Hagreaves Lansdown - Poor Independent Advice and Asset Management

blinko

PatrickGrant wrote: »

Badger
You might want to think about using Bestinvest. I have asked Bestinvest to come up with suggestions for a small commission and that has woked quite well, unlike HL.
I thnink your parents did the right thing by withdrawing form HL Dscretionary funds. I would also suggest your parents ask HL for compensation on the basis that the Discretionary Funds levy charges higher than the fund can support. HL must know that this set of arrangements is not viable and it works out HL get £2 for every £1 your parents get. In my case, the notional loss of falling short of the benchmark is about £5K and worth asking for. I honestly think HL is mis-selling and I may ask the FSA to look at the issue further. I don't mind paying charges providing I get value for money. HL has not proved to be value for money at all. All it has been is a nice little earner for HL.

buddy im aware you are unhappy with your return andall that , but really and truly it is upto you to do your own research,

i didnt do mine and traded with HL and it cost me £20 for 2k investment in GCM when with iii it costs £10 and whose fault is that mine for not shopping around or HL for being expensive on share dealing ?


if you feel you have a case you should take it to the FSA and im sure that they will give you the answers your looking for,

but i dont thinkt hat you are going to get them on here

BadgerIOW

The HL MM Inc Growth Fund is a 'fund of funds', a selection of other funds in the UK equity income sector so pretty much mirrors the sector average for performance, same goes for the Strategic Bond fund.
The issue we had was not one of performance of those funds but more that the bulk of the portfolio was invested in just them and lacked diversification. Perhaps naively I thought a discretionary management service would encompass a number of other types of investment as Dunstonh pointed out. I wouldn't say HL mis sold anything, after all the funds made money for my parents, its just that with how they structured the portfolio I felt I could have done the same job without an annual charge for it! If HL are guilty of anything its maybe taking money for old rope, but I'm not a professional and the funds they invested in could reflect the risk profile my parents gave them.

jamesd

PatrickGrant wrote: »

You might want to think about using Bestinvest. I have asked Bestinvest to come up with suggestions for a small commission and that has woked quite well, unlike HL.

You are comparing investments made in 2006 with HL to investments made in 2009 via BestInvest. Most of the difference there was from the timing of the investments, not the investment selection. Just buying a UK a stock market tracker in early 2009 would have made over 40%.

You don't seem to have been served very well by the guidance given by HL's DIM service, though.

PatrickGrant

dunstonh wrote: »

Was it advice or was it a choice of options?
- Did the IFA factfind you, then provide a written report recommending their DIM service and the pros and cons of this or did the IFA just say you may be better off using their DIM service (no report = no advice)

These are the facts:
1. I wrote to HL asking for independent advice and asking if it was independent. The answer was "Yes, of course".
2. The IFA (so called) drove from Bristol to London to meet me....at all points stating they were an IFA.
3. The IFA then produced a report with this "recommendation". The report does not state explicitly whether it is independent financial advice or not.....(I am still waiting to hear from HL if this constitutes independent advice..or not...)
4. From my point of view, I demonstrably asked for independent advice ...and paid for it by way of a 3% commission....I reckon that potentially forms a binding contract - unless HL can point to anything to say some other agreement took place....

PatrickGrant

dunstonh wrote: »

As has been said, an IFA did not recommend the funds. The discretionary investment manager did. Its a different type of service.

Best invest is an IFA service, not a discretionary investment management service (at least what you are using). They are just doing what most other IFAs would be doing. No problem with that at all but you do need to be aware that a DIM service and an IFA service are two different things.

I am aware the IFA advice and the Investment Fund picking are two different things.
I am trying to figure out whether the HL IFA might reasonably have some idea what HL Discretionary services invested in...(for example HL funds investing in other funds and cranking the costs up which HL receive.) I think they must have reasonably realised this...unless they wish to state they do not know what happens in their own company....
The investment picking is a bit of a sham. Investing 90% in two HL funds is a big risk in itself (if anything went wrong at HL). But I think there is more to this than meets the eye. Not only does this set of arrangements increase charges and costs which are not sustainablefor an Active Managed Fund - but the timing of new investments is curious. For example, why invest in Blackrock Alpha after a market has dropped? Why move into mainly equity after the market has picked up? These tow points reflect poorly on the fund manager whom the IFA claimed to be in contact with.....
I think the "independent advice" falls short of reasonable and so do the investment choices....that is why this Discretionary Fund fell short of its benchmark. The poor perfomance was not evident on charts - but it would have been very evident if numbers had been used to report instead.

PatrickGrant

dunstonh wrote: »

A discretionary investment manager using unit trusts is just adding another layer of charges.

HLy have added 2 layers of charges...first the Discretionary Portfolio Management charges (fine). Second for the DiscretionaryFund Managers invest primarily in HL funds investing in other funds is yet another layer of charges....so I stand by the statement £2 for HL for every £1 the customer gets... (Is that greed or sharing the growth????)

So the IFA recommended an investment with 2 unnecessary layers of cost that judging by performance against the benchmark are not delivering value for money...

PatrickGrant

jamesd wrote: »

You are comparing investments made in 2006 with HL to investments made in 2009 via BestInvest.

You don't seem to have been served very well by the guidance given by HL's DIM service, though.

Not quite !!! Both sets of investments were kicked off in 2006.

HL was not sold until recently when it became evident they were going nowhere. (i.e. 1.1% pa - building society could do better.)

The Bestinvest ones were more controlled by me. So I acted on the Bestinvest recommendations in 2006. Seeing the way the wind was blowing in 2007/08 I did the right thing, I sold the risky ones...(e.g. Smaller Cos, SE Asia, Emerging Markets) in 2007/08 then bought back in again mid 2009, agian n Bestinvest advice.

Perhaps I should be the HL fund manager???

Interestingly, classical economics suggests in time of markets plunging revert to cah, gold etc which is what I did? What do fund managers do? Hang on to unsustainable investment strategies????

PatrickGrant

blinko wrote: »

buddy im aware you are unhappy with your return andall that , but really and truly it is upto you to do your own research,

That is what the IFA is supposed to be paid for... so I should not need to do the research until it becomes obvious the IFA's recommendation was poor....

dunstonh

That is what the IFA is supposed to be paid for... so I should not need to do the research until it becomes obvious the IFA's recommendation was poor....

The IFA did not recommend the investments. The IFA recommended you use a DIM. You agreed to that and its the DIM that recommended the investments. As you know from the comments already, I don't think anyone disagrees with you about the service you got from them. Your complaint is against the DIM not the IFA. It's the DIM side that let you down.

I lot of your questions can really only be answered by HL. Have you asked them to answer these?

Interestingly, classical economics suggests in time of markets plunging revert to cah, gold etc which is what I did? What do fund managers do? Hang on to unsustainable investment strategies????

A fund manager has to remain within the remit of the fund. So, a Japanese equity fund has to remain invested in Japanese equity even if its the worst place to be.

blinko

PatrickGrant wrote: »

That is what the IFA is supposed to be paid for... so I should not need to do the research until it becomes obvious the IFA's recommendation was poor....

either way i think you best bet is to take this up with the FSA i dont see what you are hoping to achieve on here