The Scottish Mail on Sunday

A ‘must-read’ ...on world of vested interest

- by Jeff Prestridge PERSONAL FINANCE EDITOR

ABIG thank you to the reader who kindly sent me an unthumbed copy of Effective Investing by Mark Dampier of fund platform Hargreaves Lansdown – the individual who oversaw the department that deemed investment fund Woodford Equity Income a ‘best buy’ right up until it was suspended 21 days ago.

Published four years ago and at the time badged a ‘must-read’ by some experts (it’s still available on Amazon at £15.98), the book provides pages of advice – 245 of them – on the ‘simple way to build wealth by investing in funds’.

I remember receiving a copy at the time, although I think it soon ended up at the Oxfam shop on London’s Kensington High Street along with a box of other unwanted financial books.

Leafing through it now, I find its somewhat condescend­ing tone more amusing than informativ­e. So, for example, in the section on ‘dealing with the financial press’, I refuse to take exception to the fact that the book failed to mention The Mail on Sunday as a source of useful personal finance informatio­n – after all, Hargreaves Lansdown and The Mail on Sunday have always had something of a love-hate relationsh­ip going back more than a decade. But I’m more amused by Dampier’s views at the time on journalist­s and their need to produce stories to tight deadlines.

To quote him verbatim: ‘I often hear them [journalist­s] say: “I haven’t got any time to research!” So instead they rely heavily on research done by third parties, much of it by people with a vested interest in a certain outcome.’ Not a good trait, he warns.

Well Mr Dampier, you could have been writing about your own company’s research because there is no clearer example of ‘vested interest’ than your inclusion of Woodford Equity Income as a bestbuy fund on your Wealth 150 and Wealth 50 lists, from day one of its launch in June 2014 through to its suspension on June 3.

A resolute best-buy despite internal concerns at Hargreaves Lansdown going back 19 months over the fund’s higher risk profile as a result of its exposure to illiquid unquoted assets.

As for the references to Neil

Woodford, manager of Woodford Equity Income, they are frequent. Indeed, the book reads like a hagiograph­y. ‘In my opinion, Neil Woodford is the best fund manager currently working in the UK’ (page 156). ‘I have been investing in Neil’s funds for nearly 20 years and have never regretted it’ (same page). ‘Now that [Woodford Equity Income] is what I call a massmarket product – simple, easy-toown and simple to monitor’ (page 181).

There’s even a plug for Woodford’s twitter account although @woodfordfu­nds has gone silent since the fund manager penned a blog two days after dealings in Equity Income came to an abrupt standstill, stating ‘the fund portfolio will continue to work for our investors’. Only time will tell if that statement proves correct.

Yes, I’m writing with the benefit of hindsight and Woodford could rise like a phoenix from the ashes of Equity Income (some financial advisers believe he well could). But the book’s contents support the argument I put forward in Wealth (from page 58) for urgent reform of the fund management industry. Reform that breaks the cosy relationsh­ips between the Woodfords and Hargreaves Lansdowns of this world and gives investors a fairer deal.

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 ??  ?? AMUSING: The book by Mark Dampier
AMUSING: The book by Mark Dampier

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