Woodford Concerns

Sailtheworld

talexuser wrote: »

Slater & Gordon is "looking into" the merits of a class action against Hargreaves Lansdown for the 291,000 investors who went through HL with their Wealth List.

Presumably the argument is that the 'Wealth List' represents advice and/ or a recommendation.

It's probably doomed to failure. It's simple to prove the Wealth List didn't constitute advice because no invoices were generated for such advice. It's simple to prove it wasn't a recommendation because, before buying, all investors ticked the box to acknowledge funds on the Wealth List shouldn't be construed as recommendations or advice.

I suppose they could argue that there's an element of negligence in Woodford even appearing on the list or the list purported to be advice or a recommendation.

All a bit of a long shot but then investor loses money and looks for compensation cases usually are.

Skibunny40

Sailtheworld wrote: »

Presumably the argument is that the 'Wealth List' represents advice and/ or a recommendation.

It's probably doomed to failure. It's simple to prove the Wealth List didn't constitute advice because no invoices were generated for such advice. It's simple to prove it wasn't a recommendation because, before buying, all investors ticked the box to acknowledge funds on the Wealth List shouldn't be construed as recommendations or advice.

I suppose they could argue that there's an element of negligence in Woodford even appearing on the list or the list purported to be advice or a recommendation.

All a bit of a long shot but then investor loses money and looks for compensation cases usually are.

I agree, but I'd be curious to see exactly what HL says the point of the lists were, if not recommendations or advice. What did they hope to achieve for their clients by producing the list?

Thrugelmir

Skibunny40 wrote: »

I agree, but I'd be curious to see exactly what HL says the point of the lists were, if not recommendations or advice. What did they hope to achieve for their clients by producing the list?

Narrowing down the options available from the thousands of choices in the marketplace.

Investors themselves brought the Woodford Empire down.

seacaitch

Skibunny40 wrote: »

I agree, but I'd be curious to see exactly what HL says the point of the lists were, if not recommendations or advice. What did they hope to achieve for their clients by producing the list?

The lists are marketing material designed to attract new customers - people with no/little investing experience - to the HL platform.

It's very clever, because although it isn't investment advice it's often interpreted by novice potential customers as offering some guidelines as to where to stick their money, helping them overcome the big hurdle that new potential investors face in not knowing how or where to begin or who to trust.

If you can snag investment customers at the outset, you can often keep them for years/decades, such that the relationship becomes very profitable, hence HL's success, where customers happily pay advised-like fees for non-advised service.

But, if it turns out a lot of customers feel their trust has been abused, HL will have a big problem that could tarnish its reputation with both existing customers and worse still future potential customers, impacting growth.

I don't know what will happen. It could all blow over in time, and back to the races for HL, or it might prove a major turning point. We'll find out in good time.

eskbanker

Skibunny40 wrote: »

I agree, but I'd be curious to see exactly what HL says the point of the lists were, if not recommendations or advice. What did they hope to achieve for their clients by producing the list?

If you're curious, why not visit https://www.hl.co.uk/funds/help-choosing-funds/wealth-50?

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talexuser

Some interesting HL statistics here:

https://www.yodelar.com/insights/the-scary-trust-of-the-neil-woodford-hargreaves-lansdown-saga?utm_source=hs_email&utm_medium=email&utm_content=78842945&_hsenc=p2ANqtz-_61qOHm7wnywewlMahwxv5q_oJaeeYlXsxoNk5u-X2NXJYvnnUOpWLLsvnpSpITVF-pIW9ZpVOm0bh84xdacy3Enqehw&_hsmi=78842945

talexuser

Article by Richard Evans in the borisgraph today.

Quote:
Neil Woodford “wrote multimillion-pound cheques with no due diligence” and “went a bit mad” when the initial success of his new firm “went to his head”, according to City observers.

After Woodford Investment Management opened for business in 2014, its funds attracted billions of pounds in a short space of time. The manager was forced to invest this money quickly to avoid it sitting unproductively in cash but his new firm lacked the resources to research certain stocks effectively, rivals allege.

“He had all that money to deploy, first for his Equity Income fund and then for his biotech and technology investment trust [ Woodford Patient Capital],” said one. “But buying that kind of stuff isn’t easy – you can’t just throw money at a wall. You need to employ the right scientists but there was no due diligence, even when they were writing huge cheques.”

Another experienced City figure backed up this assessment. “There was no real experience or talent among the other staff, just a few inexperienced analysts,” said the source, who had direct knowledge of Mr Woodford’s business in its early days. “These people lacked the stature to push back at Mr Woodford’s decisions.”

Several of the people Telegraph Money spoke to, who are all experienced money managers, said Mr Woodford’s “lack of humility” made this point all the more important.

“These guys all have big egos,” one said. “He probably had an evangelical belief in what he was doing.”

A second said: “There was hubris here in ignoring adages such as the fact that the market can remain irrational longer than you can remain solvent.” Another said: “I think he wanted a knighthood. He wanted to retire after making Oxford [where his company is based] Britain’s Silicon Valley. It was hubris – I think his intentions were good.”

A fourth added: “When you start your own business you need humility if you are going to avoid mistakes. But his actions do not suggest humility. He held very large stakes in some companies, indicating very high levels of conviction.”

Several of these big bets, such as Provident Financial and Allied Minds, did not come off. Mr Woodford held 21.6pc of Allied Minds and 14.9pc of Provident Financial in his Equity Income fund; the fund also owned more than a fifth of the shares of several other companies.

“The red flag was the size of these stakes,” one source said. “It shows overconfidence. When there is this concentration of ownership you can’t liquidate your holding and you effectively own the whole company.”

Several rivals said Mr Woodford’s undoing was refusing to cut his losses when holdings got into difficulty and instead increasing his stakes. “I think the early success went to his head and he went a bit mad – he started to believe his own hype,” one said. “When it went wrong he panicked and doubled down – he gambled.”

Another agreed. “Some investors want to be proved right and others want to make money,” he said. “The latter sell when a stock falls, which is normally sound risk management. The ones who want to be right will double down – but doubling down is not risk management.”

[Deleted User]

Compo!!!!

It's wonderful to see The Daily Mail and Daily Telegraph campaigning on behalf of their readers.

talexuser

ZingPowZing wrote: »

It's wonderful to see The Daily Mail and Daily Telegraph campaigning on behalf of their readers.

After consistently puffing Woodford to their readers too! :rotfl:

jamei305

Cold fusion delivering more share price news for WPCT holders today:


"Link Fund Solutions Ltd cut the value of the stake in IH Holdings International held by Woodford Patient Capital amid a 'delay in operational progress' at the nuclear energy firm. This has resulted in the trust's NAV being cut by 5.0 pence per share."


But never mind, it's only a delay to operational progress - I'm sure their operations will really get going in the next quarter.:rotfl: