Hargreaves Lansdown has been left red faced after marketing material championing Neil Woodford landed on its clients’ doorsteps over the weekend.
The June edition of the Investment Times featured the equities manager championing his portfolio.
The paper edition also featured commentary from head of research Mark Dampier detailing his retirement nest egg as many Hargreaves clients see their savings trapped in the suspended Woodford Equity Income fund he had championed via the Wealth 50.
Hargreaves Lansdown confirmed the Investment Times went to print on 29 May, before Woodford gated investors in the fund due to a high level of redemptions. The platform also denied Dampier is planning to retire, in contrast to reports published in the Financial Times on Friday.
Woodford refers to ‘uncomfortable journey’ for investors
In the marketing feature, Woodford features alongside details of his Equity Income fund.
He said: “From time to time, markets become detached from valuation reality and while they are, fund managers like me appear to be incapable of delivering good outcomes. I appreciate that this can be an uncomfortable journey for investors but valuation is the only reliable predictor of long-term investment returns.
“Crucially, the portfolio is positioned how I want it to be and is completely focused on a valuation opportunity.”
PR faux pas
Darren Cooke, chartered financial planner at Red Circle Financial Planning, said: “Sending out the magazines featuring Woodford just days after his fund suspended is pretty awful, again clearly, they were already printed but I doubt they had been posted so it probably could have been stopped.
“I’d say it a pretty big PR faux pas on their part and if I was an investor I would be questioning the whole relationship with the Wealth 50 and Hargreaves.”
Likewise, Martin Bamford, managing director at Informed Choice, said it was a “sloppy move” from HL.
“It’s hard to know for sure whether there was time between news of the fund suspension and distribution of this communication to stop the process.
“I’m sure HL will be hoping for a quieter news week this week, so they can take stock and come up with a more proactive campaign to explain and rebuild trust.”
Clive Waller, managing director at CWC Research, said: “Interestingly, much of HL’s marketing is old fashioned paper – a very slow way of communicating to customers.
“They were too slow in dumping Woodford and it was certainly a mistake sending out an out of date list.”
Hargreaves boss issues apology
Hargreaves chief executive Chris Hill (pictured) has issued an apology in response to Woodford’s suspension.
He said: “I would like to apologise personally to all clients who have been impacted by the recent problems with the Woodford Equity Income fund. We all share their disappointment and frustration. Our priority right now is to support our clients and keep them informed.”
He said the shortcomings of one fund “should not detract from the benefits of favourite fund lists like the Wealth 50”.
“We are confident in the robustness of how we analyse, research and compile our favourite fund list with a focus on ensuring best value for clients – nonetheless, we are reviewing this specific situation to ensure we learn from it and address it for the benefit of our clients going forward.”
Hill’s apology follows that of Woodford’s, who said he was ‘extremely sorry’ for the action taken.
