Hargreaves Lansdown chief executive Chris Hill said he is “angered” by the lack of resolution regarding Neil Woodford’s suspended flagship fund.
The fund supermarket’s investors currently have £1.6bn exposed to the suspended Woodford equity income fund.
Since the fund was last tradable on 31 May its value has fallen five per cent, Hill said.
In a statement today Hill said: “We are angered by the lack of resolution so far but remain actively engaged with the regulator, Woodford, Link [the fund’s authorised corporate director] and the treasury select committee to ensure that all investors, not just those invested through Hargreaves Lansdown, are able to access their investment as soon as possible.”
Hargreaves Lansdown has come under fire for failing to remove Woodford’s fund from its “best buy” lists despite raising concerns with the fund manager as early as 2017.
The fund was only removed following its suspension earlier this month, prompting questions over the close relationship between the two businesses.
The investment platform received £41.1m in fees from the fund since its launch in 2014, it was revealed in a letter from Hill to the treasury select committee yesterday.
“The nearly 300,000 Hargreaves Lansdown customers who invested in this fund through the investment platform are probably more than a little angered,” said Shaun Port, chief investment officer at Nutmeg.
“We’ve seen that Hargreaves Lansdown has attempted to defend its due diligence process, but the reality is that they’ve said they were concerned about the fund in November 2017 – so, why did they sit back and watch the situation steadily worsen for a further 18 months? All the while, continuing to promote the Woodford fund on their best buy list.
“In our opinion, the liquidity profile of the fund as far back as June last year, was more like a hedge fund that required 90 days’ notice to redeem and was unlikely to be appropriate for the average retail investor on the platform. This must be pretty concerning for all Hargreaves Lansdown investors, who could have some major questions for the investment provider.”
Yesterday Hill also said that Woodford had not told Hargreaves Lansdown when it breached a 10 per cent investment limit in unquoted stocks.
“We have subsequently, on 18 June 2019 in Financial Conduct Authority (FCA) chair Andrew Bailey’s response to the treasury select committee, found that Woodford twice breached this limit in February and March 2018,” he said.
“They did not inform us of this on either occasion”.
However, a Woodford spokesperson said the manager was only obliged to inform Hargreaves Lansdown of “month-end” breaches.