Hargreaves ‘welcomes’ U.K. platform proposals
(Adds Hargreaves Lansdown share movement and response, and consultancy comment)
The U.K.’s largest online stockbroker Hargreaves Lansdown PLC (HL.LN) said it welcomes proposals to improve competition among investment platforms, after a regulatory report knocked its share price.
The U.K.’s Financial Conduct Authority said Monday that it is proposing actions to improve competition in the investment-platform market, including banning fees for transferring investments.
"We know that competition is working well for many but it is important that the problems we have identified are addressed so that consumers don’t lose out," said Christopher Woolard, executive director of strategy and competition at the FCA.
The regulator said it will consider whether switching costs can be reduced through banning exit fees, as part of a package of measures to improve competition.
The report led to Hargreaves Lansdown shares falling 4% by early Monday afternoon, making it one of the worst performers in the FTSE 100 index. Hargreaves Lansdown is the U.K.’s largest direct-to-consumer investment platform, with a 38% market share.
"Hargreaves Lansdown has been at the forefront of making transfers of investments and pensions between providers easier and quicker and as an example, we chair the industry’s working group on transfers mentioned in the FCA’s report," said Hargreaves Lansdown’s Chief Executive Chris Hill, in a statement.
"We welcome the FCA’s focus on switching between providers and hope this accelerates the adoption of technology across the industry enabling people to switch more easily," he said.
The FCA said the investment platform market in the U.K. has 500 billion pounds ($662.50 billion) of assets under management, and has almost doubled in size since 2013.
Michael Barrett, consulting director at platform-and-investment consultancy The Lang Cat, told Dow Jones Newswires that the FCA’s latest proposals were "a bit of a damp squib".
"If I was a platform provider I would be breathing a sigh of relief," said Mr. Barrett. He noted that the majority of the FCA proposals appear to be targeting consumer understanding rather than industry practices.
The FCA will seek feedback on its interim findings, before publishing its final conclusions on the investment platform market in early 2019.
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