Red faces at Hargreaves

THE collapse of Neil Woodford’s investment empire is a major embarrassment for Hargreaves Lansdown.

The fund supermarket was one of the fallen stock picker’s biggest cheerleaders, repeatedly featuring him on its ‘best buy’ list, despite concerns about his portfolio.

It also offered clients discounted fees if they backed his funds. But Hargreaves, which has 1.1m customers, had to apologise when Woodford’s Equity Income fund was frozen in June.

The freeze was imposed when investors concerned about poor performance rushed to the exit, leaving Woodford short of the cash he needed to repay them.

Since then, critics have questioned why bosses continued to support Woodford publicly. This month angry shareholders told Hargreaves its closeness to Woodford had ‘badly damaged’ its reputation.

Speaking at the firm’s annual general meeting in Bristol, private investor Christopher Jenkins told the board: ‘I find it appalling that his fund was still on the [best buy] list after all of the signs.’

Hargreaves had harboured reservations about Woodford’s portfolio at least 18 months before the freeze. It first raised concerns with him in 2017 about the amount of cash he had invested in small and unlisted companies, with bosses later demanding monthly progress meetings.

Chris Hill, Hargreaves’ chief executive, said Woodford had kept the fund supermarket in the dark over his breaches of City rules that say how much a fund can invest in these difficult-to-sell stocks.