is a decent amount of information available on each fund, including a fact sheet that details the objectives, historical performance, and assets held within the fund.
Ready-made investments performance
As you can see, there is a lot of historical data missing due to the longevity of the portfolios. The only one we can accurately measure in terms of how it has performed across the past 5 years is the Cautious Managed Portfolio. 12.3% is actually a decent return, beating the industry average for ready-made portfolios of 9.9%.
The Wealth Shortlist
As I mentioned, the range of assets at HL is considered extensive. This could feel overwhelming for many investors. However, HL has addressed this issue by providing the wealth shortlist, which is essentially a whittled-down group of funds that have been specially selected by the in-house analysts. If a fund fails to perform, it is removed from this list, and I have seen this happen. In January 2024, the abrdn Asia-Pacific Equity Fund was removed from the Wealth Shortlist for failing to outperform the regional benchmark.
A range of sectors and risk levels are represented in this list and the analysts take into consideration the managers behind the fund, the performance of the fund, processes for buying and selling assets within the fund, and the approach to environmental, social, and governance (ESG) factors.
Ready-made pension plan
Anyone opening an HL SIPP can access the ready-made pension plan, which has been designed by experts to grow your money when you're younger, gradually moving to a low-risk investment as you approach retirement. It's an easy solution, and you can choose to invest as much of your pension as you like into this ready-made option.
There is a fee of 0.30% on top of the 0.45% that you pay for your SIPP account.
All that's left is to see how the pension has performed across the past few years. It isn't good news for Hargreaves Lansdown. In fact, with the total cost coming to 0.75% of your pension pot, alongside poor historical performance, this could be the last place I would choose to keep my retirement savings.
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