While Hargreaves Lansdown dominates the DIY platform market by numbers of customers and assets under administration, Fidelity also has a long legacy in the investment world, also managing its own range of funds. Both firms offer lots of free guidance to help investors and have good customer service. They both offer trading accounts alongside tax-advantaged savings plans and charge fees for their services based on a percentage of the funds held on its platform. Your choice may come down to a pure cost comparison, but you might also be swayed by a few differences in the range of services.
Hargreaves Lansdown v Fidelity – overview
What is Hargreaves Lansdown?
Hargreaves Lansdown is based in Bristol and is a constituent of the FTSE 100 Index of the largest companies listed on the London Stock Exchange. Founded in 1981, it has over 1.7 million clients and £120 billion of assets under administration. Its platform offers investments and savings, individual savings accounts (ISAs), and self-invested personal pensions (Sipps). But the firm also offers a wider range of financial services, including an investment arm, which manages a range of in-house funds, financial advice for customers who don’t want to make their own decisions, and annuity and currency brokerage services.
What is Fidelity?
Fidelity International is a private employee-owned company that operates its UK investment management services from London and has helped clients to save for retirement and other long-term investing objectives for 50 years. Alongside a fund platform, it provides investment funds and pension management. It’s a big enterprise, with 1.5 million UK customers, and a total of over 2.87 million clients around the world, managing total money worth US$728.6 billion.
Hargreaves Lansdown v Fidelity – product on offer
Both platforms allow you to get started investing with as little as £25 a month. They are regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS).
They both offer self-invested personal pensions (Sipps), stocks and shares individual savings accounts (ISAs), Junior ISAs and trading accounts.
Hargreaves Lansdown offers a wider product range extending to Lifetime ISAs and Cash ISAs. The Bristol-based firm has also partnered with sixteen banks and building societies to create a standalone savings platform, called Active Savings. This allows you to hold your cash savings in one place and pick and mix between easy access and fixed rate bonds.
In terms of investments, both platforms offer a wide investment choice of funds, plus UK and overseas shares, corporate and government bonds, exchange-traded funds (ETFs) and investment trusts.
Hargreaves Lansdown offers 3,952 funds, 1,379 UK shares, 6,995 overseas shares, 1,514 ETFs and 401 investment trusts. Fidelity has a slightly less comprehensive offering of 3,066 funds, 2,490 shares, 417 ETFs and 185 investment trusts.
Both platforms charge a service fee, payable monthly, based on the total value of your investments, that reduces in bands as your investments grow above certain amounts.
Hargreaves Lansdown charges 0.45% on the first £250,000 invested in funds in its ISA and Sipp. The fee reduces to 0.25% for amounts invested between £250,000 and £1 million and to 0.10% for amounts between £1 million and £2 million, with no fee on amounts over £2 million.
Hargreaves Lansdown’s headline fee of 0.45% is high relative to other platforms that charge percentage fees, working out as £450 per year on £100,000, and has stayed the same for many years. But its charges for customers who only invest in shares are capped at £45 a year in the ISA and £200 a year in the Sipp.
Fidelity charges a lower service fee of 0.35% of your investments held on the platform, which works out as £350 per year on £100,000, with no additional charges for holding a Sipp. The service fee drops to 0.2% when your money grows to £250,000, with no charge on investments over £1 million, making the maximum fee £2,000.
If you have less than £25,000 in total there will be a flat fee of £90 (£7.50 a month) a year. For exchange-traded instruments (i.e. ETFs, investment trusts and stocks) held in the taxable option of Fidelity’s Investment Account, there is no service fee. There’s also no fee for investments held in a Junior ISA or Junior SIPP.
Both platforms don’t charge for buying and selling funds. But they have additional trading charges when you buy and sell shares, ETFs and investment trusts. Hargreaves Lansdown’s share trades are usually charged at £11.95, with reductions for more frequent traders, while Fidelity charges £7.50 per trade.
Hargreaves Lansdown v Fidelity – research, tools and features
Both platforms offer daily market insights and investment ideas and inspiration, written by their in-house experts, and offer guidance to help investors narrow down their investment choices. They produce video and podcast content and host live events.
Hargreaves Lansdown’s Wealth Shortlist is a selection of 74 funds that its analysts have identified as having the potential to outperform their peers over the long term. The Wealth Shortlist, includes active and passive funds, plus responsible investing options.
For those who don’t want to choose, monitor and manage their investments on a day-to-day basis, Hargreaves Lansdown offers a suite of four ready-made investments with different risk levels. These funds use a selection of different managers, chosen and managed inhouse by Hargreaves Lansdown. With ongoing charges of 0.88% to 0.99%, they are relatively expensive.
Fidelity’s recommended list is called the Select 50 and features active and passive funds, investment trusts and ETFs. Fidelity partners with Fundhouse, an independent fund research company, to add independence and enhance the selection process.
Fidelity also has a Navigator tool that assists you in making your own investment choice based on features that are important to you and your appetite for risk, presenting a Fidelity-branded and in-house managed multi-asset fund that correspond with your inputs.
Hargreaves Lansdown v Fidelity – user experience
Based on customer reviews on consumer website Trustpilot, the platforms are neck and neck in terms of customer service. Hargreaves Lansdown has a TrustScore from Trustpilot of 4.1 (based on 9,032 reviews) vs Fidelity also at 4.1 (based on 4,452 reviews). Both platforms ask their customers for reviews. Overall, businesses that regularly invite their customers to write reviews tend to have a higher TrustScore than businesses that don’t.
Hargreaves Lansdown’s app has a 4.7 rating on the app store (based on 52,600 ratings), while Fidelity’s app has a 4.5 rating on the app store (based on 16,200 ratings).
Hargreaves Lansdown v Fidelity – quickfire advantages & disadvantages
Hargreaves Lansdown advantages
- Offers Lifetime ISA and Cash ISA
- Standalone cash savings service
- Wider investment choice
- App score is higher
Hargreaves Lansdown disadvantages
- Higher platform fee
- Higher share dealing fees
Fidelity advantages
- Lower platform fee
- Lower share dealing fees
- Independent fund research partner
Fidelity disadvantages
- No Lifetime ISA or Cash ISA
- No cash savings service
- Smaller range of investments
Our conclusion
If you’re looking specifically for a Lifetime ISA, this would lead you to Hargreaves Lansdown. Meanwhile, Hargreaves’ other cash product features make it a convenient one-stop shop for people who want to save and invest their money. Hargreaves’s broader investment range might also sway sophisticated investors. In fact, investors who only want to hold shares in their ISA or Sipp account might find that Hargreaves is best value due to the fee cap applicable to shares-only investors in those accounts.
Otherwise, Fidelity’s lower platform service fee probably works out better value for investors. Your best option is to use Compare and Invest to find out what you’d potentially be charged for your type of investing style (products and tax-wrappers held, plus trading frequency). But don’t just focus on the amount saved over one year as the compounding of relatively small differences in fees and charges over several decades can amount to life-changing sums.
