Woodford > LF Equity Income Fund > Class actions

Moe_The_Bartender

You’re missing the point that Hargreaves has been nothing more than a shareholder in HL all the while the Woodford affair has been going on. A major one perhaps but other people were running the business. If the finger should be pointed at anyone in HL, it’s the idiot Mark Dampier. 

That is why there is no comparison to be made.

[Deleted User]

Moe_The_Bartender said:

You’re missing the point that Hargreaves has been nothing more than a shareholder in HL all the while the Woodford affair has been going on. A major one perhaps but other people were running the business. If the finger should be pointed at anyone in HL, it’s the idiot Mark Dampier. 

That is why there is no comparison to be made.

We are going to have to differ on that point, Moe. 
Peter Hargreaves is the co-founder of Hargreaves Lansdown, he is 32% owner of the firm, compared to, say, Mark Zuckerberg owning 7% of Facebook. His name is half the brand. So, if people want to contrast his fortunes through the Woodford fiasco with those who lost money through the HL platform, rather than a fall guy, you're going to struggle to stop them. 

bowlhead99

ZingPowZing said:

Moe_The_Bartender said:

ZingPowZing said:

coyrls said:

ZingPowZing said:

Hargreaves Lansdown had a vested interest in any customer buying a Woodford fund rather than selling it, particularly after it started to go wrong, because they had a huge stake in Woodford that would have been increasing as a % even as the stable assets became disposals to meet demand from sellers. A vicious circle damaging to the interest of HL itself. 

“The problem was Hargreaves Lansdown had too much with him” said Mr Hargreaves, referring to Neil Woodford.

“The clients have been stuffed in this horrible Woodford fund. I’ve drawn this big dividend. Nothing to do with me and I’ve been very successful. What do they want me to do? Give the dividend back to the unit holders?” said Mr Hargreaves in defence of the £64 million dividend he received from the company that he is entitled to as he is a 32% shareholder.

Interesting to note from bowlhead's figures that, although many individual Hargreaves Lansdown clients held a relatively modest investment in Woodford, the dividend drawn by Mr Hargreaves was equivalent to £200 from each of them.

Are you under the impression that Mr Hargreaves drew his big dividend from Woodford in some way?  He did not, the dividend was from his shares in Hargreaves Lansdown.

No, I'm drawing a comparison between Hargreaves Lansdown's dividend to Peter Hargreaves and HL clients' exposure to losses through Woodford funds for which HL were the overwhelmingly dominant broker.

There is no comparison to be made. Bowlhead explained why.

Plus, it is not altogether for you and Bowlhead to decide whether Hargreaves Lansdown have a case to answer. 

True, it is perhaps just up to us to call out the the strange framing of 'part-owner of largest stockbroker firm takes dividend income out of the company profits' as 'he took an amount of profit equivalent to £200 for each Woodford-invested shareholder'  - a comparison not of apples to apples, bur perhaps apples and lemons, or toads and grandmothers - not something from which a meaningful conclusion can be drawn, and only used to paint the founder of the business as a bad guy and each execution-only investor as being badly treated.

Their relationship with Woodford funds has been framed this way:
[by a partner in a law firm looking for free publicity in a funds journal]
"“The concerning levels of unlisted assets within Woodford Equity Income had been apparent for some time and the impact upon liquidity was entirely foreseeable – certain brokers had taken action but Hargreaves Lansdown had not,”

For the ~130k HL clients who chose to hold the fund direct, using HL's execution-only 'broker' service (really, fund intermediary), HL had no authority to take action and withdraw the clients' money from the fund.  People used the service to hold assets that they choose themselves. It is the largest direct-to-consumer platform in the country, where consumers pick their own investments and are responsible for their own investment decisions and related due diligence.

Perhaps a small number of advisory clients also held the fund as part of an advised portfolio - the quantity of those, if any, has not been reported. No doubt those individuals will go to HL with a complaint and then the FOS, and ultimately perhaps some ambulance chasers and see what case can be made to get recompense. However, the ambulance chasers are trying to drum up some interest in "give me your case and we'll try to get you some free money" from the much larger quantity of those who did not buy advice - on the basis that there were more of those types of customers. The lawyers hope to show that there is a case to answer from HL anyway, due to HL helping to advertise the Woodford fund, and will try whatever they think might stick.  As noted earlier, it is only likely to be reputational fallout for HL rather than a payout -  as to offer any kind of payout to non-advised clients for suggesting they might like to consider investing in a particular fund, would open up a can of worms.

[Deleted User]

Treat it as an exercise in perspective, bowlhead. As when some tiny looking figures pose in front of the Great Pyramid.
It is easy for big numbers to lose their meaning; for some affected Hargreaves Lansdown customers, the comparison may help put themselves in scale, though it certainly won't translate to xxx compensation on that basis. 

I do have a question though, for anyone who was in at or the launch of Woodford funds in June '14, or soon after: Notwithstanding Neil Woodward's track record, did you not have a list of investments into which you would be adding? I cannot imagine private investors committing on the prospectus of a fund without visible assets , therefore my assumption is that institutional investors (principally Hargreaves Lansdown) had already provided Woodward the means to scale the fund rapidly. In other words, HL made a significant initial investment  then sold it on to their clients. Or did it happen another way?

Here's a message from 2014 for any Hargreaves Lansdown client who was there at the time:
 

https://twitter.com/RobinJPowell/status/1185825118515281922/photo/1

talexuser

I'm sympathetic to your cause Zing, but I think you are pushing it a bit far. I sold half of Perpetual High Income and put it into Woodford soon after launch (waiting for it to go down to 99p!) because he had made me a bomb over 20 plus years at Perpetual. So at the time Hargreaves made that claim it was very true. Over three years I made ~30% in Woodford, so no complaints at all. He went from 40% down to 30% and that rang the alarm for me compared to other funds, looking at the holdings I did not understand and other brokers giving warnings, so I sold. Funnily enough High Income under Barnett was going nowhere so that was sold as well, probably earlier. At that time no one had any kind of idea the fund would end up where it did, that became about only in the last months before closedown when a council wanted millions cashed in.
The only case against HL is just ramping it till the last minute on their list, when now saying they were in private discussions about performace. That just does not look like effective impartial dealing. (I had nothing to do with HL)

[Deleted User]

Fair enough, talexuser. I can see why investors wanted to follow him in 2014, just wondered how the Woodford fund was presented at launch.

BananaRepublic

ZingPowZing said:

coyrls said:

ZingPowZing said:

Hargreaves Lansdown had a vested interest in any customer buying a Woodford fund rather than selling it, particularly after it started to go wrong, because they had a huge stake in Woodford that would have been increasing as a % even as the stable assets became disposals to meet demand from sellers. A vicious circle damaging to the interest of HL itself. 

“The problem was Hargreaves Lansdown had too much with him” said Mr Hargreaves, referring to Neil Woodford.

“The clients have been stuffed in this horrible Woodford fund. I’ve drawn this big dividend. Nothing to do with me and I’ve been very successful. What do they want me to do? Give the dividend back to the unit holders?” said Mr Hargreaves in defence of the £64 million dividend he received from the company that he is entitled to as he is a 32% shareholder.

Interesting to note from bowlhead's figures that, although many individual Hargreaves Lansdown clients held a relatively modest investment in Woodford, the dividend drawn by Mr Hargreaves was equivalent to £200 from each of them.

Are you under the impression that Mr Hargreaves drew his big dividend from Woodford in some way?  He did not, the dividend was from his shares in Hargreaves Lansdown.

No, I'm drawing a comparison between Hargreaves Lansdown's dividend to Peter Hargreaves and HL clients' exposure to losses through Woodford funds for which HL were the overwhelmingly dominant broker.

Peter Hargreaves relinquished control over the day to day running of HL when he stood down as Chief Executive in 2010. He holds shares so he is entitled to dividends. 

I thought this was informative:

https://www.yodelar.com/insights/the-scary-trust-of-the-neil-woodford-hargreaves-lansdown-saga

I recall reading about the HL recommended funds, and it seemed obvious that they were getting commission, and that they would be more likely to recommend funds paying higher levels of commission. It rang so many bells that I thought I had tinnitus. The fact that people were buying into these funds without doing their own research beforehand beggers belief, especially given the past history of the financial services industry. That HL continued to push these funds suggests gross negligence or a don’t give a toss attitude towards their customers. We should ban platforms from promoting  funds when they get commission, or force them to make it clear in the advertisement for the promoted fund that they receive commission, and stating the amount. But you can’t legislate against stoopid. 

[Deleted User]

BananaRepublic said:

ZingPowZing said:

coyrls said:

ZingPowZing said:

Hargreaves Lansdown had a vested interest in any customer buying a Woodford fund rather than selling it, particularly after it started to go wrong, because they had a huge stake in Woodford that would have been increasing as a % even as the stable assets became disposals to meet demand from sellers. A vicious circle damaging to the interest of HL itself. 

“The problem was Hargreaves Lansdown had too much with him” said Mr Hargreaves, referring to Neil Woodford.

“The clients have been stuffed in this horrible Woodford fund. I’ve drawn this big dividend. Nothing to do with me and I’ve been very successful. What do they want me to do? Give the dividend back to the unit holders?” said Mr Hargreaves in defence of the £64 million dividend he received from the company that he is entitled to as he is a 32% shareholder.

Interesting to note from bowlhead's figures that, although many individual Hargreaves Lansdown clients held a relatively modest investment in Woodford, the dividend drawn by Mr Hargreaves was equivalent to £200 from each of them.

Are you under the impression that Mr Hargreaves drew his big dividend from Woodford in some way?  He did not, the dividend was from his shares in Hargreaves Lansdown.

No, I'm drawing a comparison between Hargreaves Lansdown's dividend to Peter Hargreaves and HL clients' exposure to losses through Woodford funds for which HL were the overwhelmingly dominant broker.

Peter Hargreaves relinquished control over the day to day running of HL when he stood down as Chief Executive in 2010. He holds shares so he is entitled to dividends. 

Who said he isn't? What I find implausible is the idea that Peter Hargreaves was ignorant of HargreavesLansdown's management of the Woodfund affair. Mark Dampier has been described upthread as as idiot. If so he was a very useful idiot because he was one of the fall guys.
Compare the (foregone) bonuses and salaries of the people at Hargreaves who carried the can for the fiasco with the value of Peter Hargreaves holding and dividend payments, if you are in any doubt about the power structure of the company.  

If you know the name of the editor of Rupert Murdoch's Sun, or Robert Maxwell's Mirror back in the day, good for you but it really doesn't matter.

BananaRepublic

ZingPowZing said:

BananaRepublic said:

ZingPowZing said:

coyrls said:

ZingPowZing said:

Hargreaves Lansdown had a vested interest in any customer buying a Woodford fund rather than selling it, particularly after it started to go wrong, because they had a huge stake in Woodford that would have been increasing as a % even as the stable assets became disposals to meet demand from sellers. A vicious circle damaging to the interest of HL itself. 

“The problem was Hargreaves Lansdown had too much with him” said Mr Hargreaves, referring to Neil Woodford.

“The clients have been stuffed in this horrible Woodford fund. I’ve drawn this big dividend. Nothing to do with me and I’ve been very successful. What do they want me to do? Give the dividend back to the unit holders?” said Mr Hargreaves in defence of the £64 million dividend he received from the company that he is entitled to as he is a 32% shareholder.

Interesting to note from bowlhead's figures that, although many individual Hargreaves Lansdown clients held a relatively modest investment in Woodford, the dividend drawn by Mr Hargreaves was equivalent to £200 from each of them.

Are you under the impression that Mr Hargreaves drew his big dividend from Woodford in some way?  He did not, the dividend was from his shares in Hargreaves Lansdown.

No, I'm drawing a comparison between Hargreaves Lansdown's dividend to Peter Hargreaves and HL clients' exposure to losses through Woodford funds for which HL were the overwhelmingly dominant broker.

Peter Hargreaves relinquished control over the day to day running of HL when he stood down as Chief Executive in 2010. He holds shares so he is entitled to dividends. 

Who said he isn't? What I find implausible is the idea that Peter Hargreaves was ignorant of HargreavesLansdown's management of the Woodfund affair. Mark Dampier has been described upthread as as idiot. If so he was a very useful idiot because he was one of the fall guys.
Compare the (foregone) bonuses and salaries of the people at Hargreaves who carried the can for the fiasco with the value of Peter Hargreaves holding and dividend payments, if you are in any doubt about the power structure of the company.  

If you know the name of the editor of Rupert Murdoch's Sun, or Robert Maxwell's Mirror back in the day, good for you but it really doesn't matter.

Please do some research into the difference between company directors and shareholders. You remind me of someone who hammers a square peg into a round hole when he discovers that the peg will not naturally pass through.

[Deleted User]

Sorry to read that, Banana Republic. It wasn’t my intention to keep labouring the point but as you had quoted me in your preceding post, I felt entitled to counter.

Come to that, Sir, you may wish to reflect on what that post says about you.