Hargreaves Lansdown transfer obstructions

I don't have direct experience of a HL AML request, but regulated financial services businesses are required by law to carry out the identity checks they feel necessary to document the customers using their own procedures and and risk-based approach (which each business must implement as it sees fit to avoid falling foul of the law).

It might not be mentioned for outgoing managers in a government ISA manager's guide because it is assumed to have already been done at time of account opening, and the fact it is an ISA account doesn't change their basic duties compared to any other account they offer anyway.

As your wife is leaving, there is not a cat in hell's chance she would send them whatever documentation they request after she is no longer a customer and they have no practical leverage on her to make her comply. So unfortunately they will see this as the last chance saloon to collect her information properly before they allow her to leave. And clearly giving her "clean" investment proceeds to walk away with, without properly identifying her, is bad form in the world of AML. So she'll probably just have to suck it up, although she should complain that these things weren't requested in the last two years (if they genuinely weren't and now it is delaying her move).

As an aside, crying "but you never asked for these documents for my husband" is not a particularly good way to get them to drop a burdensome request. If anything, that is only going to encourage them to want to check him out too - it is not going to make a compliance officer decide that he is going to forget he ever asked her for her docs. The compliance guy doesn't want to write on his anti terrorism files, "She didn't want to provide any documents to prove she was who she said she was, so we let her off and paid her out anyway".


However, for your other complaint, the "on your transfer form, you included the leading zeroes in your customer account number that we always show on your statement, so we couldn't identify your account number and consider your request invalid, please start again" is a completely ludicrous response and i would complain heartily about that.

TonyWarwick wrote: »

Thanks bowlhead99. I'm sure your comments are correct in relation to opening an account, but HL are not saying that AML information is missing or outstanding from their obligations in relation to holding my wife's account.

Effectively, they are really. They're saying she's not been documented well enough, in terms of the documents they want/need to have on file in relation to her account; so she needs to be documented properly

they are saying that they are obliged to carry out AML proving AGAIN on receiving a transfer request. This is not a longstanding 'missing' piece of info, it's a fresh requirement and I can find no evidence of a statutory basis for it.

The basis is that she's not been documented well enough, and needs to be. Perhaps they forgot to ask when she joined so there's nothing on file, or something went missing (annoying but feasible with a massive client base) or they only got some basic info which they didn't get around to following up properly but now realise their records are inadequate.

I get that a cynic might find the timing suspicious but it can be the case that trying to wrap up a customer file can be a trigger to remediate the missing documentation, even if you have had no reason to even open the customer master file for the last year or two.

If it was one of the financial services businesses that had the multi million pound fines for having slack anti money laundering processes in recent years, they might say, "sod it, she's leaving anyway, i cant be bothered". However, better institutions will follow these things up, even though it doesn't feel like they are "better" in terms of your wife's customer experience.

It may be HL's policy to seek this info again, but is it a requirement or an obligation? if the former, then I must accept it, but cannot help suspecting that it is, at least in part, a contrived delay.

It isn't a requirement to "seek it again on exit" if they already have it. But if they never got it in the first place, or only partially got it (including, for example, for the reason that they simply didn't get round to asking for it in the first place due to some internal error or issue), they should ask for it, rather than letting her walk off with tens of thousands of pounds of clean assets.

Still, say they are getting £10-15 a week in admin fees from her because she has £115k-175k of open ended funds in her ISA. Running round trying to fix documentation errors is the sort of thing that can easily burn through more than £20 of their time and effort so they are probably not doing it just for fun.

In any event, HL's statement to II was untrue in that my wife had never 'failed to pass' an AML check, and she had received no request at that point.

It sounds like it's factual that she had not "passed the AML check". Perhaps the reason she had not passed their check was because of your wife having never even previously received the request for AML /identity information in the time she'd been a customer. Still, that wouldn't make it a lie for them to tell the transferee manager that they couldn't release the assets pending completion of a check.

Just so you don't shoot the messenger, I'm not an HL worker or owner, or even customer (my parents have accounts with them but I don't). The comments are just to help you try to make sense of it all and I agree it's not great service of course.