Hargreaves Lansdown Share Discussion Threads

[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.

[montyhedge] 05/6/2019 15:02

To me still the best short in the market. I would not mind betting one or two of the big boy hedgies, show up taking a short position, Odey etc.

[greatballsoffire451] 05/6/2019 14:06

HL - great website but total muppets really. as you say no terry smith. criminal not to have him up there.

[rogerbridge] 05/6/2019 13:54

I am not sure hw HL pick their wealth 50 funds. Fundsmith, has been a top performing trust for some years, but they will not include it.

[hpcg] 05/6/2019 13:49

lomax99 I have share accounts with HL, IG and Barclays. HL are very good when it comes to corporate actions, but expensive if one is a semi regular trade. Exchange rates for foreign currencies are outrageous. Coverage outside the UK is moderate. IG much better for someone experienced; slightly lower cost for dealing fees but the main attraction is DMA, especially on NASDAQ where the HFT will steel your pennies unless one uses a limit order. No open ended funds, which is not much hardship excepting in fixed interest and some other esoteric markets. Barclays struggle with anything complicated, but their dealing engine is still better than HL. I've never owned a fund with them. Since they simplified their offering they have become less attractive to use. They were good for structured products, which if you know how to use them offered some excellent opportunities when the time was right.

[effortless cool] 05/6/2019 13:28

A long way to go (down, naturally) on this, I think.

[lomax99] 05/6/2019 13:25

Oversold but may track lower, given current 'noise'. Long term structural growth story still intact. (Just look at the 'competition' and the 'quality' of their operations & margins!). Hoping for positive update on Active Savings in forthcoming results. Will add, progressively more, on subsequent dips.

[porsche1945] 05/6/2019 12:38

I agree, why would you buy it, every company linked to HL could feel the company is toxic, they will want better deals and with the amount of bad press snowballing can only be downward pressure for a long time as the Woodford sxxtshow I think could take 6-12 months to try and manage down, maybe longer, certainly wont be open in 28 days, everytime they open the doors there will be a stampede for cash. I expect HL will have to throw someone under the bus pretty soon, expect a resignation from that little twerp Dampier and maybe someone higher up the foodchain. Hargreaves always pretty vocal, lets hope he puts his foot in it too. I have taken a short position now as well.

[hpcg] 05/6/2019 12:11

Trebled my short at just over 2000. You'd have 1650 just on the shape of the markets, never mind the regulatory threats. The other question from a short perspective, is remove the existential concerns, what on earth is the buy case on fundamentals?

[porsche1945] 05/6/2019 11:33

...the moment it really hits that the regulator is investigating HL these are down to 12 quid, a really good short looming.

[bradbury3559] 05/6/2019 11:29

Come join the party #BBSN

[porsche1945] 05/6/2019 11:25

Dampier offloaded 6 million quids worth of shares in the few weeks preceeding this, naughty. I couldnt work out why HL were not in the x hairs of the regulator ages ago, this pumping of Woodford especially actually caused me to close my ac with them a few years ago, moved to iweb, because of the endless mailshots they said I could not opt out of, I cited the pushing of Woodfords uk facing dross as a concern to them at the time.
FT this morning says finance minister now going to look at tie up between platforms and funds, Lindsell Train own a huge chunk of HL, HL owned a huge chunk of Woodentop, all unhealthy and about to get " found out ". Meanwhile Mr Lansdown down in the Channel Islands counting his tax free billions and Hargreaves prattles on about how great the brexit sxxtshow will work out, meanwhile the poor idiot investors are probably waiting a year I reckon to be able to access whats left of their dosh.

[hpcg] 05/6/2019 10:45

GrowthPotential / a1samu - HL pumped a demonstrably failing fund, and one that sailed close to the wind with UCITS requirements. There is an argument to be had that a list of 'our favourite funds' is tantamount to advice. If 'our favourite funds' happen to be more commercially attractive than not our favourite funds, then there is more than a little conflict of interest. So yes, there is potential for miss-selling, but that is not my central thesis. HL is highly rated, and that rating implies high quality growth. I would argue that investors in the Woodford funds are likely to be the least risk aware, and while the promotional material always clearly states no guarantees, this isn't advice, etc etc, the nods and winks imply otherwise. I would also suggest the portrayal of Woodford as a lone contrarian hero winning out against the smart kids with their computers and sums and whatnot, and now he's battling for Britain, would appeal to the least sophisticated cohort of investors. Even if marginal growth is curtailed this is sufficient to derate as even at the current share price it is priced for perfection. There is absolutely no reason it should not trade down to where it was earlier in the year.

[a1samu] 05/6/2019 10:15

Daily Nail today is calling for compensation for investors from HL for miss-selling! Read article by Victoria Bischoff @dailymail.co.uk

[greatballsoffire451] 05/6/2019 10:05

huge director sells last week

most wise

[growthpotential] 05/6/2019 10:05

I would challenge that view in that HL is a platform and there's little damage that can arise from this. Investors are fully aware of the risks of funds and as such it's most likely going to be remembered as a bad fund rather than a platform error

[wantage] 05/6/2019 10:04

Excellent looks like exodus has begun.glad I shorted yesterday as can't get a borrow on Woodford.

[a1samu] 05/6/2019 09:45

5.6.19 Deutsche recommends sell to £15

[saltaire111] 05/6/2019 08:35

Hpcg - excellent call with yesterday’s post.

Salty