Hargreaves Lansdown has reduced its fees for the first time in a decade, in a move which is claims will see half of its clients pay less.
It is to reduce its platform fee from 0.45% to 0.35%, cut its share trading fee to £6.95 per trade (from £11.95) and introduce a small fund dealing fee of £1.95 per trade.
Clients who invest monthly via direct debit or elect for dividend reinvestment will continue to trade for free.
Its ‘Ready Made’ pension plans will also see the account charge applied to the holding falling to 0.15% from 0.45% (the fund charge remains at 0.30%).
The new feeds will come into force from 1 March.
Holly Mackay, founder of research firm Boring Money, said she expects the fee reductions from Hargreaves Lansdown to lead to platform providers to review their own fees.
She said: “After 10 years of holding out – Hargreaves Lansdown has announced a fee reduction from 1 March which will send all its competitors into a frenzy of comparison and introspection.”
Ms Mackay said that the changes to its pension charges in particular are likely to make Hargreaves Lansdown more competitive with other SIPP providers.
She said: “With a total cost of 0.45% (platform fees of 0.15% and investment solution fees of 0.30%) it feels to me as though this is taking the fight to arch platform rival AJ Bell and arch one-stop-shop rival Vanguard.”
Hargreaves Lansdown said the introduction of the fund dealing fee results from a ‘significant change in client behaviour’ over the past decade, with more people trading in funds than before.
Hargreaves Lansdown admitted that some customers will pay more under the fee changes. It noted that 6% of clients will see an increase of over £5 per month from March.
Richard Flint, interim CEO at Hargreaves Lansdown, said that the fee changes have been made to make sure it remains competitive.
He said: “At Hargreaves Lansdown, we believe that price is an important part of value alongside the trust our clients place in us, the breadth and quality of our investment options, and the support we provide in every single interaction.”