PETER Hargreaves, the founder of Hargreaves Lansdown, hit back at the Financial Services Authority yesterday after its decision to ban some fund platform payments wiped about £280m off the firm’s market value.
The fund manager’s share price closed down 12.7 per cent after the FSA banned platforms, which let investors manage their own portfolios, from paying cash rebates to clients or taking payments from funds they market.
Investors took fright as the FSA included execution-only services – which make up the bulk of Hargreaves Lansdown’s Vantage platform – in the rules for the first time.
Hargreaves told City A.M. the news “doesn’t concern us greatly” but had caused unwarranted pain in the market. “I’m the biggest shareholder and I’m down about £200m from the peak,” he said. “It would be nice if the FSA could make an announcement without destroying value like this.”
Others attacked the FSA’s claim that it would not ban the payments immediately because of “possible unintended consequences”.
Collins Stewart analyst Robin Savage said that could be viewed as “pretty abusive” to the market.