The continuing issues around Woodford greeting, our screens every day, makes Brexit look like a side show depending on your bias. We now have lawyers circling around the opportunity to start a ‘class action’ against Hargreaves Lansdown and quoting Peter Hargreaves himself by saying it “annoyed the hell out of me”. Slight understatement to be fair. Allegedly, he gave both barrels, reloaded and fired again at the staff involved even though he is no longer directly employed by the business. I would not want to get both barrels by Peter Hargreaves – I once got a flicked ear and that hurt enough!
So, if the lawyers are gathering, licking their lips at an opportunity to be in the limelight and famous for protecting the layperson from these asset stripping rogues, rather than asset gathering fund managers and advisers, then where do we draw the line at accountability.
The recent Panorama program was awful and biased beyond belief. In my opinion, the journalist in question skewed the story where poor Beryl (sic) lost her life savings to the villain, Neil Woodford and his gang members from Hargreaves Lansdown. I’m not condoning Neil Woodford, far from it and if you have read my previous blogs you will know I aim my sights straight at the oversight of the Fund managers as much as anyone else but, the program was just so inaccurate. I’m no lawyer, just someone concerned that our industry is being rubbished all for the wrong reasons.
Turning back to those poor investors who, took no advice but for various reasons, put all their monies into the Woodford Funds because he was the UK ‘Warren Buffet of investment. Where was the advice? It was her friend, not an adviser or financial expert. She read the glowing accolades in the Press and based on that and her friend’s advice, she invested. Many others did and they used the HL platform due to its efficiency and price.
Our industry has to now pick itself up from the damage done and recognise we have to start building the trust back with investors. Thankfully that isn’t impossible because we have allies in the shape of advisers and wealth managers who recognise the value add of asset management. Passive, active, ESG or just plain old gas-guzzling, gun toting global equities, which ever fund the investor chooses should be influenced by advisers at whatever level. Sure, there are professional investors and I have no issue there.
My point is we have created a culture where experts appear in every publication giving their top funds for example with no recourse. These very experts and journalists have published their favourites over the years and the public has grown accustomed to the hype surrounding the funds. Some journalists actually talk about their own portfolios as if they are the best around with glowing reports of their performance and accolades to the manager. Sadly, many investors will play the market based on these ‘recommendations’ with no recourse if things go wrong. It is after all just tomorrows fish and chip paper!
Where does the Adviser fit in all of this? Well, central if you ask me. They are the key to the answers, the glue that sticks investors in the right fund and the ear if there are problems. Orphan clients have no recourse but instead get swept along by the lynch mentality that pervades in society at times these days. There are no winners there. Just an egotistical journey for lawyers who smell blood in the water and want to feast on the carcass of the poor soul that is thrashing half alive in the water. Advice is exactly that and investors should seek advice, not recommendations from people who don’t know the full story and can’t see the entire picture with regards the circumstances around a particular individual.
So, let’s hear it for advice and the crucial position they play in the value chain for investors. They can work with the asset management to restore confidence in the industry as they understand it and recognise the core value of it. Perhaps one day we will all have learnt the key roles we all played in this car crash of the last 6 months…we’ll see !