Hargreaves Lansdown Share Discussion Threads

[hpcg] 06/6/2019 12:08

They didn't, they backed down as people started moving money:

Trust is very important for investment platforms and is about the only moat that exists. Erosion of trust leads to less business. The by definition unsophisticated investors that kept money with Woodford for a long time, and that used HL, will link the two and will be saying to their friends, 'whatever you do don't use HL, you can't trust them'.

[ochs] 06/6/2019 12:03

Last para of the Lee Gardhouse article - this will hit the HL bottom line, but it might be enough to encourage client's not to leave the HL platform over this...

"We’ve also taken the decision to waive our charge to hold the Woodford Equity Income Fund while dealing is suspended. We don’t think it’s fair to charge our clients a fee while they can’t trade in this fund. We have been in communication with Woodford Investment Management to explain why we think this is the right thing to do and have put pressure on them to do the same."

[chucko1] 06/6/2019 11:55

Hpcg, I was unaware of that episode with investment trusts. How did they try explaining that?

[hpcg] 06/6/2019 11:52

It is still priced to perfection, requiring 10 years of steady growth to be anything like a fair price. The AUM, and in particular the fund AUM has to grow. Some things that can limit growth:

People look at other platforms.
People take notice of the higher platform charge on HL.
They are forced to reduce fees.
Even more people ditch managed funds for ETFs.
Those that want managed funds look to Investment Trusts that have no platform fees.

Remember the hilarious episode where they tried to introduce fees for Investment Trusts - that caused plenty to leave, and personally it caused me to open an ISA with IG, which is now my active ISA platform. I think the episode with property open ended funds, not limited to HL of course, really benefited the listing of more and more REITs. It wouldn't surprise me if open ended property funds ceased to exist in under a decade.

[ochs] 06/6/2019 11:47

The HL CIO (Lee Gardhouse) has written a somewhat defensive piece on Woodford - seems he's sticking to his guns for now! He can't even bring himself to say sorry to HL clients, although goes as far as saying the last week has been 'unsettling'...

[chucko1] 06/6/2019 11:37

ElCap, GBoF, can we call a truce? We all know you won’t be exchanging cards! That’s written in stone, but there’s too much fizzy stuff going on with Woodford et al. to punctuate the boards with your inverse love affair.

Shout at me instead!

On HL, it’s really bad but with a market cap of £9bn, I’m not sure that fines and compensation causes massive damage. This isn’t akin to PPI, so I have reduced my short somewhat. Ain’t going long though, it likely slides lower even without the recent debacle.

ElCap, another Odey short!! You know you love them.

[greatballsoffire451] 06/6/2019 10:36

AWWW RIGHT ON CUE

HERE COMES THE JEALOUS TROLL

hey pig filth - hows NLG coming along ?


hahahahahahahahaha

[greatballsoffire451] 06/6/2019 09:13

off she comes. this has only just started folks

[greatballsoffire451] 05/6/2019 22:37

Ochs, yes I agree that it shouldn't make a material difference to bottom line. My issue is as you said reputational and any possible legal fallout. That for me is the real issue here. Have they miss sold?

[hpcg] 05/6/2019 22:04

"is whether the gating of a widely-held unit trust furthers the appeal of more liquid exchange-traded funds, for which the platform charges no fees."

Both Woodford and Barnett have under performed the FTSE100 over 1 3 and 5 years, by a lot. And the FTSE100 is about as bad as it gets terms of a major diversified index. Good marketing material for Vanguard if nothing else. That's the potential crisis. Propitiously for us shorts markets will take a pounding, on average, until the Fed cuts rates a couple of times, so HL heading back to the mid teens irrespective of Woodford.

"... the group advocated long-term investing ..." one of the grossest most appalling lies the investment industry feeds us. See also 'time in the market not timing the market'.

[ochs] 05/6/2019 20:49

greatballs, similar to what lomax99 said earlier, most of HLs business and bottom line is the platform business (0.45% per annum on funds) and they make money whether clients hold Woodford or switch into a different fund (once they can). Unless clients actually take their money off the HL platform en masse and move to rivals then this is unlikely to harm the medium term growth story.

The biggest issue is reputational and whether investors will continue to trust HL's W50 going forward. I'd expect the investment director Lee Guardhouse (also manager of most of the Multi-Manager funds) to take the fall for their continuing support for Woodford over the past year or so.

[jonwig] 05/6/2019 20:19

Ochs (#365) - it's the uncrossing trade in the closing auction. Matches buyers and sellers.

[ochs] 05/6/2019 20:07

greatballs, your call was right yesterday and I should have gone short at 2,130p given the chance... however now I think there'll be a bounce soon. Might not be tomor, but it will be soon. Look at SJP today after they announced the axing of Woody.

[greatballsoffire451] 05/6/2019 19:59

Was a sell obviously Oh dear

[ochs] 05/6/2019 19:58

Large late trade at 16:35 - £16.7m at 1,981.5p, based on the pricing you'd think that was a sell but is being reported as a buy.

[lomax99] 05/6/2019 19:50

IC today:Woodford fallout spreads to Hargreaves LansdownShares in FTSE 100-listed Hargreaves Lansdown (HL) took a hit on Tuesday as investors in the retail investor platform braced themselves for further fallout from the suspension of trading in embattled active manager Neil Woodford's flagship Equity Income Fund. Hargreaves, which holds a stake in the fund through its multi-manager funds and listed it in its "Wealth 50 list" up until the suspension, has previously faced criticism for its continued backing of Mr Woodford's funds. During the past year, poor performance and investor outflows have reduced the size of the Equity Income Fund from £6.8bn to £3.7bn.Separately, the platform decided to remove the Woodford Income Focus Fund from its top fund picks ahead of a "resolution to the dealing suspension in the Woodford Equity Income fund". That isn't expected for up to 28 days, though the reputational hit to Hargreaves remains in question."The drop in the Hargreaves share price probably reflects some reputational risk," Shore Capital analyst Paul McGinnis said, but suggested that the platform's clients "have already been able to switch out of Woodford into other funds", and that it was not obvious from Hargreaves net flow data "that clients have been leaving the platform entirely". Hargreaves' head of investment Emma Wall said that while the group advocated long-term investing and backed Mr Woodford for his "compelling" track record, she acknowledged "the disappointment investors must feel with Woodford's recent performance".Whether regulators could apportion some blame to Hargreaves is a moot point. Earlier this year, a Financial Conduct Authority (FCA) investigation into the investment platform market concluded that recommended fund lists tended to help investors. Potential calls for another review in the wake of the Woodford fund gating may therefore meet some resistance. "The selection methodology and track record on such lists looks pretty solid," said Mr McGinnis.Shares in key Woodford holdings including Burford Capital (BUR), Redde (REDD) and Allied Minds (ALM) also fell on the news, as investors anticipated forced sales by the fund manager could provide more attractive entry points in the coming weeks. The FTSE 250-listed Woodford Patient Capital Trust (WPCT) also suffered a shareholder exodus, dropping as much as a fifth on Tuesday morning.IC ViewQuantifying Hargreaves' reputational hit from this saga is probably impossible at present. On balance, we would argue it is Neil Woodford – rather than one of his supporters – who is likely to remain in investors' memories for longer. The broader question for Hargreaves (and its peers) is whether the gating of a widely-held unit trust furthers the appeal of more liquid exchange-traded funds, for which the platform charges no fees. Hold at 2,132p.

[lomax99] 05/6/2019 19:29

hpcg - Stocks represent c. 34% of AUM (£31bn out of £91.6bn) at last year end. Stockbroking fees are c. 16% of HL's fees (£72.6m out of £447.6m) at last year end. Stockbroking activities deliver lower margins. I have no doubt there are better broking alternatives, so whilst they absolutely need to provide a broking facility, it is not where their focus is.

[roddyb] 05/6/2019 17:40

I hear adverts on the radio by lawyer looking for potential clients who lost money on investments sold by Barclays, Lloyds etc. Do you think these enterprising lawyers are going to attempt a class action against HL for continuing to promote Woodford’s Eq Inc fund? Surely the total compensation cannot account be anything like the -20% share price movement we have seen this week?

[porsche1945] 05/6/2019 16:42

SJP just pulled the plug on Woodentops 3.5b fund mandate.

[greatballsoffire451] 05/6/2019 16:26

HL waive platform fee for woodford fund

least they can do

[its the oxman] 05/6/2019 16:13

Pushed Woodford for too long and too hard. Some clients will not be happy and will complain for sure. Be interesting to see if they now actually do something like stop recommending his funds. Will take a while to understand extent of the fall out.

[chucko1] 05/6/2019 15:25

Odey have been short quite a while. They will get paid on this in due course. Worth keeping an eye on their short and whether they look to increase it.