Hargreaves Lansdown’s Corporate Vantage platform is challenging established group players with high member engagement rates
At close to £60bn of AUA, Hargreaves Lansdown is a very large platform. With a 36 per cent market share it is by far the biggest player in D2C but what may be less apparent is the extent to which it has targeted the pension and retirement marketplace.
As far back as 1999 the company had decided that pensions for private investors had become “expensive, confusing and lacking in transparency”. It started offering third-party stakeholder pensions and launched a corporate solutions division to provide independent advice to firms on DC schemes. An annuity supermarket was launched in 2000 and Sipp was available on platform from 2003 – long before most rivals. The group Sipp followed in 2006.
Corporate Vantage was launched to take advantage of AE and, over the past three years, it has doubled scheme numbers and trebled total employees and assets (taking account of legacy GSipp business). Assets have grown from £800m to £1.5bn and, while this is a fraction of the £59bn total AUA, it is an increasingly important part of the business.
For employees with the potential to become active investors, the service is best-in-class – HL won the Platforum Best Direct Platform 2015 award. This includes offering a wide selection of ‘investment solutions’ to people less inclined to become their own investment manager. As a result, engagement levels are significantly higher than those found in the traditional life and pensions sector.
A one-stop shop for pensions, savings and investments based on Vantage, the platform is used by well over 700,000 retail clients. GSipp pension sits next to Isa and GIA wrappers with access to all the investment instruments available on the platform, which include funds, shares, investment trusts, ETFs, bonds and many esoteric options. The platform can be customised with employers’ logos.
HL has a renowned investment research team providing select lists (Wealth 150 and Wealth 150+), model portfolios and multi-manager funds. This enables it to present a number of fund options to employees. A range of default funds is offered, ratified by the corporate adviser/EBC or the employer. HL does not promote its own funds as default options.
Integration with the full flexible benefits proposition includes total reward statement, online childcare vouchers and holiday and absence tracking.
The upcoming tapering of annual allowance is an important shift requiring high-income employees potentially to look for other savings methods once they have exhausted their annual allowance. The availability of Isa and GIA on the same platform could be effective in light of this change. The company is currently considering whether to offer the Lifetime Isa.
Distribution has typically been directly to employers although HL has started to engage with EBCs and corporate advisers in the past year to build scale. Brand strength is a challenge in the corporate space against more established competitors like Standard Life, Fidelity and Aegon.
Employees have access to the same Vantage service as retail clients. It is notable for its information and investment research material as well as highly rated helplines. HL claims to have substantially higher engagement levels from employees – 30 per cent of members hold investments outside the default fund and 60 per cent are registered for online access.
Pricing to employer depends on specification of launch, bespoking and financial education. Employee pricing is the same as the retail proposition, based on a platform fee that tapers from 0.45 per cent.
Jeremy Fawcett, Head of Direct, Platforum
|Key data as at 30th June 2015|
|Date of platform launch – 2012|
|Platform proposition||Corporate Vantage|
* Includes legacy GSIPP
|GSIPP||yes||Target date funds||yes|
|Tools and engagement|
Pension calculators are the most popular online tools.
Varying levels of financial education and on-site communications are available depending on scheme size. Some are provided on a fee basis. Introducing new members to the scheme through presentations and one-to-one meetings agreed with employers on an individual basis.
HL Live Smartphone/Tablet app (iOS & Android) with trading capability. Investment Times tablet app.