Hargreaves Lansdown Regulatory News (HL.)

HL response to the Platform Paper FCA PS 13/1

Ian Gorham, Chief Executive, Hargreaves Lansdown said:

"The FCA have today published their long awaited Platform Policy Paper (PS 13/1) containing the final rules that will apply to platforms and other nominee services with effect from 6 April 2014.

We are pleased to have confirmation of these rules, bringing the clarity we have awaited for some time. At first sight the rules, implementation timescales and "sunset clause" are broadly as expected. We have planned for all of these.

The majority of work required to comply is already either in progress or complete so we expect to be ready in good time. We remain confident in our ability to provide clients with compelling services and competitive pricing in future. 

As we have said for some time, we expect to offer all Hargreaves Lansdown clients the ability to buy commission-free units in due course. The new rules allow us to finalise our plans for this. As we have done successfully for many years, we will continue to seek to use our negotiating power to reduce the cost of investing for our clients. 

We remain fully confident in our business model and our ability to continue to provide an outstanding service to our clients. We will now work through the detail in the final rules and execute our plans with enthusiasm."

MORE DETAILED POINTS FOR FINANCE EDITORS ON SPECIFIC QUERIES:

Legacy "sunset clause" of two years

We were aware this was being considered. Hargreaves Lansdown has always said it would treat both existing and new clients the same, so this doesn't have an effect on us. We have planned for this.

Implementation date

Easily achievable and much of the work already complete. Hargreaves Lansdown already charges fees for many investments and therefore our systems can already cope.

Ability to charge fund groups for certain activities

We will assess the details of the FCA proposals and consider what is reasonable. Our plans are based around clear platform charges to clients and we see no reason to deviate from that plan. We may seek to reclaim costs of certain items such as pricing errors from fund groups on an ad-hoc basis. Where one-off fund company actions generate cost it is fair those costs are met by fund companies, not platforms or their clients. We have no current plans for carrying paid advertising.

£1 cash rebate allowed

This is useful and welcome as it helps avoid costly micro-transactions, albeit it is not particularly material to our plans.

FCA to look at applying rules to "adjacent markets"

We support this approach. There must be a level playing field and extending rules to Life Insurance companies and other markets is a necessary next step. 

Although SIPP operators are technically excluded, it is our current intention to apply our new plans to include our SIPP business. This will be cleaner, future proof and in the spirit of what the FCA is seeking to achieve. As we are confident in our plans there is no reason not to apply them across our business.

Hargreaves Lansdown remains committed to offering retail investors the best prices, best service and best information. 

 For further information please contact:

Hargreaves Lansdown +44 (0)117 3171638

Ian Gorham, Chief Executive

Danny Cox, Media Relations