Letter from the Editor: The price war is ON
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So, the price war is officially on…
This week saw Hargreaves Lansdown join the party, with the announcement that they’re cutting their headline charge from 0.45% per annum to 0.35%.
That means we’ve had Vanguard, interactive investor and Hargreaves Lansdown – three of the UK’s largest investment platforms collectively managing around 60.5% of the UK DIY retail platform market’s assets – all announcing fee changes in recent weeks.
On the surface, this all looks like great news — and for many investors, it is. But as ever, the devil is in the detail.
Headline fee cuts make for good press releases, but they rarely tell the full story. As we showed in our analysis of the Hargreaves winners and losers, some investors will pay less, while others will quietly pay more once new caps, dealing charges and account fees are factored in. The danger is in assuming your loyalty is being rewarded, when in reality the economics of your account may have shifted underneath you.
The good news? This is exactly the kind of market competition that ultimately leads to more money in your pocket as a consumer. But, those who gain the most are those who are prepared to switch if necessary. The second bit of good news is that switching is easier than ever.
The approach now is to treat your platform like any other financial product: review it, it, and make sure it still earns its keep. In a price war, the winners aren’t the loudest brands – they’re the investors who pay attention.
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