Hargreaves Lansdown Fees UK – Compare Commissions & Spreads

Hargreaves Lansdown sits at the forefront of the UK stock broker scene. The provider was launched way back in 1981, has over 1.3 million customers, and is now itself listed on the London Stock Exchange. By opening an account with this provider, you will have access to thousands of shares, ETFs, mutual funds, and more.

But, this does come at a cost.

In this Hargreaves Lansdown Fees Review, we cover each and every charge that you are likely to come across at the broker. Not only does this include share dealing fees, but charges surrounding funds, transactions, IPOs, and ISAs.

Hargreaves Lansdown Overview

Hargreaves Lansdown is an online stock broker that allows you to buy a full selection of financial assets from the comfort of your home. This includes a hugely comprehensive stocks and shares department that covers several markets. In the UK, for example, you will have access to shares listed on the London Stock Exchange. You can also buy shares listed on the AIM (Alternative Investment Market).

If you’re looking to expand your investment horizons, Hargreaves Lansdown also covers a number of international exchanges. In particular, this includes US stocks listed on the NYSE and NASDAQ. In addition to the stocks and shares, Hargreaves Lansdown also allows you to invest in funds. This covers mutual funds, index funds, and ETFs.  The broker is also one of the few UK platforms that allows you to buy bonds. Not only do this consist of corporate bonds, but government securities and PIBBs, too.

Hargreaves Lansdown is also a popular option if you want to invest in UK IPOs (Initial Public Offering). This is when companies hit the London Stock Exchange for the very first time. In terms of accounts, Hargreaves Lansdown offers a range of options. For example, you can place your investments into Stocks and Shares, Junior, or Lifetime ISA. The broker also offers support for pension plans via SIPPs and Annuities.

When it comes to regulation, Hargreaves Lansdown is authorized and regulated by the Financial Conduct Aurhotyt (FCA). The platform is also covered by the Financial Services Compensation Scheme (FSCS). As noted above, the broker’s parent company is listed on the London Stock Exchange. With a huge market capitalization of almost £7 billion, Hargreaves Lansdown is a constituent of the FTSE 100.

Hargreaves Lansdown Trading Fees

So now that you have a firm idea of what Hargreaves Lansdown offers, we now need to look at that all-important factor – fees. Due to the sheer size of the Hargreaves Lansdown platform, we have decided to break the broker’s fees down by the respective financial asset – starting with stocks and shares.

Hargreaves Lansdown Stocks and Shares Fees 

Most UK investors use Hargreaves Lansdown to buy shares. After all, it’s simply a case of opening an account, depositing some funds, and choosing the company that you wish to invest in.

However, as we are about to elaborate on, Hargreaves Lansdown is actually one of the most expensive UK stock brokers to buy shares from. In fact, if you’re only looking to invest a small amount from time to time, this broker is going to make the investment process super-unviable.

Here’s why:

As you can see from the above screenshot, buying shares at Hargreaves Lansdown will cost you a whopping £11.95. Now, to put this fee into perspective, let’s assume that you wanted to buy HSBC shares at the minimum investment amount of £100. In doing so, you would be paying an effective commission rate of 11.95%!

But wait – there’s more. When you get around to cashing your HSBC shares out, you would again need to pay a further £11.95. As a result – and irrespective of whether or not you make a profit, buying and selling shares at Hargreaves Lansdown will cost you a total of £23.90.

In other words, a minimum investment of £100 would require your share purchase to grow in value by at least 23.90% just to break even. Bearing in mind that the FTSE 100 is worth less than it was five years ago, attempting to make this much just to cover your commission fees is simply unrealistic.

In comparison, there are plenty of UK stock brokers that allow you to buy UK shares at a lower commission. For example, fellow old-school brokerage firm IG charges £8 per trade, while Barclays charges £6. However, both of the aforementioned platforms also charge quarterly fees if certain minimums aren’t met.

The good news is that the likes of FCA broker eToro allow you to buy shares in a 100% commission-free manner. As long as you meet a $50 minimum (about £40) you’re good to go. To illustrate just how much money this could save you, let’s run a quick comparison between Hargreaves Lansdown and eToro.

• In this example, we’ll say that you wish to buy £200 worth of Royal Mail shares
• By using Hargreaves Lansdown, the purchase will cost you £11.95
• In addition to this, you need to pay a stamp duty of 0.5% – which amounts to £1
• When you sell the shares a few years later, you again pay £11.95
• This means that in total – your £200 Royal Mail share investment cost you £24.90 at Hargreaves Lansdown

Now let’s repeat the above scenario but using eToro instead.

• You deposit £200 into eToro. As you need to pay a 0.5% FX fee, this amounts to a charge of £1
• You buy £200 worth of Royal Mail shares commission-free
• eToro waivers the 0.5% stamp duty fee
• You sell your Royal Mail shares commission-free

As per the above, buying £200 worth of Royal Mail shares at eToro cost you nothing in commission or fees. But, you did incur a 0.5% deposit fee of £1. As a result, your all-in fee at eToro was just £1, while at Hargreaves Lansdown this cost you £24.90. As such, by opting for eToro instead you saved yourself £23.90.

With that being said, we should make it clear that you do stand the chance of reducing your Hargreaves Lansdown fees if you trade regularly. So, by placing 10-19 deals (buying or selling shares is classed as a deal) in the previous calendar month, your £11.95 fee is reduced to £9.95. By placing at least 20 deals, this is reduced further to £5.95.

While at first glance this might seem reasonable, it really isn’t. For example, by placing 10 trades in the previous month you would have incurred £119.50 in Hargreaves Lansdown fees.

This is because you would have paid an initial price of £11.95 – 10 times. By making this comparison with eToro, the only fee that you would have paid is the 0.5% deposit charge. Other than that, you can place as many or as little deals as you like and still benefit from the commission-free and stamp duty-free offering.

Note: If you decide to buy shares at Hargreaves Lansdown via the telephone, you will pay an additional 1% on top of the fees discussed above. This is charged at a minimum of £20 and a maximum of £50.

Hargreaves Lansdown Fees on International Shares

If you’re planning to use Hargreaves Lansdown to buy foreign shares like Facebook, IBM, or Apple – you should know that the fees are even higher. This is because you will pay the same share dealing fees listed above – plus a foreign exchange charge.

• Anything invested up to the first £5,000 will attract an FX fee of 1%
• After that, investments between £5,000 and £10,000 stands at 0.75%
• You’ll pay 0.50% for investments of between £10k and £15k
• The lowest you can get the FX fee down to is 0.25% – which is for all foreign share purchases over £20,000

Taking the above into account, let’s look at a practical example of how much you will be charged to buy non-UK shares at Hargreaves Lansdown.

• Let’s suppose you decide to buy £500 worth of Disney shares
• You will pay a share dealing fee of £11.95
• You will pay an FX fee of 1% – which amounts to £5 (£500 x 1%)
• Assuming that you sell the shares when they are worth £750, you again pay an £11.95 share dealing fee
• Again, you will also pay a 1% FX fee – which amounts to £7.50 (£750 x 1%)

As per the above, you bought £500 worth of Disney shares and sold them when the stocks were worth £750. This left you with £250 in profit, less all-in fees for £36.40. As such, your net gains were £213.6.

Going back to our earlier comparison with eToro, the above process of buying Disney shares would cost you significantly less.

For example:

• At eToro you would pay 0.5% to deposit £500 – which is £2.50
• You would pay £0 in share dealing fees to buy non-UK stocks
• You would not be charged an additional FX fee
• You would pay £0 in share dealing fees to sell non-UK stocks

As you can see from the above, while you paid £36.40 in Hargreaves Lansdown fees to buy non-UK stocks, the process at eToro cost you just £2.50. This leaves you with an extra £33.90 in net gains!

Hargreaves Lansdown Bond Fees

If you’re looking to use Hargreaves Lansdown to buy bonds, the fee that you pay will depend on how the purchase is made. We say this, as the vast majority of bonds at Hargreaves Lansdown need to be bought over the phone. As we mentioned earlier, this carries a fee of 1%.

The minimum and maximum fees are £20 and £50, respectively. Once again, this is actually expensive. For example, if you were to invest just £500 into your chosen bond instrument, this carries an effective commission of 4% when you factor in the minimum telephone dealing fee of £200.

With that said, a small selection of bonds at Hargreaves Lansdown can be purchased online. If this is the case, then the fee mirrors that of the share dealing commissions listed above. To clarify that’s £11.95 per trade unless you made 10 or more deals in the prior month.

Hargreaves Lansdown ETF Fees

ETFs are great for diversification purposes as you will get to invest in hundreds of shares and/or bonds through a single trade. At Hargreaves Lansdown, you will have access to heaps of ETFs from well-known providers like iShares and Vanguard. In terms of fees, Hargreaves Lansdown charges the same £11.95 as per its stocks and shares department.

Once again, without intending to sound repetitive, this is expensive. For example, you can buy over 150+ ETFs at eToro without paying a single penny in commission.

Of course, it goes without saying that the number of ETFs available at Hargreaves Lansdown is much larger compared with eToro. But, the latter does offer some of the most traded ETFs in the space. As such, if the platform does list your chosen ETF, you will save yourself £11.95 on each purchase that you make.

Note: Hargreaves Lansdown also offers various investment trusts. The fees here mirror that of its ETFs and shares.

Hargreaves Lansdown Fund Fees

While shares, ETFs, investment trusts and bonds all attract the uniform flat commission of £11.95 per trade, funds at Hargreaves Lansdown are priced differently. This is because there is no dealing charge to buy or sell funds at the broker. There is, however, an annual fee that comes into play.

As you can see from the screenshot above, the specific fee will depend on how much you have invested at the platform. With that said, unless you are planning to invest more than £250,000 into funds, Hargreaves Lansdown fees amount to 0.45% per year. As such, if you were to invest £1,000, you would pay a fee of £4.50.

Hargreaves Lansdown ISA Fees

If you’re planning to open an ISA at Hargreaves Lansdown, additional fees will apply on the following financial assets:

• Shares
• Investment trusts
• Exchange-traded funds
• VCTs
• Gilts
• Bonds

On top of the standard dealing fee of £11.95, you will need to pay 0.45%. This is capped at £45 per year. Taking these additional fees into account, you might want to reconsider opening an ISA. This is because you can make up to £13,400 in the 2020/21 financial year without being liable for capital gains tax.

In addition to this, you can receive up to £2,000 in dividends without paying any tax. As such, were you to invest at eToro on a commission-free basis without opening an ISA, it would work out significantly cheaper for you – even without the tax benefits that an ISA offers.

The only exception to this rule is if you are looking to invest huge amounts that will result in annual gains of more than £13,400.

Hargreaves Lansdown Deposit & Withdrawal Fees

Although Hargreaves Lansdown is arguably one of the most expensive stock brokers in the UK, the good news is that the platform does not charge anything on deposits and withdrawals. Don’t forget though, there is a minimum deposit amount of £100 or £25 per month is signing up for a direct debit.

Hargreaves Lansdown Inactivity Fee

Much like in the deposit and withdrawal department, there are no Hargreaves Lansdown fees if your account is marked as dormant.

Hargreaves Lansdown Account Management Fee

Whether you or not you need to pay an account management fee at Hargreaves Lansdown will depend on several factors. For example – and as we covered earlier, ISAs at the platform are charged at 0.45% per year. If you decide to invest in a fund (non-ISA), you will also pay 0.45% per year.

On the other hand, if you simply buy stocks, bonds, and several other eligible assets – and you keep them in a standard dealing account, you won’t pay any annual fees.

Hargreaves Lansdown Fees vs Other Brokers

As we have discussed throughout this Hargreaves Lansdown fees review, the broker in question is largely expensive across the board. This means that by using an alternative stock broker to meet your share investment needs, you can reduce your commissions by some distance.

In order to highlight this, let’s take the likes of Barclays as a prime example. While at Hargreaves Lansdown you will pay £11.95 per deal, Barclays charges just £6. Straight away this saves you £5.95 on each investment that you make. With that said, there is a minimum annual fee of £48 per year at Barclays, which does not sound so attractive.

But, and as we have mentioned several times already, eToro is the best alternative that you have in the UK. This is because the FCA-regulated broker does not charge any share or ETF dealing fees. UK Stamp duty tax is also waived at the platform, meaning that you can save yourself a further 0,.5% when buying FTSE 100 shares. Best of all, there is no monthly or annual fee when investing at eToro.

We should also make reference to the surcharge that you will need to pay in order to buy international shares at Hargreaves Lansdown. If you are investing less than £5,000 – then this stands at a whopping 1% in addition to its standard £11.95 flat fee. Don’t forget, both of the aforementioned fees need to be paid when you buy shares and again when you sell them. At eToro, there is no surcharge for buying non-UK stocks meaning that you will still benefit from a commission-free purchase.

In addition to saving yourself a fortune in fees, eToro also stands out because of its copy trading feature. This allows you to buy and sell financial assets without needing to do any of the homework. This is because upon selecting an experienced investor, you can elect to copy their portfolio at the click of a button. Then, moving forward, any assets that the investor buys or sells will be reflected in your own portfolio. Nothing like this exists at Hargreaves, so you are effectively left to pick stocks on a DIY basis.

The Verdict

All in all, Hargreaves Lansdown is a great broker for several reasons. Whether it’s the sheer size of its asset library, strong regulatory standing, or top-rated research department – it’s clear to see why Hargreaves Lansdown has attracted over 1.3 million clients to its platform.

However, where the broker most certainly does not stand out is fee department. This is because the Hargreaves Lansdown fees schedule is one of the highest in the UK share dealing scene. At £11.95 per trade – plus a further 1% on non-UK shares, this is super expensive.

This is we think eToro – an FCA broker with over 13 million investor accounts, is by far the better option. Not only can you buy shares and ETFs listed in the UK commission-free, but this is also the case with the 16 international stock exchanges that it supports.

As such, you will save yourself a fortune in dealing fees by avoiding Hargreaves Lansdown and instead opting for eToro.

eToro – Cheapest Broker in the UK with 0% Commission

Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider.

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