Hargreaves Lansdown Financial Advisors

Chris75

A friend who lives 200 miles away has approached me regarding help with an very high value portfolio of 30+ shares/unit trusts/investment trusts that they have inherited. They have no income and no cash money other than these investments which are all equities - all the cash went to pay inheritance tax. They contacted me initially to ask which shares to sell to pay this months bills & I expect the same would happen next month etc! They know absolutely nothing about shares/trusts nor really about money in general. I have had a quick look and I am sure that the whole thing needs sorting out but the owner isn't sure what they want, what is possible etc. They are with Hargreaves Lansdown who they trust because that is where the money has always been and they a dubious of other independent financial advisors as charlatons. They have begged me to sort this out for them but I cannot accept the responsibility. They want to pay me but I have explained that not only is this illegal but payment isn't the problem.


Obviously none of the funds are held in an ISA and they have ethical issues about what their funds are investing in.

I want to suggest that they consider using Hargreaves Lansdown Independent Advisors to manage their portfolio. I know that there are cheaper alternatives but trust is an issue here. They want to keep shares because they see that as the way to make their lifetime asset grow although I think that they should be looking to hold assets other than shares as well and that they need some cash/income.


Does anyone have experience of HL financial advise/portfolio management in a situation where they would help ascertain objectives and attitude to risk/volatility etc, and have effectively total responsibility for managing the portfolio, securing some income etc.

AlanP_2

I appreciate their point of view as regards "trust" in HL but if it was me I would prefer a local independent advisor that I could meet with face-face when I needed to.

unbiased.co.uk can provide a local list.

It may be worth pointing out to them that the adviser advises, they don't hold the assets themselves.

The more their assets are diversified the better and a number of specific stocks may not be the best option for them.

Also, if they are looking for income, which it sounds as if they are if selling to meet monthly bills, then the those they have inherited may not suit their needs (the portfolio was built by someone else who had their own specific needs).

You trying to do it from 200 miles away sounds like a recipe for a falling out with your friends so I would try and steer clear of that idea as you appear to be trying to do.

Could you go with them to meet a couple of local advisers and help them think through the options?

Is there any immediate family local to them who could lend a hand?

Chris75

AlanP


Thank you for the reply. As you can imagine this is a bit of a worry.


No there is no other family that could help. The person who died told the recipient that if they ever needed money issues resolving to talk to me. I knew nothing about this.


Thanks for the link for the advisors but HL suggest that they have a network of local advisors and it was this that I had imagined using.


http://www.hl.co.uk/advice/who-will-i-be-dealing-with


They asked what would happen if the FA went bust & I explained that all holdings would he held securely in their name and thus protected.


I totally agree about more diversification and that the funds that they have inherited are not suitable for their needs.


I may need to visit them to talk with the FA but I need to set it all up first. The value involved means that there is no problem of meeting minimum FA criteria for home visits etc.

dunstonh

Thanks for the link for the advisors but HL suggest that they have a network of local advisors and it was this that I had imagined using.

Small local firms that have been around a long time tend to have a low turnover of staff and you get to see the same people for 10-20-30-40 years. Regional/National firms tend to have a high turnover of staff and you rarely see the same person over the years. Having to explain everything again and again can become frustrating.

hey asked what would happen if the FA went bust & I explained that all holdings would he held securely in their name and thus protected.

Unlike HL which sell their own product, most IFAs will not have their own product range and will use product providers who have no direct link to that IFA. So, if the IFA closed, the investments would not be affected one bit.

jimjames

Not sure why you think it would be illegal to help them but fully understand not wanting to have that level of responsibility.

HL charge a flat fee of 1% as I understand it. Depending what you define as a very large portfolio that could be a substantial amount and an IFA working on fixed fee may be cheaper.

If they are happy with HL then that would seem to be a logical place to go, using others might mean you get caught in crossfire of any problems.

Chris75

jimjames wrote: »

NOt sure why you think it would be illegal to help them but fully understand having that level of responsibility............

It isn't illegal to help but they offered to pay. My professional body would not approve of me giving financial advice (rewarded or free) either.


I agree fee based would be better for a portfolio of this size.


From 200 miles away and with no local knowledge, nor anyone to ask, how would you shortlist IFA's?

gadgetmind

Chris75 wrote: »

They have no income

Well, that the first thing to tackle!

They contacted me initially to ask which shares to sell to pay this months bills

You don't pay routine bills out of capital but from income. Unless these capital assets can generate enough income themselves, your friend will also have seriously consider generating some earned income. Of course, if they are elderly, then they *can* slowly deplete the capital, but I don't get the feeling that this applies here.

Chris75

gadgetmind wrote: »

Well, that the first thing to tackle!



You don't pay routine bills out of capital but from income. Unless these capital assets can generate enough income themselves, your friend will also have seriously consider generating some earned income. Of course, if they are elderly, then they *can* slowly deplete the capital, but I don't get the feeling that this applies here.

I agree sorting out some income is a very high priority. Long term is an issue here.

Hargreaves_Lansdown_representative

Unlike HL which sell their own product, most IFAs will not have their own product range and will use product providers who have no direct link to that IFA. So, if the IFA closed, the investments would not be affected one bit.[/QUOTE]

You are incorrect. Hargreaves Lansdown Financial Advisers are independent (IFAs) and use 3rd party products from providers where there is no direct link, as well as own products.

Chris75

How would HL calculate their total fees on a mixed portfolio with management responsibilities.


Is there a list of their local Hargreaves Lansdown IFA's?

TakeCareOfThePennies_2

dunstonh wrote: »

Regional/National firms tend to have a high turnover of staff and you rarely see the same person over the years.

Just to inject some balance into the bashing.....

There are some very good regional/national firms out there, with low staff turnover and who genuinely care about working with their customers and providing sound advice and portfolio management.

Few and far between perhaps, but they are out there if you look hard enough, infact since many here are into the fund game, you might not necessarily need to look that hard in certain cases if you know who's who in the fund manager world.

If Chris75 is really talking about a high-value portfolio (i.e. denominated in millions) then he would certainly be better off seeking out one of the rare breed of decent regional/national firms who have regular and substantial experience in dealing with portfolios of such sizes.