Hargreaves Lansdown Asset Management Limited · DRN-5601510

The complaint Mr O complains about being charged a foreign exchange fee by Hargreaves Lansdown Asset Management Limited (HLAM) when he sold units in his Exchanged Traded Fund (ETF). What happened Mr O purchased units of ETF Amundi ICAV Prime Global UCITS ETF in 2023 and 2024 through HLAM’s platform. These were listed on the London Stock Exchange and traded in GBP. Following a corporate action in November 2024, the ETF was merged with another ETF, MWOL GR. Although this was listed in Germany, they also traded in GBP. HLAM didn’t move his holdings here but instead moved him to the Italian Stock Exchange of the same ETF ETFGLO IM which trades in EUR. He decided to sell 257 units from his holdings for £7,918 but incurred £72.52 in foreign exchange fees and is seeking reimbursement of these fees. He says HLAM failed in their duty to act in his best interest, caused him to suffer financial loss, exposed him to foreign exchange fluctuations and unnecessary currency conversion costs. He is also seeking compensation for the distress and inconvenience they’ve caused him in not allocating his fund correctly. In their final response letter on 5 March 2025, HLAM say they were not aware of the MWOL GR being available before the deadline and say they acted fairly in setting up the primary line of the ETF ETFGLO IM. They didn’t uphold his complaint. Unhappy with this response, Mr O brought his complaint to this service. An investigator here considered the complaint and didn’t uphold it. He said HLAM had acted in accordance with the terms of the account and hadn’t done anything wrong. Mr O remained unsatisfied with the response, so this came to me for a decision. I wrote to both parties to let them know that I was thinking of coming to a different conclusion to the investigator. I didn’t think HLAM had provided Mr O all the information he needed to make an informed decision about his investment and had failed to act in his best interest. In response HLAM made Mr O an offer of £100 (inclusive of the £72.52 charges he incurred) to settle the complaint. Mr O responded to say he didn’t accept the offer and wanted a formal decision to be made “as it would be recorded and may help prevent similar treatment of other UK consumers in comparable situations”. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I am upholding this complaint. I will explain further.

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HLAM have confirmed that the document they received prior to the transfer stated the fund would not be listed on the London Stock Exchange. As this option didn’t exist at the time of the merger, HLAM were unable to offer this as an option for its customers wanting to trade in GBP. To continue to offer their customers an option for their holdings, it was added to the primary Italian listing. They have stated the liquidity of the fund was the reason they opted for the Italian exchange particularly as they would have had multiple market makers available to ensure best execution. HLAM say they typically see greater liquidity and volume with the home line of stock on their dealing platform rather than a secondary listing. I appreciate Mr O is not satisfied with this as an explanation because he says that another GBP option was available. But, when deciding on an execution venue, a business would need to consider more than just the currency being used. Although this is a factor for consideration, it alone is not sufficient reason to support a decision to move all the holdings to a particular ETF. Clause A11 of the terms and conditions of the account confirm HLAM’s authority to act in accordance with the Order Handling Policy, authority which consumers agree to give HLAM when they sign the terms and conditions of the account, as Mr O has done here. The investigator has already documented this in some detail as well as the range of considerations for a business to assess, so I won’t repeat this again here. Ultimately, the option to continue in the London Stock Exchange was not available at the time so I’m satisfied HLAM acted in accordance with their Best Execution policy, to allow them to continue maximum trading volumes on an exchange with sufficient liquidity. I have also considered Mr O’s complaints that HLAM didn’t act in his best interest. The Consumer Duty requires that businesses act to deliver good outcomes for retail customers. While this doesn’t mean it prevents them receiving unfavourable outcomes, it does expect businesses to be reasonable and proportionate in trying to achieve those outcomes. HLAM have a duty to treat their customer fairly and act in their best interest. So, I have also considered how this has impacted Mr O, whether he was notified that foreign exchange fees would be incurred, and whether this would have resulted in him doing something differently. There is no dispute that HLAM did make him aware via secure message about the ETF merger on 1 November 2024 and outlined the two options available to him. Firstly that he could do nothing and the holdings would be placed in the new fund, secondly, to sell his existing holdings. What is not clear is whether the implications of this merger were made clear to him. I cannot see that Mr O was made aware that his holdings being transferred to the new fund would mean he would incur foreign exchange charges every time he would convert his proceeds to GBP, or how much these would be. I can see how the lack of information impacted him and I don’t think HLAM have placed enough emphasis on acting in Mr O’s best interests. In the absence of this information, I can’t see how Mr O could have made an informed decision about what to do next. Looking at what has happened since Mr O sold some units and the charges he incurred, it is clear the foreign currency exchange charges had a significant impact on the value of his holdings. Mr O did go on to transfer all his remaining holdings to the GBP line which meant he would no longer incur any currency exchange charges. I can see how important this is for Mr O and on balance I am persuaded that it is more likely than not, being given the correct information from the onset would have resulted in all his holdings being transferred to a GBP line and therefore prevented him from incurring charges. The impact on Mr O particularly when the holdings were first moved, would have given rise to significant distress and inconvenience, especially as the significant part of his holdings remained in the same fund and upon sale would have incurred the same foreign exchange

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fees. HLAM did make progress in resolving Mr O’s concerns by moving his remaining holdings to a GBP line but failed to resolve the issue of the charges he had already incurred resulting in this being an ongoing issue for more than a year. Their actions did not place sufficient emphasis on his best interests, and they have done little to resolve the complaint issue until our involvement. Given the level of impact this has had on Mr O, in his specific circumstances, I think it is fair and reasonable that HLAM should compensate him and the amount I’ve awarded is in line with our approach to making awards of this type. Putting things right To resolve this complaint HLAM need to:- - Refund £72.52, the currency exchange charges incurred in the sale of his units plus interest at 8% until the date of settlement. - Pay £200 in compensation for the distress and inconvenience they’ve caused him. My final decision I uphold this complaint against Hargreaves Lansdown Asset Management Limited and direct them to resolve the complaint as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr O to accept or reject my decision before 16 April 2026. Naima Abdul-Rasool Ombudsman

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