Hargreaves Lansdown chief executive Chris Hill has said business flows have held up well despite the reputational damage it has faced for championing Woodford Equity Income in the lead up to its suspension.
In the Hargreaves 2019 annual report, published this week, Hill said net new business for the year was £7.3bn and the business took on 133,000 net new clients. The business now accounts for 40.5% of the D2C platform market, he noted.
The report follows the £99.3bn assets under administration and £480.5m revenues reported in the annual results published in August.
Despite the positive figures, he has already committed not to take his bonus until the suspended Woodford fund reopens. The report confirmed this could shave up to 79% off his remuneration.
His base salary was £612,000 for the period covered by the report and rose 2.9% to £630,000 based on an August pay review conducted several months after Woodford Equity Income suspended. This was slightly below the budgeted 3.1% rise across the organisation.
The Woodford fund is currently scheduled to reopen in December.
HL expected Woodford to bounce back
The chief executive’s three-page note covered business strategy, the market opportunity among the aging UK population and proposition, including the launch of the HL Select Growth Shares fund and its cash management service, Active Savings.
He then turned to the Wealth 50 and Woodford Equity Income, stating on the latter point that the research team had expected the fund would bounce back strongly from underperformance, like it had in 1999, 2003 and 2009.
When it instead suspended, Hill said Hargreaves “immediately removed the fund from the Wealth 50, communicated the suspension to clients and dealt with all calls and emails received since in a timely and orderly manner” as well as waiving the platform fee.
“Since these announcements, Hargreaves Lansdown’s own business flows and service levels have held up well,” he added.
Analysts have previously estimated Hargreaves’ tarnished reputation following the Woodford suspension would wipe £7bn from flows over the next three years with the most damage expected to occur in 2020 and 2021.
He said he shared clients’ “disappointment and frustration” and is “determined we learn from events such as these”.
“The shortcomings of one fund should not detract from the benefits of the favourite fund lists like the Wealth 50.”
