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Investment supermarket expands in ETF sector


Hargreaves Lansdown is one of the biggest investment supermarket firms in the UK. Founded in 1981 by Peter Hargreaves and Stephen Lansdown, the Bristol-based firm has always focused on the south west and is now one of the largest investment brokerages and platforms in the UK, offering retail investors access to a wide range of financial products, from funds to shares. 

Adam Laird is head of passive investments at the firm, which won best ETF research provider in ETF Express’s recent ETF awards.
Laird explains that ETFs have been accommodated on the firm’s platform for over ten years but research in the sector has been conducted in earnest since the end of 2012.
 “We have been upping our game since then,” Laird says. “We have realised that we had a lot of investors moving into ETFs and the market is complex and they needed more assistance to navigate the options.” There is now GBP1 billion on the Hargreaves Lansdown ETF platform.
Hargreaves Lansdown’s ETF research primarily covers UK listed products but they also have access to ETFs across Europe and the US.  “The range of products has definitely grown, as has investors’ interest,” Laird says. “Our clients are investing more into niche strategies, looking at the market more generally and looking for strategic holdings.”
The first driver in recent growth is cost, Laird believes. “Investors are moving from expensive active strategies with a realisation that the low cost and the simplicity are two things that make ETFs appealing.”
“Transparency is important too,” he says. “And also access for different areas they can’t reach otherwise, either geographical or different asset classes.”
Commodities have featured large in the asset class pick, with investors post the global financial crisis turning to gold in the rush to a traditional safe haven. “That was the first ETF trade for many investors,” Laird says.
The research team at Hargreaves Lansdown comprises 20 researchers in total. “We all cover different markets and sectors,” Laird explains, “And I specialise in ETFs and the passive implementation of them.”
Many platforms within the retail space in the UK have not offered ETFs until recently. The 2012 Retail Distribution Review, focusing financial advisers on fee based, rather than commission based advice, is having a positive impact on the distribution of ETFs in the UK.
“We have always wanted to provide stockbroking services and we have made sure we have the infrastructure,” Laird says. “The Retail Distribution Review is boosting the growth of ETFs in the UK, as advisers who previously wouldn’t have considered them now need some capability there. It is investors who are driving this growth.”

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