One of the founders of Hargreaves Lansdown (HL) has slammed beleaguered asset manager Neil Woodford for apparently not being “truthful” about the performance of his flagship fund in the run up to its suspension.
Peter Hargreaves, who founded the financial services firm alongside Stephen Lansdown in 1981, also criticised HL for not having realised that there was a problem with Woodford’s Equity Income Fund (EIF) until it was too late.
“It’s annoyed the hell out of me that it would appear he [Woodford] has not been truthful with Hargreaves Lansdown. But it’s also annoyed me that they let it go on so long,” Hargreaves told the Sunday Times.
HL has come under criticism since the suspension of EIF in June for having continued to recommend the fund to its clients right up until it was gated after becoming overwhelmed by withdrawals.
Hargreaves also slammed HL for holding too many Woodford’s funds. “The problem was Hargreaves Lansdown had too much with him,” he said.
The suspension of EIF affected over 290,000 HL investors – about a quarter of the company’s total. Hargreaves customers have around £1.6bn trapped in the frozen fund.
Hargreaves stood down from HL’s board in 2015, but still holds a 32 per cent stake in the financial services firm.
Responding to criticism over the £64m dividend he had received from HL, Hargreaves said it was unrelated to the Woodford scandal.
“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,” Hargreaves said. “What do they want me to do? Give the dividend back to the unit holders?”
Some investors were initially locked in to both EIF and HL in the aftermath of the suspension, but Woodford lifted the block on transfers between HL and other platforms in July.
Four HL executives, including chief executive Chris Hill, announced they would waive their bonuses in the wake of the scandal.
HL announced the scrapping of a controversial exit fee last week in a bid to repair some of the reputational damage inflicted by the Woodford saga.
The investment platform axed the £25 charge to transfer to a rival with immediate effect, alongside eight other fees.
Both Woodford and Hargreaves Lansdown declined to comment.