Hargreaves Lansdown is the biggest investing platform in UK, managing 86 billions for more than 1 million customers.
It has received many awards, both national and international, for being the biggest fund supermarket in the UK.
Today I am going to tell you everything about Hargreaves Lansdown: should you invest in its mutual funds? Is Hargreaves Lansdown SIPP the best in the market? Would I recommend you to invest in its Stocks and Shares ISA?
Below you can jump to the section that interests you the most, but I recommend you to read it through so you can get the full idea.
What is Hargreaves Lansdown?
Hargreaves Lansdown is the biggest investing platform in United Kingdom. It is the one that manages more assets (86 billions), more customers (more than 1 million) and offers more financial products.
It was founded in 1981 by Peter Hargreaves and Stephen Lansdown, and look how far it has come. Now it is a publicly traded company in the London stock exchange, and it belongs to the FTSE 100.
While its fees are not the cheapest, they have built a reputation for providing world-class customer service, wide range of financial products and financial advice.
What services and accounts are offered by Hargreaves Lansdown?
Let me show you the list of products you can get on Hargreaves Lansdown website.
ISAs and investment products
Hargreaves Lansdown Stocks and Shares ISA
This is one of the most useful accounts they offer. With the Hargreaves Lansdown Stocks and Shares ISA you can get access to a wide range of invesment products (mutual funds, ETFs, shares, bonds), while sheltering your investments from taxes.
By investing with an stocks and shares isa account you won’t have to pay UK income tax or capital gains tax. You can contribute up to 20,000 £s per year.
You can either pick the investments yourself or choose a ready-made portfolio recommended by HL.
If you want to pick the investments by yourself but you are not sure how to start, you can use the Master Portfolios. These are 5 portfolios selected by HL investment team, designed to help you get started with investing.
Another great advantage is you can transfer your ISA to Hargreaves Lansdown using its online tool. Its quick and easy, it just takes 5 minutes to complete the process!
Hargreaves Lansdown Lifetime ISA
HL lifetime ISA account offers you the possibility to save and invest for your first home or later life. You can only open one if you are between 18 and 39 years old.
The big benefit of the Hargreaves Lansdown Lifetime ISA is that the government will top up your account with 25% of your total contributions. The maximum you can contribute is 4000£ per tax year, so the government can give you up to 1000£s.
It’s an excellent way to invest your hard-earned money and get a 25% bonus on top of that.
Hargreaves Lansdown Junior ISA
Another great way to invest your money is with the Hargreaves Lansdown Junior ISA. It allows you to start saving and investing under your kids name (if they are under 18).
The kids will get access to the money when they turn 18. As with previous ISAs accounts, these investments are sheltered from income tax and capital gains tax.
The maximum allowance for Hargreaves Lansdown Junior ISA this tax year is £4,368.
Hargreaves Lansdown Fund and Share account
Once you have used all your ISA allowance, it’s time for you to open a Fund and Share account. You can invest in all the financial products offered by Hargreaves Lansdown.
This is a general investment account and it provides a low-cost flexible investment account. The only disadvantage is that you will have to pay taxes on the gains that you obtain.
Hargreaves Lansdown Pension Accounts
Hargreaves Lansdown pensions service is without a doubt one of the best in the market. Let me explain you why.
Hargreaves Lansdown SIPP
Hargreaves Lansdown SIPP is one of the strengths of this investment platform. HL self invested personal pension (SIPP) allows you to invest in a wide range of products (mutual funds, etfs, worldwide stocks, etc).
SIPPs accounts have the huge advantage of giving you up to 45% tax relief. This means that for every 1000 £s invested in SIPP accounts, you can get up to 45% topped by the government. Isn’t it wonderful?
The total amount of tax relief will depend on your tax rate. If your salary is 40,000 £s, you are on the basic rate. Since you pay 20% of income tax on the basic rate, the government will top up your contribution with 20%.
If your salary is above 50,000£s, you are on the higher rate. That means that the you are paying 40% of income tax, and consequently your pension contribution will be topped up by 40%.
SIPPs are a wonderful investment product, since it allows you to get tax relief and it boosts your investments, taking advantage of the compound interest.
If you have a pension with another provider, HL makes it very easy to transfer it. You just need to use Hargreaves Lansdown online tool to start the process. I did it and after a couple of weeks the money was sitting on my SIPP 🙂
HL also gives you guidance on how to drawdown your pension. They have a complete guide with articles and videos where you will be able to choose the most suitable option for you.
Using Hargreaves Lansdown pension calculator, you can input your financial data and it will give you a view of your future pension income.
Hargreaves Lansdown Junior SIPPs
HL also offers you a Junior SIPP account, where you can start investing for your child’s future. Like it happened in the previous accounts, you can access the same investment assets as in any other HL investment account.
The advantages are that you can invest up to 3,600 £s per child per tax year and get a 20% tax relief paid by the tax man. Another incentive to start saving and investing!
An annuity is one way to guarantee a secure income from your pension. You exchange all or part of your pension pot for a guaranteed income for life.
HL is one of the few investing platforms that allows you to compare the annuities across the market. This way you can select the provider that will offer you the conditions that suits you then most.
Active Savings account
Hargreaves Lansdown offers an active savings account, where you can pick and mix savings products from a range of UK banks and building societies through one simple online account.
You can currently get rates up to 1.55% AER/gross, which is not bad if you want to start building your cash pot.
What financial products are offered by Hargreaves Lansdown?
This is one of the strongest points of HL, since you can choose from a wide range of financial assets. Let me guide you through them:
- Mutual funds: more than 3,000 funds from all around the world
- Index funds: invest in worldwide index like S&P500 & FTSE 100
- Stocks: with its share dealing service you can pick companies from any country
- ETFs: access to sectors and markets all around the world
- Investment trusts: choose from more than 300 investment trusts and Real Estate investment trusts
- Bonds: invest in thousands of corporate bonds, UK government bonds and gilts
Also, HL offers you ready-made investment portfolios with their service “Portfolio +”. Hargreaves Lansdown has 6 ready-made portfolios with a broad mix of assets across a range of countries and regions, in order to reduce the risk by diversifying.
Its incredibly user-friendly platform allows you to search for any mutual fund you are interested. They also provide you the most popular funds among the private investors, so you can know what people is buying lately.
Wealth 50 mutual funds
Due to the huge amount of funds offered by Hargreaves Lansdown, they have created a list of their favourite funds. Hargreaves Lansdown Wealth 50 contains the 50 mutual funds that HL recommends you to invest in.
They select funds with a fantastic track record, a robust process and a distinguish career. Hargreaves Lansdown aims to pick the mutual funds that have the most potential in each sector.
They previously had the Wealth 150 list, but they decided to reduce it to 50 high quality investments funds. One of the reasons was the Woodford fund scandal, whose fund manager Neil Woodford stopped allowing withdrawals. This damaged a bit Hargreaves Lansdown reputation, since they had recommended Woodford fund in the Wealth 150 list.
What are the charges in Hargreaves Lansdown?
For mutual funds Hargreaves Lansdown applies the same charges to all the accounts they offer. It doesn´t matter if you have a SIPP account, Stocks and Shares ISA or Fund and Share account, you will pay the same.
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For the shares, the fees vary depending on the type of account you have
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You also need to take into account the charges you pay for buying and selling stocks, which are the same for all the Hargreaves Lansdown accounts
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In my opinion Hargreaves Lansdown fees are not the cheapest ones, it will depend on your circumstances. It depends on the amount of money that you invest and how often you want to invest.
Some platforms charge you a fee for buying and selling funds, others for making deposits or withdrawing funds. If you are going to invest periodically in mutual funds, HL is one of the cheapest platforms you will find.
For example, if your portfolio is £20,000 and you invest once a month, even if you selected the cheapest fund you would only save £40 per year. This is a 0.2% of your portfolio value.
Hargreaves Lansdown offers you many services and products that, in my opinion, compensate that difference. For example, one of my favourite mutual funds is Lindsell Train Global Equity Class D.
I have not found this fund in any other investment platform. In the past 5 years, this fund has outperform the market for more than 5% per year, so I am happy to pay the 0.2% difference and get an extra 4.8% 🙂
How is Hargreaves Lansdown platform?
It is very easy to set up an account in HL (Stocks and Shares ISA, SIPP or trading account) and get instant access to thousands of financial assets. A beautiful world of mutual funds is waiting for you 🙂
HL platform is very intuitive and easy to use. Its design adapts well to both laptop and mobile phone, so you can browse through your investments on any device you like.
Hargreaves Lansdown platform becomes powerful when you have several accounts. You can see the status of all your accounts in just one glance.
If you are fairly new to the investment world, you can always follow HL advice and select investment funds from the Wealth 50 list.
When I joined in 2018, I checked the most popular funds in HL, and picked the ones that had achieved the best returns in the previous 5 years.
Hargreaves Lansdown tools allow you to easily search for the most popular funds. You can also create watchlists with your favourite funds, so you can check their performance and decide when to invest in them.
The platform is user friendly, you can easily track your portfolio returns
HL platform offers you lots of information on all the mutual funds so you can do a deep research.
Another useful tool is the regular savings feature, where you can set up a periodic investment
What do customer say about Hargreaves Lansdown?
The following are customer reviews taken from several independent websites:
- “I have always found Hargreaves Lansdown fair and honest. Overall I feel comfortable with the service provided and the performance of my investments”
- “Services offered by HL are excellent. Staff seem quite knowledgeable and you can get to speak to someone by phone very easily”
- “Hargreaves Lansdown is like a breath of fresh air compared with other platforms I have used for the last twenty years
- “I find Hargreaves Lansdown easy to invest in and very reassuring if a matter needs clarification. I would strongly recommend doing business with this company”
- “A great company, very reliable, efficient and professional”
I believe above reviews speak for themselves. The clients are very happy with Hargreaves Lansdown services, easy-to-use platform and accessible customer service.
You can contact Hargreaves Lansdown customer service and they will always help you with your enquiry. I called them several times and the service they gave me was excellent.
I have been using them for 2 years and I couldn’t recommend them enough 🙂
Is Hargreaves Lansdown expensive for you?
If you want to invest in mutual funds, it’s down to your specific circumstances. If you have a large portfolio, don’t want to trade often, and don’t need the specific mutual funds that are only available in HL platform, then you might be able to find a cheaper provider that will suit you better.
Since Hargreaves Lansdown charges you a % of your portfolio, if you have a large portfolio and don’t want to trade periodically, HL can be expensive for you.
Brokers like IWeb, where you only pay 5£ per transaction, can suit you better if you just want to invest a lump sum and let it grow for years.
If you want to invest in individual stocks, I recommend you to use the broker DEGIRO, which has the lowest fees of the market.
Investing in companies like Royal Dutch Shell or Lloyds Banking Group is cheaper if you use DEGIRO than if you use Hargreaves Lansdown.
If you want to invest in stocks paying very low fees, sign up on DEGIRO here.
Is Hargreaves Lansdown Safe?
Hargreaves Lansdown is a huge UK company that manages 86 billions of assets for more than 1 million of customers. It is a publicly traded company, so its financial reports are independently audited every year. This adds extra security and robustness to the company.
Furthermore, the company is supervised by the UK Financial Conduct Authority (FCA), and the financial assets are covered by the Financial Compensation Scheme (FSCS) against any fraudulent use. (up to 85,000 £s).
This implies that Hargreaves Lansdown is as safest as it could be. This doesn’t mean that your investments cannot go down, of course they can. But it does mean that the investor is protected against any (unlikely) fraud that could happen.
Final Review 2020 – Should you use Hargreaves Lansdown?
In my opinion Hargreaves Lansdown offers a premium service at a fair price. If you want to invest periodically in mutual/index funds, and get advantage of the tax benefits of Stocks and Shares ISAs and SIPPs, HL is for you.
I have been using them for over two years and I couldn’t be happier. Their customer service is very efficient and has always resolved all my queries very quickly.
They give you access to the best performing mutual funds of the market, with a user-friendly platform. If you want to improve your personal finances, this is your investment platform.
Hargreaves Lansdown founders and management team have done an excellent work, turning HL into one of the best investment platforms in the world.
In 2019 my Hargreaves Lansdown portfolio had an average annual growth of 25%. I also transferred my SIPP to them, so I could invest it in the mutual funds that I wanted. I am hoping 2020 will be an even better year!
More articles related to the stock market
If you want to carry on learning about stocks, I recommend you to read the following posts:
- DEGIRO review, how to invest with this broker
- Initial guide to start investing in stocks
- April 2020 portfolio analysis
Please do not hesitate to ask me any question on the comment section, I will be more than happy to reply them 🙂