Hargreaves Lansdown

Portfolio Management Service

0117 317 1690 | www.hl.co.uk

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4 Portfolio management – our long term commitment

5 Diversified portfolios reduce risk

6 The full service solution

8 Professional investment advice

10 More than advice and investment management

12 About Hargreaves Lansdown

13 Recent awards

14 Important Investment Notes

15 Contact us

Contents

We are proud to offer the personal service you might expect from a small company alongside the strength and staying power of the large company we have become.

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Introduction

Many investors find running their own portfolio a time consuming and daunting prospect. Appointing a professional investment manager is often the preferred choice for those wanting peace of mind.Ian Gorham, Chief Executive

THE VERY BEST OF WHAT WE OFFER

> Available exclusively through Hargreaves Lansdown’s Financial Advisers

> Expert research and investment teams with unrivalled access to fund managers

> Portfolio management and rebalancing through our discretionary service

> Additional expertise and oversight from our experienced Investment Committee

> Tax efficient planning. Options include ISAs, pensions and IHT planning

Combined with all the benefits of our award-winning administration

> Simplified paperwork, and secure efficient administration

> Helpful, friendly and knowledgeable staff. Nobody offers a more efficient service

> Online access and regular portfolio updates from our investment managers

> Comprehensive, clear and easy to understand portfolio reports

The Portfolio Management Service is our most comprehensive service. It encompasses professional investment management, expert advice and our market-leading administration. Underpinning the entire service is Hargreaves Lansdown’s financial security which ensures continuity in managing your money.

There is always an expert looking after your money, starting with Hargreaves Lansdown Financial Advisers. They will listen and recommend the most suitable portfolio for you and continue to review its suitability for your financial needs. The Portfolio Management Service is a discretionary service. Our experienced investment managers monitor and rebalance the portfolios on your behalf to maintain the investment objectives and risk level.

The investment manager works closely with a team of research analysts to continually find the best fund managers, review the portfolios and make changes where necessary. Our Investment Committee provides additional expertise and oversight from our most experienced investment professionals. The Portfolio Management Service can manage your ISAs, pension, pensions in Income Drawdown, offshore bonds and non-tax shelter investments if you have £100,000 or more to invest. You can invest in your own name, joint names, in the name of a trust, business or charity.

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Portfolio management –our long term commitment

Looking after our clients’ money is a responsibility we take extremely seriously. The portfolios are managed with the aim of delivering the best returns for the level of risk you choose to take. This is a strategy clients would take given the time, research expertise and access to the best fund managers. Equally important is to provide you with peace of mind. This service looks after you and your investments on a full time, professional basis. Taking a long term approach is key to successful investment. All investors suffer short term volatility, and this can cause considerable worry. Taking a very short term investment horizon heightens the potential for experiencing negative returns.

The longer the investment horizon the more likely investors are to experience positive returns, although of course there are no guarantees.

Making investment decisions is easier when markets are riding high. The decisions are that much harder during troubled times, yet the rewards are greater for investors who maintain focus and continue to make investment decisions. This is where personal advice and investment management from an experienced professional can help.

Our Portfolio Management Service is suitable for longer term investors. Professional management plus the personal support of an experienced financial adviser should ensure peace of mind and freedom from unnecessary worry.

What I like most is it gives me peace of mind that my investments are being well looked after” Mr Barlow, Warrington

Diversified portfolios reduce risk

Long term investors often tend to be cautious people who don’t want to put all their eggs in one basket. Whilst being in the best performing sector may get you the best return in one year, the table below shows the difficulty of attempting to predict the best performing sector consistently. Inevitably some sectors will perform more strongly than others, but pinning too much hope to one area out-performing is a risky strategy.

The table demonstrates this at a glance by showing the annual results from each of the main sectors over the 10 years to 2014. Emerging markets became the area of choice throughout the early part of the 2000s and following significant gains some began to think that Western markets were set to perennially underperform. As you can see since the market lows of 2009, Western markets such as our own have delivered the greatest returns underlining the risk of believing that the past would prove to be a guide to the future.

It is important to understanding how to structure a portfolio based on sector risk and to what extent certain sectors will complement one another. Many investors choose to leave this skill to a professional investment manager.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Emerging Markets 50.7%

Europe Ex UK 18.5%

Asia Pacific Ex

Jap36.4%

Japan-2.6%

Emerging Markets57.7%

Emerging Markets22.9%

Corporate Bond3.8%

Europe Ex UK19.0%

North America31.3%

North America17.7%

Japan43.5%

Asia Pacific Ex

Jap17.7%

Emerging Markets34.8%

Corporate Bond

-10.3%

Asia Pacific Ex

Jap52.4%

Asia Pacific Ex

Jap21.4%

North America

-1.9%

Asia Pacific Ex

Jap16.7%

UK26.2%

Corporate Bond9.9%

Asia Pacific Ex

Jap32.3%

Emerging Markets17.3%

Europe Ex UK12.6%

North America-18.5%

UK30.4%

Japan19.3%

UK-7.1%

UK15.1%

Japan26.1%

Asia Pacific Ex

Jap9.5%

Europe Ex UK24.9%

UK17.2%

North America

4.5%

Europe Ex UK-24.6%

Europe Ex UK19.4%

North America17.7%

Japan-11.6%

Emerging Markets

13.1%

Europe Ex UK25.9%

Emerging Markets

2.9%

UK20.7%

Corporate Bond-0.7%

UK1.8%

UK-32.3%

North America

19.1%

UK17.3%

Europe Ex UK-15.6%

Corporate Bond12.3%

Asia Pacific Ex

Jap2.2%

Japan0.6%

North America18.5%

North America

-1.3%

Corporate Bond-0.7%

Asia Pacific Ex

Jap-33.2%

Corporate Bond14.3%

Europe Ex UK8.4%

Asia Pacific Ex

Jap-16.4%

North America

7.5%

Corporate Bond0.2%

UK0.5%

Corporate Bond6.8%

Japan-14.5%

Japan-11.0%

Emerging Markets-37.0%

Japan-3.4%

Corporate Bond6.9%

Emerging Markets-19.1%

Japan3.4%

Emerging Markets-4.2%

Europe Ex UK-0.9%

Mark Dampier Head of Research

Mark Dampier is head of our Research Team. Mark is regularly quoted in the financial press as his views on markets and funds are highly respected. He contributes regularly to The Times, The Telegraph and The Independent. He has been working in financial services since 1983 and joined Hargreaves Lansdown in 1998.

Mark’s knowledge and insight into the markets and funds in particular complements the investment team’s analysis of portfolio holdings.

Lee Gardhouse Investment Director

Lee Gardhouse is responsible for the Investment Team which manages both the Portfolio Management Service and the HL Multi-Manager fund range. Lee is an Associate of the Society of Investment Professionals and has been with Hargreaves Lansdown since 1995.

Lee established and oversees the development of the systems our Investment Team use to analyse and select funds.

The HL Multi-Manager funds are managed by our sister company Hargreaves Lansdown Fund Managers.

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Past performance is not a guide to future returns. Source: Lipper IM, figures correct as at 31/12/2014

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Portfolio management – the full service solution

The investment manager aims to establish the right long term asset mix, and then add value with fund managers who consistently demonstrate superior stock selection.

Unrivalled access to fund managers

Fund managers producing results which exceed the expected return are considered for further analysis. Our Investment Team carries out over 300 fund manager meetings a year to examine the quality of funds and managers.

These meetings enable them to understandmore about what the manager looks for in a stock and how they construct the fund. This direct contact allows the researchers to check that unacceptable risks have not been, and are unlikely

No one fund manager, or fund company, delivers the best results across all sectors. Our Investment Team searches globally and chooses the best fund managers in each area to maximise your returns. They look for consistent out-performance and concentrate on finding and monitoring the best stock pickers. If a fund manager is not performing, a replacement is carefully chosen.

The preferred investment vehicles are unit trusts and Open Ended Investment Company (OEIC) funds. These allow good diversification, and the price directly reflects the value of the underlying investments.

Choosing investments using proven mathematical research techniques

Over 2,500 funds are actively tracked to examine fund performance. Our Investment Team have developed their own unique modelling tool to analyse funds, enabling them to dig deeper and interrogate the make-up of a fund. Amongst other fundamental criteria the system identifies: sectors, geographical location, market capitalisation and yields. The results identify fund managers who have outperformed against their sector by adding value through stock selection.

It’s good to be a client of such a well thought of and knowledgeable company” Mr Ing, Cleveland

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to be, taken, and assess the likelihood of continued out-performance.

Many managers who consistently add valuedo so by good stock selection. They have the skill to identify companies with the best prospects to deliver returns. The short term unpredictability of financial markets means very few can reliably time the markets to buy at the bottom and sell at the top.

As one of the UK’s largest brokers, Hargreaves Lansdown has access to the best fund managers and is best placed to negotiate excellent terms for clients. Direct access to a manager is an advantage when reacting to sudden market events.

Whilst our Investment Team selects funds which they believe have the potential to achieve the best possible returns, performance is not guaranteed. Please note that all investments can go down as well as up in value.

The final element of successful portfolio management lies in the blend of the highest quality investment ingredients and the right long term asset mix. Whilst many investors find the time to select investments, they often neglect this important function. The effect of neglect becomes more apparent over time and can lead to the necessity for a complete and expensive portfolio overhaul.

The Portfolio Management Service portfolios are structured so the funds complement each other and are designed to provide a healthy return for the risks taken.

As demonstrated on page five, there are marked variations in the performance of sectors and asset classes over time. Major shifts can quickly change the risk profile of a portfolio. The portfolios are regularly rebalanced to maintain the focus on the core investment objective and agreed risk levels.

The selected fund managers are combined into a series of multi-manager fund wrappers, each representing a particular theme or sector. This creates a range of tax-efficient and flexible structures within which fund switches can be made easily – particularly important in illiquid or volatile markets. This range of multi-manager funds features heavily within the portfolios. This makes for quick, easy, low cost and tax-efficient portfolios re-balancing. Single manager funds are also used to complement these core structures.

Holdings are added to when prices seem to represent good value and gains locked in when the performance has been relatively strong. Portfolios will have a small cash balance to cover charges and to allow flexibility to take advantage of any investment opportunities as they arise.

Hargreaves Lansdown Investment Management team

Professional investment advice

Expert and personalised investment advice rests at the core of the service. The Portfolio Management Service is offered exclusively through Hargreaves Lansdown’s Financial Advisers.

Whilst the Investment Team look after your money, your Financial Adviser is dedicated to looking after you.

Hargreaves Lansdown’s Financial Advisers are carefully selected because of their ability, comprehensive knowledge of investments and their understanding of the preferential tax treatments available to you.

An experienced adviser will discuss your financial objectives with you. Once they have analysed your current circumstances and goals, they will provide you with a written personalised recommendation detailing the investment strategy. Their recommendations will ensure you take the best advantage of ISAs, pensions and offshore bonds when appropriate.

Their service doesn’t stop once you have made your investment. The service includes a regular review to ensure the investment approach remains appropriate to your circumstances.

You will have a point of contact to ensure your questions are answered quickly and accurately.

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Our Financial Adviser is friendly and approachable and explains things very well. He kept us informed at all times... and I would have no hesitation in recommending him to a friend.”Mrs Jarvis, Herefordshire

Although a large and complex organisation we do feel that you have not lost the personal touch.”Mr & Mrs Davis, Wiltshire

I can never see myself dealing with anyone else.” Mr Norton, Mid Glamorgan

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More than advice and investment management

Hargreaves Lansdown administers your account and its employees take your telephone calls. Administration or client service is not outsourced to anyone else.

Your telephone calls will typically be answered in seconds by a helpful and knowledgeable ‘real person’ on the Bristol-based Helpdesk. Hargreaves Lansdown’s systems ensure the highest standard of efficient administration for clients, meaning you are quickly provided with clear and accurate account information when you have a query.

In a recent client satisfaction survey, 96% of clients rated Hargreaves Lansdown’s services our service as excellent, very good or good.

*Source: HL Survey May 2015, 14,334 responses.

Simplified paperwork & tax certificates

Typically, clients want full transparency of their account but don’t want unnecessary paperwork. You will be kept informed with twice yearly

comprehensive and consolidated investment reports. These reports include clear valuations and detailed statements. They also include an annual disposal schedule and tax certificates to make completing your tax return that much simpler.

The reports are accompanied by a market summary and commentary on how your portfolio has performed and the changes which have been made. The portfolio analysis will give you a clear breakdown of asset allocation and how your investment is diversified across countries and sectors.

Account flexibility

You can invest by making a one-off investment, transfer in existing monies, and/or set up regular savings arrangements. Your money can be invested for income, growth or both. You can receive an income from your portfolio, or have income reinvested. You can use the Portfolio Management Service for all of your investments, or just some while you continue to manage the rest.

Online access 24 hours a day

You can view your portfolio online at any time. Using exclusive Portfolio Analysis tools you will be able to look at performance and how your portfolio is invested.

X-ray Analysis looks at asset, regional and geographical allocations. The results are displayed in a clear and concise way, but if this level of information is more than you need, you can take comfort in the simplicity of your bi-annual valuation and statement.

Competitive charges

The Portfolio Management Service offers exceptional value for money. Our charges are transparent and competitive.

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We do not charge for buying, selling or switching funds within the portfolios. We use our buying power as one of the largest UK brokers to get the best discounts on initial fund charges (up to 5.5%) and typically the charge is fully discounted. We also have access to low ongoing fund charges.

The service has a low charge for administration, with a maximum of 0.45% which reduces for larger portfolios. The discretionary management charge is waived for Hargreaves Lansdown’s own funds and is just 0.75% +VAT for third-party funds. Please note, these charges will change from 1 December 2015. Details of these charges, along with information on any adviser charges are available from your Financial Adviser. Alternatively our charges are available online, or in the main tariff on the back cover of our Terms and Conditions.

Data security

We take your security very seriously. We have invested in a range of physical, electronic and procedural controls to protect you and your money.

Our website uses encryption technology and we run security checks when you contact us online, or by telephone.

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Financial Security

We have grown our business organically by aligning our interests with those of our clients. We focus solely on providing investment services to our clients. We place deals only on behalf of our clients, we do not buy and sell investments for our own benefit. This means our business depends solely on the service we provide you and the performance of your investments.

We do not act as a bank, we have no borrowings and we have no exposure to sub-prime assets. Our growth has been achieved without borrowing and we have robust internal controls and audit procedures.

The following are just some of the key protections which apply to you as a private investor. Please ask your Financial Adviser for further details, or visit our website: www.hl.co.uk.

Regulation

Hargreaves Lansdown Asset Management is authorised and regulated by the Financial Conduct Authority (FCA Registration number 115248).

Client Money

All client money is held on deposit in Trust accounts, so that any creditors of Hargreaves Lansdown would have no legal right to it, we cannot use any of this money to cover Hargreaves Lansdown’s obligations, and is subject to controls and procedures over and above those required by the FCA.

If one of the banks which we use for depositing cash balances is declared in default, each individual is entitled to up to 100% of the first £85,000 in total in compensation for losses across all their deposits with that institution. Our current policy diversifies client money across a number of separately licensed institutions, which means our clients would receive this level of protection for each of the banks we use. Further information is available at www.fscs.org.uk.

Portfolio Holdings

Stock you hold with us is held by Hargreaves Lansdown Nominees Limited, a non-trading company which is a member of the Hargreaves Lansdown Group of Companies. As a non-trading company it cannot run up liabilities of its own and Hargreaves Lansdown accepts full liability for any default by our nominee company. All your assets are held in an account designated with your name and, as with client money, are subject to controls and procedures over and above those required by the FCA.

Financial Services Compensation Scheme

Investors are likely to be covered by the provisions of the Financial Services Compensation Scheme (FSCS), if Hargreaves Lansdown ceases trading. It can award up to £50,000 in compensation to any one investor where they decide that an investment business is in default and is unable to satisfy any claims against it. Further information is available at www.fscs.org.uk.

About the Hargreaves Lansdown Group

Hargreaves Lansdown was established in 1981 and is now one of the leading providers of investment management products and services to private investors in the UK.

Recent awards

As a testament to our excellent service, here are just a few of the recent awards received by Hargreaves Lansdown and individuals working within the Hargreaves Lansdown Group:

2015

Best Overall Platform – Online Personal Wealth Awards

Best Fund Platform – City of London Wealth Management Awards

Best All Rounder – The Lang Cat

Best for Pensions (and Pension Freedoms) – The Lang Cat

Best stockbroker for international dealing – ADVFN

Best for Pensions, Boring Money Online Investment Services Awards

Best for Service – Boring Money Online Investment Services Awards

Best Overall – Boring Money Online Investment Services Awards

2014

Best Wealth Manager – MoneyWeek Readers’ Choice Awards

Best ISA Provider – MoneyWeek Readers’ Choice Awards

Best SIPP Provider – MoneyWeek Readers’ Choice Awards

Best Direct SIPP Provider – Your Money

Best SIPP Provider – What Investment

Best Direct Platform – The Platforum

Best Service – The Platforum

Gold Trusted Merchant (based on client feedback) – Feefo

Gold Standard for Individual Pensions – Gold Standard Awards

Gold Standard for Retirement – Gold Standard Awards

Best for beginners – The Lang Cat

Estate Planning Adviser of the Year, Danny Cox, Hargreaves Lansdown – Unbiased.co.uk Media Awards

Technology Innovation of the Year, Professional Pensions – UK Pension Awards

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Important Investment Notes

Investments and the income from them can go down in value as well as up, and as such you may not get back the full amount invested. The past is not a guide to future performance. Unlike bank or building society deposits, neither income nor capital is guaranteed. If you withdraw from these investments, especially in the early years, you may not get back the full amount invested. These investments are long term investments. Hargreaves Lansdown cannot be held responsible for any fall in value of the portfolio purchased by the Manager on behalf of the Client.

This service invests into a range of funds with varying levels of risk. Higher risk and lower risk funds may be purchased for the Portfolios which balances out to meet the overall risk objective for the Portfolio as a whole. Some funds invest into property and the value of that property can be a matter of judgement by a valuer. There may also be liquidity problems that can delay the return of sale proceeds to investors during any period when the property or other investments are not readily saleable. Some funds invest in non-investment grade bonds which bring an increased risk of default on repayment which translates into a risk that the capital value of the fund will be affected.

The value of funds which hold overseas investments will be affected by changes in exchange rates. Some funds may invest in countries, sectors or companies which can carry higher risk or which may be less liquid.

Any tax reliefs referred to are those currently applying. Their value depends on the individual circumstances of the investor. Levels and bases of and reliefs from taxation are subject to change.

Before transferring an ISA or other investment you should carefully consider whether you believe it will be beneficial over the period of the investment to do so together with any exit charges and any charges on your new ISA. Your existing holdings will be liquidated to transfer into this service. You should be aware of the possibility of a shortfall if you cancel your investment and the potential for loss of income or growth following the cancellation of your investments or a rise in the markets, whilst the transfer is pending.

Excellent, highly efficient prompt help and information when I phone Bristol, and no buttons to press!!”Mr Ranger, Berkshire

Contact us

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Call the Advisory Helpdesk on 0117 317 1690 Monday – Friday 8.30am – 6pm;

Email advice@hl.co.uk; or

Visit our website www.hl.co.uk/advice

Write to Hargreaves Lansdown, One College Square South, Anchor Road, Bristol, BS1 5HL

To request your consultation or if you have any questions, please:

Hargreaves Lansdown Asset Management Ltd, One College Square South, Anchor Road, Bristol, BS1 5HL. Authorised and regulated by the Financial Conduct Authority

Enquiries: 0117 317 1690

0117 317 1690 | www.hl.co.uk