Hargreaves resists revealing fund commission

By Richard Dyson
Created: 05:38 EDT, 12 June 2011

Hargreaves Lansdown, the investment broker, has said that it will 'strongly resist' pressure to disclose the commission it receives from fund managers whose products it recommends and sells to private investors.

Resistance: Commissions paid by funds to Hargreaves are secret

Its stance sets the FTSE 100 company on a potential collision course with the Financial Services Authority, which is considering the degree of disclosure it will require under a regime effective from next year.

Hargreaves is the biggest seller of investment funds, administering £22bn on behalf of 350,000 savers. But the commissions paid by funds to Hargreaves are secret.

Ian Gorham, the chief executive brought in last year to replace co-founder Peter Hargreaves, vowed to 'oppose any move toward disclosure'.

He said consumers would not benefit from the information, and might suffer a reduction in fund choice.

But analysts believe that the firm's stance arises from a fear that disclosure would enable fund managers to haggle their commissions down, squeezing Hargreaves' margins.

›› Why Hagreaves Lansdown is wrong to keep its fund payments secret