James Daley

By James Daley

Today's Daily Mail contains a shocking little story about Hargreaves Lansdown - a business that I'm a customer of and of which I've always been rather a fan.

It's latest move, however, is a callous error of judgement - profiting from customers when they're no longer around to stick up for themselves.

Hargreaves will hit you with a fee of £36 when your estate requests a valuation after you've died - subject to a minimum charge of £120, and a maximum of £600.

There's undoubtedly costs involved for companies when it comes to reconciling customers' affairs at the end of their life. But any sensible business should realise that if you feel the need to recoup these costs from the estate, you should keep fees to a minimum - this isn't the time to rub your hands together and think about how you can make one last raid on a departing customers' portfolio.

It's Hargreaves' rivals who put it to shame. The Share Centre, for example, charges just £50 for administering a portfolio when the client dies - no matter how many funds it holds. Other brokers charge fees per fund which are in the range of a third of Hargreaves' £36 fee.

Profit over propriety

Someone at Hargreaves will know that this was a risky move. But while it will surely be contrite in the wake of today's criticism, it has also been proudly telling its shareholders how it hopes to make several million pounds in additional fees such as this.

For me, the situation epitomises the conflict between shareholder and customer values, which can be most acutely observed when looking at financial services companies in the FTSE 100 - where pressure from investors is intense.

A few years ago, I used to report on insurance company results for The Independent. I was always gobsmacked by the fact that the chief executives would boast to investors about plans to increase sales by putting up their commission for brokers - shamelessly proud that they could bribe their way to success. Yet to the consumer media, the same execs would try and spin a yarn about how they were selling more insurance because brokers could see the quality of their offer.

Compliance is not about morals

Too many companies fixate on compliance, without taking a step back to see whether or not they are standing on morally defensible territory. Many MPs learned the same lesson the hard way, by claiming for expenses which the rules permitted them to - but which the public was disgusted by when it found out.

Hopefully, Hargreaves will receive enough bad media coverage to learn its lesson. I won't be taking my business elsewhere just yet, but many more bad calls like this one, and I certainly will do.