Hargreaves Lansdown has come under fire from rivals after it emerged customers are being forced to wait up to three months to transfer their assets to other investment platforms in the wake of the collapse of Neil Woodford’s investment empire.
Five of the fund supermarket’s competitors told City A.M. that waiting times for customers transferring to them from Hargreaves have increased dramatically in recent months amid a “bottleneck” of customers leaving the platform.
AJ Bell, Interactive Investor, Bestinvest, Charles Stanley and further leading investment platform all said they had experienced delays.
“Barriers to customers transferring affect all of us and reflects badly on the industry. We won’t stand for it,” Interactive Investor chief executive Richard Wilson told City A.M.
It is currently taking an average of 44 working days for customers to switch from Hargreaves to Interactive Investor, the platform said, while customers switching the other way are waiting an average of 8.5 days.
“If you choke the process, you frustrate it. Transfers should be a clear transparent process,” said Wilson.
“Transfers from Hargreaves Lansdown are taking longer than we’d expect,” said a spokesperson for investment platform AJ Bell.
“This is understandably frustrating for customers and we are doing everything we can to speed up the process for them but obviously we are only one half of the equation.”
A spokesperson for Bestinvest confirmed that transfers to it from Hargreaves had been “taking longer in recent weeks” and said there “appears to be a bottleneck” of clients trying to transfer away from the firm.
“We have been experiencing delays and we have a backlog of pending transfers waiting to complete,” said a Charles Stanley spokesperson.
City A.M. understands that in some cases it is taking six weeks for Hargreaves to even begin the transfer process.
A Hargreaves Lansdown spokesperson said the fund supermarket was not experiencing “a backlog across the board”.
“There have been a few case studies where there are specific complexities which have delayed their transfer times,” they added, “but it is not a usual circumstance for our clients.”
Hargreaves Lansdown has come under scrutiny over its support for disgraced fund manager Neil Woodford since his flagship fund was suspended in June after becoming overwhelmed by redemption requests.
Hargreaves continued to recommend the fund right up until it was gated, and the suspension affected over 290,000 investors who had around £1.6bn invested in the fund.
The AJ Bell spokesperson said customer transfers from Hargreaves appeared to be “particularly” delayed “when they involve the transfer of shares via self-invested personal pensions and ISAs”.
Such transfers typically take four to six weeks, but are currently taking around six weeks longer than usual.
News of the transfer delays were first reported by the Financial Times.