This company has had continued revenue growth with high margins for the last 10 years or more. The PE at over 35 (37.1 today) anticipates continued growth.

HL has some of the highest fee charges compared with its peers ( if not the most expensive in some areas).
Looking at its SIPP and ISA charges it should reduce charges by at least 30% to be truly competitive.
Its real business is flogging unit trusts where it appears to make a high proportion of its revenue from trailing commissions.

It maintains customers by two methods:-

1) It has chatty newsletters with client testimonial and tends to suggest unit trusts and even HL trust of trusts as the best strategy. It also has the fund picking top 50 which incidentally included the Neil Woodford Fund which is now frozen and has possibly lost 50% value.
THIS HAS AT BEST GIVEN THEM BAD PRESS AND AT WORST WILL LOSE THEM INCOME FROM THE FUND AND A MIGRATION OF CUSTOMERS.

2) The lock in of high exit charges makes customers reluctant to leave.
THERE IS PROPOSED GOVERNMENT LEGISLATION TO BAN / LIMIT EXIT CHARGES

I believe this stock needs to be re rated and should certainly not have the superhigh PE of 37
20-25 should be high enough until the full affects of legislation client migration is felt .
2) Has high and unreasonable Exit Charges

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