Treasury committee demands answers from Woodford cheerleader Hargreaves Lansdown
The investment platform regularly recommended the Woodford fund on its Wealth 50 list.
One of Neil Woodford’s biggest supporters is under scrutiny over its role is selling the investment manager’s struggling fund to savers, an influential parliamentary committee has revealed.
Nicky Morgan, chairwoman of the Treasury Select Committee, has written a series of probing questions for Hargreaves Lansdown to answer over its relationship with Mr Woodford’s fund.
Hargreaves Lansdown regularly recommended the Woodford Equity Income Fund to everyday savers right up until the fund was suspended after a series of poor investments led to mass withdrawals by customers.
In her letter to Chris Hill, chief executive of the company, Mrs Morgan asks how much exposure his customers have to the Woodford fund and the average size of direct investment.
She also asks for clarification from Hargreaves Lansdown over comments that bosses had been speaking to Mr Woodford “for some time” about the unlisted companies he was investing in.
Questions were also raised over how long the fund had appeared on Hargreaves Lansdown’s Wealth 50 list of recommended funds, how much money was made in commission, and what discount bosses achieved for clients.
Last week, following the suspension of the Woodford fund, Hargreaves Lansdown attempted to allay fears by waiving any fees it charges investors in the fund – urging Mr Woodford, unsuccessfully, to follow suit.
Mrs Morgan said: “Yesterday, we asked the FCA to provide us with details of its supervisory contact with the Woodford fund. Today, we have asked HL about its links to the Woodford fund, the fund’s inclusion on HL’s Wealth 50 list, and the number of HL customers exposed to the fund.”
She has already called for Mr Woodford to waive fees and welcomed a similar call from the boss of the City watchdog.
Andrew Bailey, chief executive of the Financial Conduct Authority, said Mr Woodford should “consider his position” on charging fees.
The letter follows a similar call for information from the FCA on Monday over its role in ensuring the Woodford fund was being carefully monitored.