Hargreaves provides lacklustre update for clients on Woodford

Woodford debacle described as a ‘continuing drip drip drip damaging their credibility’

Hargreaves Lansdown has kept its cards close to its chest as news of the Woodford Equity Income wind-up draws a flurry of reaction from rival D2C platforms and other intermediaries.

Portfolio Adviser understands the 133,000 Hargreaves clients trapped in Woodford’s frozen fund had been contacted by the close of day on Tuesday.

But an update to its website published by Tuesday afternoon held back from wider commentary on the fund, instead providing factual detail on what its many investors exposed to the fund could expect from the wind down.

Hargreaves head of investment analysis Emma Wall said in the update that investors who hold Woodford Equity Income through Hargreaves multi-manager funds will get their money back via the platform and that investors who hold the fund directly will be refunded by Link. Hargreaves will continue to waive its platform fee on Woodford Equity Income.

She did not mention Link’s warning that costs are set to increase after the wind up begins to cover brokerage fees for PJT and Blackrock.

But she told investors: “The payments to investors will be determined by the share price of the underlying assets when they are sold.”

When Portfolio Adviser approached the D2C company for comment on the wind up, a spokesperson for the firm said: “We are working closely with our clients to update them and keep them informed.”

‘They messed up big time’

Fundexpert managing director Brian Dennehy was not surprised Hargreaves went quiet on the day as “there is nothing they can say which isn’t going to reflect negatively on them”. “They messed up, big time.”

The D2C firm has been heavily criticised for its handling of the Woodford saga, after years of doggedly defending the UK equities manager as others pulled money out and dropped fund recommendations.

Woodford’s struggling equity income fund survived the cut when Hargreaves pared down its list of favourite funds from 150 to 50 names and appeared in six out of 10 of Hargreaves multi-manager funds.

Dennehy said he hopes the Woodford incident will prompt Hargreaves to “completely overhaul their approach to ‘best buy lists'” otherwise the credibility of the wider industry and its brand could take a hit.

“This is not a torpedo into the side of HL,” he said. “But it is a continuing drip drip drip damaging their credibility, unless they grasp the opportunity to change.”

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