Hargreaves Lansdown Gets Rid of Exit Fees Amid Woodford Fallout

(Bloomberg) --

Hargreaves Lansdown Plc has scrapped the fee it charged customers to leave the investment platform as it tries to rebuild investors’ trust after being caught up in the tumult surrounding Neil Woodford’s decision to freeze his flagship fund.

The U.K.’s biggest online investment platform nixed nine types of fees and will now charge clients a “platform service fee,” according to an emailed statement on Thursday. The canceled levies include those for transferring stocks and closing an account. The news was first reported by London’s Telegraph newspaper.

“We have removed exit fees and think everyone else in the industry should do the same,” Hargreaves Lansdown spokesman Danny Cox said by email. “We continue to support a ban on all exit fees, provided this is industry-wide and not just confined to platforms.”

The Bristol, England-based firm dropped its platform fees for Woodford’s flagship fund after he suspended redemptions amid heavy redemption requests. More than 133,000 Hargreaves Lansdown clients invested more than 1 billion pounds ($1.2 billion) in the now-frozen fund, and the platform came under intense scrutiny for its longstanding backing of Woodford.

Many of Hargreaves’s peers continue to charge retail clients for switching providers, including platform AJ Bell Plc and listed wealth manager St. James’s Place Plc, which charges a penalty for withdrawing cash early. The U.K.’s Financial Conduct Authority earlier this year proposed a ban on exit fees for switching providers.

To contact the reporter on this story: Lucca de Paoli in London at gdepaoli1@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry

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