Hargreaves makes fresh call for Woodford to drop fees on frozen fund

Hargreaves Lansdown chief executive Chris Hill has made a fresh plea for Neil Woodford to drop fees for his suspended fund after confirming bosses will take no bonus this year due to the fiasco.

On unveiling full-year results, Mr Hill said Hargreaves Lansdown shared client “disappointment and frustration” over the Woodford fund saga.

Hargreaves has already waived fees on its platform fees where clients directly held the frozen Woodford fund, which it revealed is costing the group £360,000 a month in lost revenue.

Mr Hill said it is the “right thing” for Mr Woodford to do the same and waive its fees.

It emerged on Wednesday that Mr Hill, chief financial officer Philip Johnson, chief investment officer Lee Gardhouse and research director Mark Dampier will give up their 2019 bonuses.

Mr Hill had only previously said they would not take bonuses while the fund was suspended.

But Mr Hill said: “I am determined that we learn from events such as these.

“I have apologised to all clients who have been impacted by the recent problems because we all share their disappointment and frustration.

“In these difficult times we recognise the financial and personal impact the gating of the fund has had on them.

“Philip (Johnson) and I, together with the unanimous support of the board, have therefore decided that we will not take a bonus award for 2019.”

Almost 300,000 Hargreaves investors have around £1.6 billion in assets exposed to the Woodford Equity Income Fund, which was suspended in early June.

Hargreaves has come under fire for its support of Mr Woodford in its “best buy” list and in-house funds, despite raising liquidity concerns with the fund manager as early as 2017.

Mr Hill told the Treasury Select Committee recently that Hargreaves Lansdown raised concerns about the Woodford Equity Income Fund in November 2017.

He said on Thursday that the saga was not impacting the firm’s ability to run the business on a day-to-day basis.

But he said they were reviewing aspects of the firm’s investment processes following the fund suspension.

He said the group is looking at “the research we make available to clients and to make that transparent to them”.

“There’s a whole process that we are looking at we will be sharing this with clients,” he added.

The comments came as Hargreaves Lansdown reported a 5% rise in pre-tax profits to £305.8 million for the year to June 30.

It saw total assets under administration grow 8% to £99.3 billion, but net new business inflows fell 4% to £7.3 billion amid shaky investor confidence in the face of Brexit uncertainty.