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Hargreaves insists business flows ‘held up well’ since Woodford fund saga

Chief executive Chris Hill and Hargreaves bosses have waived 2019 bonuses over the Woodford fund debacle.

Hargreaves Lansdown offices in Bristol (PA). The group said in flows of client funds have “held up well” since the Neil Woodford frozen fund scandal erupted earlier this summer.
Hargreaves Lansdown offices in Bristol (PA). The group said in flows of client funds have “held up well” since the Neil Woodford frozen fund scandal erupted earlier this summer.

By Holly Williams, PA Deputy City Editor

Hargreaves Lansdown has said inflows of client funds have “held up well” since the Neil Woodford frozen fund scandal erupted earlier this summer.

The fund supermarket saw net new business inflows fall 4% to £7.3 billion in the year to June 30, which included a month of the Woodford fund suspension.

But total assets under administration grew 8% to £99.3 billion and pre-tax profits rose 5% to £305.8 million.

I am determined that we learn from events such as these Chris Hill, Hargreaves Lansdown

Shares, which have come under pressure since becoming engulfed in the Woodford fund saga, jumped as much as 10% after the results.

The figures come after it emerged on Wednesday that Hargreaves chief executive Chris Hill, chief financial officer Philip Johnson, chief investment officer Lee Gardhouse and research director Mark Dampier will give up their 2019 bonuses due to the debacle.

Mr Hill had only previously said they would not take bonuses while the fund was suspended.

On unveiling full-year results, Mr Hill said the firm’s business flows and service levels “have held up well” since the fund was blocked since early June.

He apologised once more to the near-300,000 Hargreaves investors who have around £1.6 billion in assets trapped in the Woodford Equity Income Fund.

He said he shared their “disappointment and frustration”.

“In these difficult times we recognise the financial and personal impact the gating of the fund has had on them,” he said.

“I am determined that we learn from events such as these,” he added.

Hargreaves has already waived fees on its platform where clients directly held the frozen Woodford fund, which it revealed is costing the group £360,000 a month in lost revenue.

Mr Hill said it is the “right thing” for Mr Woodford to do the same and waive its management fees.

Hargreaves has come under fire for its support of Mr Woodford in its “best buy” list and in-house funds, despite raising liquidity concerns with the fund manager as early as 2017.

Mr Hill told the Treasury Select Committee recently that Hargreaves Lansdown raised concerns about the Woodford Equity Income Fund in November 2017.

He said on Thursday that the saga was not impacting the firm’s ability to run the business on a day-to-day basis.

But he said they were reviewing aspects of the firm’s investment processes following the fund suspension.

He said the group is looking at “the research we make available to clients and to make that transparent to them”.

“There’s a whole process that we are looking at we will be sharing this with clients,” he added.

PA

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