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    • docboy
    • By docboy 11th Jun 19, 12:07 PM
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    docboy
    Hargreaves Lansdown fiasco
    • #1
    • 11th Jun 19, 12:07 PM
    Hargreaves Lansdown fiasco 11th Jun 19 at 12:07 PM
    What do people think about Hargreaves Lansdown (HL) brokers? I understand their company executives cashed out on Woodward funds (HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis) at its peak, only to then see the fund prices spiral down. Is this insider trading?? Is HL reliable as a broker anymore??
Page 2
    • docboy
    • By docboy 14th Jun 19, 11:01 AM
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    docboy
    Thanks
    Check your facts. Mark Dampier of Hargreaves Lansdown sold his shares in Hargreaves Lansdown. I have not seen it reported that he had any investments in Woodford at all
    Originally posted by ColdIron
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    'HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis'
    • dividendhero
    • By dividendhero 14th Jun 19, 11:04 AM
    • 2,140 Posts
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    dividendhero
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis
    Originally posted by docboy
    Looks like Stephen Lansdown cashed his chips in too around the same time.

    Surely just a coincidence
    • coyrls
    • By coyrls 14th Jun 19, 11:46 AM
    • 1,245 Posts
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    coyrls
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    'HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis'
    Originally posted by docboy
    Sorry my friend, but the shares referred to are Hargreaves Lansdown shares, not Woodford (or Woodward) funds as you claimed in your OP.
    • redux
    • By redux 14th Jun 19, 11:48 AM
    • 19,781 Posts
    • 27,533 Thanks
    redux
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    'HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis'
    Originally posted by docboy
    Yes, you can find articles about senior HL people cashing in shares.

    The nuance that may be still escaping you (it sounds like) is that the reports all say they sold HL shares (as ColdIron replied), not Woodford funds (as your OP still claims).

    This may be entirely coincidence, or an attack of visionary genius, and that possibly partly informed by inside knowledge, or possibly not, and we may or may not ever get a straight answer ...

    But at least let's have the facts correct: they sold their own company shares.
    • ColdIron
    • By ColdIron 14th Jun 19, 11:56 AM
    • 5,442 Posts
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    ColdIron
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    'HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis'
    Originally posted by docboy
    Indeed they did but they were Hargreaves Lansdown shares not any (unreported) interests they may have had in Woodford

    If you have any information showing that 'their company executives cashed out on Woodward funds' then I, and many others, would be interested to hear about it. Otherwise this is just muckspreading

    I repeat: check your facts
    Last edited by ColdIron; 14-06-2019 at 6:54 PM.
    • Thrugelmir
    • By Thrugelmir 14th Jun 19, 12:05 PM
    • 64,850 Posts
    • 57,216 Thanks
    Thrugelmir
    Sorry my friend, but this is what I came across, and you too can find articles if you Google this following.

    'HL's Dampier and Gardhouse cashed in shares weeks before Woodford crisis'
    Originally posted by docboy
    Still hold sizable share holdings in the company. Like any investor diversification is paramount.
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • Vortigern
    • By Vortigern 14th Jun 19, 5:57 PM
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    Vortigern
    Still hold sizable share holdings in the company.
    Originally posted by Thrugelmir
    I think you need to be more specific (for docboy)

    Who still holds shares in which company?
    • Herbalus
    • By Herbalus 14th Jun 19, 7:32 PM
    • 2,373 Posts
    • 2,082 Thanks
    Herbalus
    I think you need to be more specific (for docboy)

    Who still holds shares in which company?
    Originally posted by Vortigern
    I thought it was obvious. Woodford still holds shares in Dampier.
    • Thrugelmir
    • By Thrugelmir 14th Jun 19, 10:26 PM
    • 64,850 Posts
    • 57,216 Thanks
    Thrugelmir
    I think you need to be more specific (for docboy)

    Who still holds shares in which company?
    Originally posted by Vortigern
    Lindsell Train funds have significant holdings in HL. This is going to rumble on.
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • arnoldy
    • By arnoldy 15th Jun 19, 8:03 AM
    • 88 Posts
    • 113 Thanks
    arnoldy
    I was looking at the Hargreaves Multi Manager Growth and Income and the Woodford fund % has dropped from 14% to 12%.


    As the fund has been gated this would imply they were selling out before suspension - simultaneous to pushing it to their small investors.


    Have I missed something or miss understood?
    • ffacoffipawb
    • By ffacoffipawb 15th Jun 19, 8:35 AM
    • 2,917 Posts
    • 2,045 Thanks
    ffacoffipawb
    I was looking at the Hargreaves Multi Manager Growth and Income and the Woodford fund % has dropped from 14% to 12%.


    As the fund has been gated this would imply they were selling out before suspension - simultaneous to pushing it to their small investors.


    Have I missed something or miss understood?
    Originally posted by arnoldy
    Perhaps the values of the other holdings have gone up, reducing the proportion invested in the Woodford dross?

    Also the percentage may include Income Focus which is still tradeable?
    Retired: Financial Independence achieved in June 2019.

    Cofiwch Dryweryn
    • bowlhead99
    • By bowlhead99 15th Jun 19, 8:44 AM
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    bowlhead99
    I was looking at the Hargreaves Multi Manager Growth and Income and the Woodford fund % has dropped from 14% to 12%.

    As the fund has been gated this would imply they were selling out before suspension - simultaneous to pushing it to their small investors.

    Have I missed something or miss understood?
    Originally posted by arnoldy
    Yes you are probably missing / misunderstanding something.

    Now - as of mid June - the latest available factsheet is 31 May. What you are seeing in the fund allocation percentage dropping is simply the factsheet ticking over from showing you end-of-April data when you last looked at it, to showing you end-of-May data now.
    (https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hl-multi-manager-income-and-growth-trust-accumulation)

    You can see from a Woodford performance chart that Woodford Equity Income would have dropped in value by 10% during the month of May. Presuming the other held funds didn't also drop by as much as 10% over the month on average (e.g., Marlborough fell by a smaller percentage), the percentage of the fund made up by the Woodford holding would have declined.

    Also as per the May factsheet, the Woodford holding was 12.8%, which you've rounded down by quite a lot when saying it has dropped to 12% from 14% (I don't know by how much you had also rounded the 14% up or down as I haven't looked for the old factsheet).

    So, the fact that the Woodford holding within the fund has dropped by a small percentage does not mean they sold 2/14ths of their holding.

    And also 'selling while simultaneously pushing it to small investors', even if it happened, is not as nefarious as it perhaps sounds - because they are also pushing their other holdings to their investors via the Wealth 50. If they had chosen to replace some Woodford within their multimanager fund with some Artemis or Marlborough or Threadneedle instead (all of whom they also promote to investors by putting them in the Wealth 50) it would just imply they had made a judgement about allocation, among all the funds that they have on the marketing list.

    I'm not suggesting HL are great people, just that you might have misinterpreted what you were looking at.
    • dividendhero
    • By dividendhero 16th Jun 19, 7:32 PM
    • 2,140 Posts
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    dividendhero
    According the this weeks Economist, HL run on a profit margin of 65%

    With margins like that they could have ditched nonsense like the Wealth 50 and still had a profitable sustainable business..
    • bowlhead99
    • By bowlhead99 16th Jun 19, 8:33 PM
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    bowlhead99
    With margins like that they could have ditched nonsense like the Wealth 50 and still had a profitable sustainable business..
    Originally posted by dividendhero
    What if the constant advertising copy, junk mail, handholding of customers by giving 'our best ideas', the guiding of investors towards funds where a lower management fee has been agreed making the platform fee more affordable, constant advertorial for funds which the customers 'wouldn't want to miss out on' etc etc etc... ... was the reason they are able to get so many fee-insensitive customers who like what they perceive to be a high level of service and very informative website etc.

    If they dropped those 'value-added' services (ie all the advertorial content and promotion of the negotiated superclean share classes where they can get fee breaks for supplying large volumes of investors) they wouldn't make so much margin as surely that promotion work more than pays for itself in driving customer volume and AUM.

    Without the sort of stuff that made them a destination of choice for newbies who needed a helping hand narrowing down 3000 choices, or for wealthy patrons who like the idea of a comprehensive website and lashings of investment "research"... they would need to drop the fees to get the customer numbers up... and then without being 'reassuringly expensive' why are they better than anyone else in the space?

    Shareholders don't like initiatives that lose customers, even if they shouldn't have had the customers in the first place. They don't like it when the board plays it safe and settles for 'sustainable' revenues when the year before it was going gangbusters. Going from nice revenue and margin growth to a plateau or a drop will spook investors who fear a company to be ex-growth. So, even if overpromotion is something to reel themselves back in from, the owners of the business don't like to see it happen.

    There is also the point that the profits and valuation of an investment platform is linked to financial markets and the economy generally. If the FTSE is at 4000 instead of 7000, and revenues are linked to AUM, the revenues fall, but the main costs of running a business don't. They have high operational gearing even if they don't have high financial gearing. So, high margins doesn't mean they are reliable sustainable margins. The platform business is not generally high growth, it's a numbers game that's all about economies of scale.
    • fun4everyone
    • By fun4everyone 16th Jun 19, 8:38 PM
    • 1,796 Posts
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    fun4everyone
    they are able to get so many fee-insensitive customers
    Originally posted by bowlhead99
    Ultimately, this is what's crucial to being profitable as a fund platform (or in any business) and HL are the kings at it.
    • Thrugelmir
    • By Thrugelmir 16th Jun 19, 9:09 PM
    • 64,850 Posts
    • 57,216 Thanks
    Thrugelmir
    According the this weeks Economist, HL run on a profit margin of 65%

    With margins like that they could have ditched nonsense like the Wealth 50 and still had a profitable sustainable business..
    Originally posted by dividendhero
    Revenue is vanity, profit is sanity but cash is always king. Recommend a thorough read of the published accounts in particular the cash flow statement. Margins are only part of a much bigger picture.
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • chucknorris
    • By chucknorris 16th Jun 19, 9:38 PM
    • 10,186 Posts
    • 15,064 Thanks
    chucknorris
    they are able to get so many fee-insensitive customers
    Originally posted by bowlhead99
    The only reason that I am a customer of HL is because of their low fees, I have just over £1.3m invested there and pay only £245 per annum in fees for my SIPP and ISA's (plus dealing charges on my ETF's, corporate bonds and REIT).
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    I've started running again, after several injuries had forced me to stop
    • pursuitofmoney
    • By pursuitofmoney 17th Jun 19, 7:24 PM
    • 50 Posts
    • 9 Thanks
    pursuitofmoney
    I've transferred my SIPP to AJ Bell due to this fiasco
    • bowlhead99
    • By bowlhead99 18th Jun 19, 6:08 AM
    • 9,354 Posts
    • 17,011 Thanks
    bowlhead99
    they are able to get so many fee-insensitive customers
    Originally posted by bowlhead99
    The only reason that I am a customer of HL is because of their low fees, I have just over £1.3m invested there and pay only £245 per annum in fees for my SIPP and ISA's (plus dealing charges on my ETF's, corporate bonds and REIT).
    Originally posted by chucknorris
    I'm not suggesting they don't have smart customers such as yourself.

    Really it's the advertising, hype and strategic 'hand-holding' that they offer to fee-insensitive customers which allows them to become quite receptive to anyone who comes along with a hundred grand or a million to invest in simple stock exchange-traded products - because they will hope that you might end up buying some higher margin service in due course, and if not, they have a lot of fee-insensitive people delivering them a massively higher margin with which they can subsidise the cost of any customer service they need to give you on your simple-to-administer investments.
    • redux
    • By redux 18th Jun 19, 12:21 PM
    • 19,781 Posts
    • 27,533 Thanks
    redux
    I'm not suggesting they don't have smart customers such as yourself.
    Originally posted by bowlhead99
    Much more modest holdings here, and they only earn single figure pounds a year from me, as fees on dividend reinvestment, after I only arrived there by chance or coincidence, on a couple of investment trust managers closing their own schemes (and a couple more happening now)

    In fact I think if I switched to dividend payout they'd earn nothing at all, but I think I'll cope ok on under 0.01% reduction a year.

    As for their marketing, I only look at a fraction of it, and then not necessarily all the way through, though I did go back to one email and sign up for a so-called retirement seminar soon, after someone on here went and thought it worthwhile (though it started with several Woodford questions).
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