Hargreaves Lansdown co-founder Peter Hargreaves has said his biggest fear is how customers will react to forthcoming changes to the platform's pricing model.
Speaking to IFAonline's sister title Investment Week after the group reported record profits for the year to 30 June, Hargreaves (pictured) said customers' reaction to the changes remains the great unknown for the business.
The platform is attempting to secure preferentially-priced clean share classes for the funds it recommends to clients, and said this morning it had achieved better-than-average deals for 68% of funds on its Wealth 150 list.
Hargreaves said customers' view of the new unbundled structure concerns him more than the potential for an industry price war.
"We do not fear competition or even a price war. What we fear is clients' reaction to seeing a transparent charge.
"We have done some market research, but the $64,000 question remains how customers will react to those charges."
The platform told analysts this morning that it would unveil the new pricing structure in late November or early December, but Hargreaves himself hinted the announcement may not arrive until the new year.
Hargreaves Lansdown has contacted some 222 fund groups over its ‘super clean' share price ambitions, andh 89% of those groups have responded.
"Some companies wanted to discuss [the plans] with other people in the industry first. Eventually we will have a discussion, at least with all the companies we want to talk to, though not all will acquiesce to our requirements," executive director Hargreaves acknowledged.
The co-founder said Hargreaves will get the best deals across the industry as a whole, but added he expects certain terms to be matched by competitors who can offer significant volumes and equivalent distribution powers for particular funds.
"The funds we choose will be the ones that have the best performance potential," he added. "Pricing will be secondary, but for marginal decisions, those with a high charging structure will not go on the list, while those with a low structure may do so."
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