The Bristol-based investment house has written to clients explaining its decision to back down over the proposed new charges, which led to a high volume of complaints.
In January, HL proposed that a 45 basis point charge would apply to shares held directly and also for those shares held in investment trusts, but it has now reversed this decision in response to client feedback.
Chief executive Ian Gorham said in a letter to investors: "It is clear this change has been disliked. We have always listened to clients and designed our service around what they want. I believe it is therefore the right thing to do to revert to a charging structure that clients are happy with."
Challenge of investment trusts
He said investment trusts were one of the "most challenging considerations" in establishing HL's post-RDR pricing regime, for their being traded on the stock market like shares but being treated by most clients like funds. He added that the revised structure would see most investors in investment trusts better off due to the reduced annual charge on ISA and SIPPs coming down from 0.5 per cent to 0.45 per cent, with caps.
"For the avoidance of doubt, this means that from 1 March 2014, as they do today, clients will pay no charge for holding any shares, investment trusts, bonds, VCTs, gilts or ETFs in the Vantage Fund & Share Account.
"In the Vantage ISA, there will be a single annual charge covering all these investments of 0.45 per cent capped at £45 per year. In the Vantage SIPP, there will be a single annual charge of 0.45 per cent capped at £200 per year," Gorham explained.
The 0.5 per cent annual loyalty bonus would still apply to investors in Fidelity China Special Situations from 1 March.
The business said it remained committed to improving its investment trust-related service proposition, promising better online factsheets, more data and research.
Thanks to Royal Mail
The announcement came alongside its six-month results, which reported a 43 per cent rise of assets under administration on the previous year, putting the group now at £43.4bn.
Revenue was up 13 per cent to £158.4m and pre-tax profits has risen 11 per cent to £104.1m.
The 15 per cent increase in the number of new investors – taking the "active investor" figure to 584,000 – was largely attributed to Royal Mail’s IPO.
Gorham said: "Of particular excitement is the ever increasing number of people who are finding Hargreaves Lansdown. As an example, around 118,000 people, approximately 18.5 per cent of the UK public who invested in Royal Mail shares, did so through Hargreaves Lansdown.
"This seismic effect on the UK investing environment confirms our position as the leading investment supermarket in the UK. We saw days when up to 60,000 people tried to call Hargreaves Lansdown, and during the two key weeks of the Royal Mail flotation our website received 3.5m hits. Visits to our website in the last 12 months stand at a remarkable 59m, up 73 per cent on the corresponding 12 months last year."
The group’s interim dividend grew 11 per cent to 7p per share, up from 6.3p per share for H1 2013.
