U.K.’s Biggest Broker Takes On Funds That Made Him a Billionaire
This article is for subscribers only.
Peter Hargreaves made himself a billionaire by selling mutual funds through his discount broker, Hargreaves Lansdown Plc. Now, as planned rules threaten his business model, he intends to raid fund managers’ profits.
Hargreaves built the firm into the U.K.’s biggest retail broker, the country’s equivalent of Charles Schwab Corp., by selling funds and charging money managers rather than clients. Starting in 2014, U.K. brokers will have to charge clients directly, a move analysts say jeopardizes the firm’s 64 percent profit margin. Hargreaves says funds must eat the cost.