Woodford > LF Equity Income Fund > Class actions

BananaRepublic

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

[Deleted User]

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

Buyer beware is a hard nosed rebuff to the many (1/4 million I believe) Hargreaves Lansdown customers who invested or found themselves invested in Woodford funds. And a very unfair one, imo. 
First consideration for the majority of people starting an investment journey is finding a reputable platform, hence the popularity of Hargreaves Lansdown. Hargreaves Lansdown not only gave Woodford funds a platform up to the day they were suspended, Hargreaves Lansdown also promoted a bunch of funds with a weighting in Woodford. For those funds, getting ramped by Hargreaves Lansdown was like getting on the first page of a Google search, so I doubt Hargreaves Lansdown even had to coerce them to include some "dirty Woodford" below the line.
And there is no doubt that Hargreaves Lansdown had a vested interest in promoting Woodford funds.

masonic

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

HL states that it receives no commission in exchange for places on its marketing list. So it seems reasonable for a complainant to rely on that statement. HL was receiving access to a special unit class in exchange for promoting the funds and that was plain to see. What's interesting is that, to date, no FOS decisions have been published relating to customers being enticed to invest, so either no such compaints have yet worked their way through the system, or all such complaints have been settled by HL or by the FOS at adjudicator level.

[Deleted User]

masonic said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

HL states that it receives no commission in exchange for places on its marketing list. 

Which is not to say that Hargreaves Lansdown have no vested interest in the places on its marketing list. 
Of the 1/4 million HL investors affected by Woodford's demise, many or most would have had no foreknowledge of their investment - it was an bad element down in the mix below the sightline.

masonic

ZingPowZing said:

masonic said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

HL states that it receives no commission in exchange for places on its marketing list. 

Which is not to say that Hargreaves Lansdown have no vested interest in the places on its marketing list.

As I wrote, "HL was receiving access to a special unit class in exchange for promoting the funds and that was plain to see." That special unit class helped them remain somewhat attractive in spite of their high platform charges. In fact, access to cheaper unit classes has been cited on here as the reason people hadn't left HL for a cheaper alternative.

ZingPowZing said:

Of the 1/4 million HL investors affected by Woodford's demise, many or most would have had no foreknowledge of their investment - it was an bad element down in the mix below the sightline.

Do you have statistics regarding how many HL investors invested direct in Woodford vs via multi-manger funds? It would be worrying indeed if most were invested through the latter, since they are an unattractive option with or without the inclusion of Woodford funds. Though I think it was a top 10 holding of those MM funds, not something below the sightline.

[Deleted User]

masonic said:

ZingPowZing said:

masonic said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

HL states that it receives no commission in exchange for places on its marketing list. 

Which is not to say that Hargreaves Lansdown have no vested interest in the places on its marketing list.

As I wrote, "HL was receiving access to a special unit class in exchange for promoting the funds and that was plain to see." That special unit class helped them remain somewhat attractive in spite of their high platform charges. In fact, access to cheaper unit classes has been cited on here as the reason people hadn't left HL for a cheaper alternative.

ZingPowZing said:

Of the 1/4 million HL investors affected by Woodford's demise, many or most would have had no foreknowledge of their investment - it was an bad element down in the mix below the sightline.

Do you have statistics regarding how many HL investors invested direct in Woodford vs via multi-manger funds? It would be worrying indeed if most were invested through the latter, since they are an unattractive option with or without the inclusion of Woodford funds. Though I think it was a top 10 holding of those MM funds, not something below the sightline.

I'm afraid not, masonic. The overall correlation between Hargreaves Lansdown and Woodford is available on anyone who includes citywire in the google search.
For example:

"No rival comes close to the astonishing scale of support Hargreaves Lansdown has delivered to Neil Woodford and now more than ever, the under-fire fund manager needs to retain its loyalty.

Funds Insider can reveal the size of Hargreaves Lansdown’s investments in Woodford’s funds for the first time, showing the UK’s largest online stockbroker was responsible for generating more than a third of the inflows.

The Bristol-based behemoth’s imposing marketing machine whirred into action at the launch of all three of Woodford’s funds: first his flagship Equity Income fund, then his Patient Capital (WPCT) investment trust, and a third push in 2017 for his Income Focus fund.

In 2015, the first full calendar year for Woodford Equity Income, Hargreaves Lansdown clients owned a whopping 38%, or £3.1 billion, of the fund. By 2016, that had risen to £3.4 billion, even though their relative stake in the fund had dipped to 36%, after a strong early run of performance for Woodford." 08/03/19

BananaRepublic

ZingPowZing said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

Buyer beware is a hard nosed rebuff to the many (1/4 million I believe) Hargreaves Lansdown customers who invested or found themselves invested in Woodford funds. And a very unfair one, imo. 
First consideration for the majority of people starting an investment journey is finding a reputable platform, hence the popularity of Hargreaves Lansdown. Hargreaves Lansdown not only gave Woodford funds a platform up to the day they were suspended, Hargreaves Lansdown also promoted a bunch of funds with a weighting in Woodford. For those funds, getting ramped by Hargreaves Lansdown was like getting on the first page of a Google search, so I doubt Hargreaves Lansdown even had to coerce them to include some "dirty Woodford" below the line.
And there is no doubt that Hargreaves Lansdown had a vested interest in promoting Woodford funds.

Harsh perhaps, but realistic. If it can be shown that HL behaved in an illegal fashion, such as not following financial regulations, then fair enough. In that case they should pay the consequences. Otherwise people shoukd accept the consequences of their actions, and their choice to opt for DIY investing. 

[Deleted User]

BananaRepublic said:

ZingPowZing said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

Buyer beware is a hard nosed rebuff to the many (1/4 million I believe) Hargreaves Lansdown customers who invested or found themselves invested in Woodford funds. And a very unfair one, imo. 
First consideration for the majority of people starting an investment journey is finding a reputable platform, hence the popularity of Hargreaves Lansdown. Hargreaves Lansdown not only gave Woodford funds a platform up to the day they were suspended, Hargreaves Lansdown also promoted a bunch of funds with a weighting in Woodford. For those funds, getting ramped by Hargreaves Lansdown was like getting on the first page of a Google search, so I doubt Hargreaves Lansdown even had to coerce them to include some "dirty Woodford" below the line.
And there is no doubt that Hargreaves Lansdown had a vested interest in promoting Woodford funds.

Harsh perhaps, but realistic. If it can be shown that HL behaved in an illegal fashion, such as not following financial regulations, then fair enough. In that case they should pay the consequences. Otherwise people shoukd accept the consequences of their actions, and their choice to opt for DIY investing. 

Disagree. Even if what  Hargreaves Lansdown did was not illegal, it is not "fair enough." 
Their cachet relies on reputation. 

Sterlingtimes

Leigh Day, at this stage, is targetting Link rather than H&L.

BananaRepublic

ZingPowZing said:

BananaRepublic said:

ZingPowZing said:

BananaRepublic said:

I can’t help thinking this is a case of caveat emptor. If a platform pushes a fund, my first thought is that they get kick backs. It sounds like people blindly accepted the marketing get rich quick spiel. I don’t think Neil Woodford was dishonest, or crooked or manipulative. I think he believed in what he was doing and got it wrong. He had a good track record of contrarian investing which helped market his funds. Isn’t it obvious that HL recommend funds simply because they get commission? Failure to see that indicates a fundamental lack of common sense, does it not? 

Buyer beware is a hard nosed rebuff to the many (1/4 million I believe) Hargreaves Lansdown customers who invested or found themselves invested in Woodford funds. And a very unfair one, imo. 
First consideration for the majority of people starting an investment journey is finding a reputable platform, hence the popularity of Hargreaves Lansdown. Hargreaves Lansdown not only gave Woodford funds a platform up to the day they were suspended, Hargreaves Lansdown also promoted a bunch of funds with a weighting in Woodford. For those funds, getting ramped by Hargreaves Lansdown was like getting on the first page of a Google search, so I doubt Hargreaves Lansdown even had to coerce them to include some "dirty Woodford" below the line.
And there is no doubt that Hargreaves Lansdown had a vested interest in promoting Woodford funds.

Harsh perhaps, but realistic. If it can be shown that HL behaved in an illegal fashion, such as not following financial regulations, then fair enough. In that case they should pay the consequences. Otherwise people shoukd accept the consequences of their actions, and their choice to opt for DIY investing. 

Disagree. Even if what  Hargreaves Lansdown did was not illegal, it is not "fair enough." 
Their cachet relies on reputation. 

If it was not illegal, and did not violate financial regulations under which they operate, then there is no basis for a class action. So, tough cheese. Of course their reputation could be trashed, or at least damaged. The value of investments may go up, as well as plummet precipitously. This wasn’t the Rupert Bear Junior Investment Club.

I’m sure HL will thrive, unless of course criminal acts were committed. The financial services industry is not a side arm of the Vatican.