In a nutshell
A great traditional broker with a solid history. However, times are changing, and they’re getting stuck in the past with expensive fees. There’s better investment options out there for much lower cost. That’s why we’re giving it 2 stars.
cracked open 🥥
Hargreaves Lansdown is one of the biggest names in investing in the UK, with over 1.6 million customers and managing over £120bn in investments for customers.
It’s been around for a very long time, with a solid reputation and history. But does that mean it’s the best place to invest in modern times, and the best place for you? Let’s find out.
Back in the day, when private investing was mostly limited to rich people who used a broker (a middleman who buys and sells investments for you), paying fees for every transaction, plus on-going account management fees were the norm.
However, it’s a new age, and these high fees charged by Hargreaves Lansdown should be a thing of the past. Unfortunately they’re not.
On a positive note, it has an absolutely huge range of investment options – they’ve had years and years to build up and get access to almost every investment possible!
Also, they pride themselves on great customer service. It’s pretty great, and there are people you can chat to on the phone (which you don’t often get with modern investment apps).
Is Hargreaves Lansdown good for beginners?
It is good for beginners, but with some caveats!
There’s a decent amount of resources to help you learn about investing, including videos and guides, which are all on the Hargreaves Lansdown website¹.
And the range of account options is great, you’ve got a Lifetime ISA, where you get a 25% bonus from the government for saving for your first home and a Stocks & Shares ISA for saving tax-free. Both of which are great for beginners.
Plus, there’s expert managed investment options where they’ll simply manage your investments for you (called your portfolio). You don’t have to do much after you get started. Just add money, sit back, relax and watch your money grow.
However, having them manage your portfolio is expensive, the performance (growth of your money) is not great, and you’ll need at least £1,000 to get started. There’s cheaper and better performing investment providers out there. Moneyfarm is our top choice for beginners and Nutmeg is a close second. Check out our Moneyfarm review to learn more.
How Hargreaves Lansdown works
Hargreaves Lansdown is essentially just a broker, so someone who buys and sells investments for you. So, all you do is create an account, and buy and sell investments! As simple as that.
Investing and savings options
Typical investment accounts
- Share dealing account: a general investment account where you can buy and sell investments, but you’ll have to pay Capital Gains Tax on anything you make over your profit allowance of £12,300 per year.
- Stocks & Shares ISA: invest up to £20,000 per year (your ISA allowance), and everything you make is completely tax-free, forever!
- Stocks & Shares Lifetime ISA: invest up to £4,000 per year and get a 25% bonus from the government on what you put in. However, it must be used for buying your first home or later life (over 60).
- Junior ISA: invest up to £9,000 for your kids' future. All held in their name, which they can access at 18.
- Pension (SIPP): manage your pension investments yourself and claim tax-relief of up to 45%. (If you’re looking to open a pension managed for you, check out PensionBee, it’s far cheaper and great investment performance.)
- Cash ISA: you can also just save cash, tax-free. Currently the interest rate is 0.50% (very low!).
Active savings account
If you just want to save cash rather than invest your money. Hargreaves Lansdown has quite a clever account for you.
Instead of having to go out and find the best deal, and continually switch to better deals when higher interest rates come out. Hargreaves Lansdown will do it all for you, without having to apply or do any paperwork. Pretty cool!
The only downside is the savings rates are at an all time low. The best rate you’ll find is around 2%. Compared to investing, where you can expect around 8% return per year on average.
CFDs & spread betting
For more advanced investors you can trade CFDs, which means ‘Contract For Difference’ – rather than buying actual stocks and shares, you can enter into an agreement with a broker about the price of the asset instead, and the direction the price is going to go. Which means you can trade the price of something going up, but also the price of something going down.
When you decide to sell, you’ll settle the contract, and pocket the difference between the price of the asset when you ‘opened’ the trade, and the price of the asset when you ‘closed’ the trade.
This service is actually provided by IG, a popular trading platform, rather than Hargreaves Lansdown itself. If you’re looking for a trading platform instead of investing, check out our eToro review, it’s hugely popular for trading CFDs.
You can also ‘spread bet’, which is similar, except you’re placing a bet on the price of an asset in the future, rather than entering into an agreement to settle the difference of the price in the future, like CFDs.
There’s no cryptocurrency trading with Hargreaves Lansdown, well they are very traditional after all. If you’re looking for crypto trading, check out our best crypto exchanges (UK).
How much is Hargreaves Lansdown?
As we’ve mentioned. It’s pretty expensive.
There’s no initial charges, so it’s free to open an account and to hold cash in your account. But once you start investing, you’ll be charged high fees.
To have investments within your account, you’ll pay 0.45% of your money invested, per year as an account fee, but it varies slightly depending on if you’re buying investments not listed on an exchange, such as more traditional investment funds, and investments bought on an exchange, such as shares and exchange-traded funds (ETFs).
Traditional fund costs
If you have your money invested within funds, which are groups of investments, put together by a fund manager, and could consist of shares, bonds (company loans) and property, you’ll pay:
These are just fees for your Hargreaves Lansdown account. You’ll also be paying a fee for the fund that you’re investing in too, which is taken from your money invested within the fund automatically, you often won’t notice.
These are a bit lower, and you could expect to pay around 0.20% on average, but can be much higher. It depends on which fund you are investing in. These are called fund fees.
There’s also what's called a spread fee, which is essentially a hidden fee on any investment, which is the difference between the price you pay for an investment, and the price you could then sell it for. And this is around 0.07% for funds.
You’ll pay the fund fee and spread fee on any investment you make, wherever you buy them.
Stocks & shares costs
If you buy individual shares, or investments that trade on an exchange, such as exchange-traded funds (ETFs), you’ll be paying a flat fee of 0.45% as an account fee, which is capped at £45 per year.
You’ll also have to pay dealing fees however, which are fees to buy and sell investments. And they are exceptionally expensive. These are:
These are the highest fees you’ll likely find with any broker. A lot of modern brokers, such as Freetrade, have no dealing fees at all, and even have no account fees.
And if you just want to buy ETFs, check out InvestEngine, who have literally no fees at all, except from the ETF fee itself and spread fees. There’s a huge range of ETFs available as well.
Phone trading fees: if you want to buy your investments over the phone, you’ll be charged 1% of the trade value, but there’s a minimum charge of £20, and the most you’ll be charged is £50.
Regular investment fees: If you want to invest regularly (which you should!), for some investments you’ll be charged £1.50 per each investment. Which is a massive 6% if you invested the minimum of £25 per month.
Stamp duty: if you buy UK stocks, such as those listed on the London Stock Exchange, you’ll be charged 0.50% on every purchase. Everyone pays this, but some brokers such as eToro (UK), pay this for you out of their own pocket. Hargreaves Lansdown doesn't however.
The customer support is very traditional, which is great for most, but if you’re young(ish), you might get a bit annoyed, as there’s no online live-chat!
Your options are a phone call, which is always good to have, or send an email (and wait a while to get a response).
The phone lines are 8-5pm, and Saturday morning, 9:30am-12:30pm.
Is Hargreaves Lansdown safe?
Yep! Completely safe.
Hargreaves Lansdown is regulated by the Financial Conduct Authority (FCA), which means they’re trusted and have been approved to look after your money.
Your money is protected by the Financial Services Compensation Scheme (FCSC), which means you’ll get back up to £85,000 should anything happen to Hargreaves Lansdown itself, such as going out of business.
And there’s even more protection, your money is actually held in a separate trust account, which Hargreaves Lansdown cannot access, and the money can only be returned to you.
What do the people say about it?
For a traditional company in finance, it has a great score of 4.2 of out 5 on Trustpilot, the popular reviews website. And from over 5,000 reviews. More traditional companies in finance tend to get bad scores as their customer service is normally awful.
Most reviews are about the great customer service and how good the platform is to use, but losing stars because of the expensive fees.
We’re here to help you better manage your money and grow your money! We’re also here to help educate the UK understand money better in general.
And here’s where we can help you. Hargreaves Lansdown is very expensive! It’s a great broker overall, and has a great history, and that’s why they’re able to charge a premium. Well, that alongside customers not realising just how expensive they are, and not aware of other options to invest their money.
Investing is all about growing your money, and fees can take a huge chunk of your money without you even realising. There’s a reason all these bankers are insanely rich.
You can find much, much cheaper investment platforms out there. It simply depends on what your investing goals are; if you want it all managed for you, or if you want to manage it yourself. Check out our best investment apps and best trading platforms for the cheapest, and best overall.
However, if you do like the comfort of a traditional broker to manage your money, that’s fine! Hargreaves Lansdown could be for you. Visit Hargreaves Lansdown's website¹ to learn more and open your account.
And because of the fees, we’re giving it 2 stars. A great all-round broker, but too expensive.