Hargreaves Lansdown logo is seen on a smartphone in front of displayed stock graph in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration Signage is seen for the FCA (Financial Conduct Authority), the UK’s financial regulatory body, at their head offices in London, Britain March 10, 2022. REUTERS/Toby Melville/File Photo
Shares in Hargreaves Lansdown (HRGV.L) and AJ Bell (AJBA.L) were among Tuesday’s biggest losers on the London stock market after Britain’s market watchdog flagged concerns about the interest and fees charged by some investment platforms.
The Financial Conduct Authority (FCA) said it had written to 42 firms warning it could intervene to ensure fair value. The regulator said it had told the platforms, which it did not name, to cease this practice by Feb. 29.
The FCA said it had laid out concerns about the amount of interest investment platforms made on customers’ cash balances, which has risen with interest rates, and the practice of charging a fee for holding cash, known as “double dipping”.
Spokespeople for AJ Bell and Hargreaves Lansdown declined to comment.
Jefferies analysts said they expected possible negative impact on margins for Hargreaves Lansdown and AJ Bell.
“It is likely that revenue margins on cash balances held in some types of account on platforms such as HL and AJB will be reduced by the amount of the platform fee, while net interest income may fall as well,” they wrote in a note.
Hargreaves Lansdown fell as much as 9.8% in early trading and was last down 8.4%, while AJ Bell slid 10% to a session low before recovering slightly to trade 9% down.
Other shares in the sector were less impacted. St. James’s Place (SJP.L) was down 1.6%.
Additional reporting by Iain Withers in London; Editing by Amanda Cooper and Alexander Smith
