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Original poster

Neil Woodford's downfall

41 replies

wavyneighbour · 07/06/2019 19:14

Anyone else upset by this?

I was lured as a new investor into investing much of my small inheritance into Woodford funds and WPCT a few years ago by all the aggressive marketing and hype from Hargreaves Lansdown, and the huge quantity of positive publicity they gave the man …. until just about a week ago. Paid for financial advice last summer too, and got flogged yet more Woodford funds - despite my misgivings and direct querying of their advice - and I'm not an even an expert!!

So on May 16th (just before the proverbial hit the fan) H Lansdown CEO Mark Dampier and spouse just sold up millions in their own shares in Hargreaves Lansdown, a platform deeply associated with all the Woodford funds - most of which they have doggedly kept on promoting in their 'Wealth 50' (top fund) recommendations, against all the obvious evidence of Woodford irresponsible management and rubbish performance. What fortunate timing! Hmm They're now £1.15 million better off today than if they'd hung on to their shares till yesterday. See Ben Martin's article in Times Business section today.

Where's the FCA?

I and my son are much poorer now.

OP posts:
Colourmylife1 · 07/06/2019 22:37

Me too. I have 20% of my SIPP invested in this fund.

nannynick · 07/06/2019 22:39

I hope that the FCA will look in to cases where people paid for advice and were told to invest in the particular fund involved. That advice may or may not have been suitable for the individual investor.

cupofteaandcake · 07/06/2019 22:45

I feel for you OP and hope the FCA get involved. What shocked me was how quickly Woodford was able to stop people cashing in their investments.

Teddybear45 · 07/06/2019 22:56

The only problem here is that there are a lot of green investors who HL didn’t explain the risks behind Woodford’s investments thoroughly enough to. I seem to remember an advert article in the Daily Mail resulted in a huge influx of funds by people who thought they were in for a quick win. The truth is that in the current market HL should have been honest that investors should only expect to be able to make their money back after a 10 year period.

Hopefully he does restart trading - I still believe his funds are a bargain longer term.

Colourmylife1 · 08/06/2019 07:13

As it forms part of my pension saving it is a long term investment but it will take all my nerve to hold onto it as my confidence has been knocked. I am a novice and probably not a good candidate for a SIPP

chimichangaz · 08/06/2019 09:12

I have a SIPP and until last year had a proportion invested in Woodford funds. However, I and my advisor had been keeping an eye on the performance and decided to get out of that and into another. My advisor cocked up by not actioning my request for 6 months (which they paid for) and I am now thanking my lucky stars I got out when I did.
Those of you that said they had advice (especially the one who said they had queried it) need to make a complaint - I think you need to complain to your advisor directly to give them a chance to resolve before going to the FCA but it is definitely worth doing. I had bad advice and complained and ended up with compensation.
Good luck.

Drasticaction · 08/06/2019 12:25

OP I really feel for you. I've Been looking at doing similar with v small cash inheritance.

I've been looking at fund's but I think he invested in capita and I know that's a terrible company.

I do think in future do your own research into the companies.

It's opened up Very interesting link between h and l however and their fund managers hasn't it!!

Did you see article that simple Very cheap vanguard tracker has out performed nearly all fund's

My own strategy has tweaked after this.

I am going to still invest in two funds that I know and like companies they invest in.

Also look at where these companies based, what industry.
Read reviews of the fund's best invest do Spot the dog... morning star and others have more in depth info. But overall, aside From some higher risk, higher gain gambles, it's better to have bulk in low cost trackers.

Also have you held onto the shares...have you withdrawn as small chance they could still go up?

Always spread bets...

ourkidmolly · 08/06/2019 15:22

Yes all very depressing and yet again the rich get away with it. Cashing in before closing withdrawals. Smells of insider trading to me. Stinks I should say.

Original poster
wavyneighbour · 08/06/2019 18:04

Yes I think it really stinks!! HL should be looking to admit their share of due responsibility and if not, should be forced to do so by the FCA, who by their inaction thus far, seem pretty toothless and wishy washy to me.
When the news of the freezing of the Equity Income Fund broke, I finally sold all the remainder of my holding in the Patient Capital Trust the next morning as early as I could - unfortunately, at the lowest price, around 62p - It went up a bit after that but now I think it's tanking again. My feeling was to get out totally, even at a loss; better to lose something now than everything later. I just feel thoroughly spooked now regarding everything touched by NW, now tainted. I just don't trust him or his judgement at all any more. I can't see how he can ever recover from this; it's scandal territory now.

OP posts:
Original poster
wavyneighbour · 08/06/2019 18:06

Drasticaction thanks for your thoughts, I agree with all of them, and could you kindly mention which specific Vanguard Tracker that was? I'm already minded to move out of most of my expensive funds and in to trackers.

OP posts:
Original poster
wavyneighbour · 08/06/2019 18:25

Thanks indeed to everyone for all your thoughts and comments.

I'm just wondering if I might have any basis for asking for compensation from Hargreaves Lansdown - even though I'm now sold up from all my NW funds - for their FLAGRANT overmarketing/Woodford hype, and wrongly promoting Woodford Funds so aggressively to ordinary and potentially naïve investors for such a very long time - even when the writing was already on the wall as the funds were obviously performing so badly!!! I'm at least £2000 down probably more on my original investments, forget any of the much promised (but dazzlingly absent) profit. Some of you probably much more - commiserations.

Seems to me we were simply the pawns they used to reap huge profits from fees etc - and just look at how NW is even now still charging fees to those whose investments he has now frozen!! It beggars belief that he's still getting rich on the backs of his victims. He needs to do something serious and tangible to apologise, compensate and repay his debt to his injured investors for his investing irresponsibility and stubbornness over the past 2 years.

I've been thinking 'Emperor's New Clothes' for well over a year now. Last year I went to a St James' Place seminar to explore their advice, and asked them too why they were still such fans of Woodford when the funds' performance was obviously such rubbish, yet they also said they had lots of faith in him. - When such big names as this were telling you how good he was, it has a very big influence on new investors who haven't got the experience or knowledge to question their comments.

OP posts:
nannynick · 08/06/2019 19:53

If you got advice from HL then I would certainly ask about compensation. Not sure if you invested without advice... they did send out marking material but you don't have to read that and I expect it had the usual warning about there being a risk of loss.

ourkidmolly · 08/06/2019 20:05

I've actually been disgusted by HL in all this. They're hand in glove. I'm thinking of changing to AJ Bell.

nannynick · 08/06/2019 20:44

I wonder if HL would remove exit fees as a good will gesture so anyone considering leaving them can leave without costs.

ourkidmolly · 08/06/2019 22:18

I very much doubt that!

Mrstraveller · 10/06/2019 15:49

I’m with HL for both my SIPP and an ISA and I’m also thinking of moving to either AJ Bell or Interactive Investor. I bought into the Woodford Income Focus fund when it was first launched as it was promoted at a discount. I’ll be honest that I invested totally on the basis of his reputation and that HL were promoting the fund as one of their Wealth funds which they claim to thoroughly research. However I did only invest a small amount of my overall portfolio as I knew it wasn’t based on my own research. The fund has never performed and I’d been thinking about getting out of it for ages but never got round to it.

Sold on Friday at a 20% loss but it was only a small part of my portfolio as I’d just invested a small lump sum at launch to see how it performed over time (answer was badly😕).

This has shaken my faith in HL. They kept the Focus fund in their Wealth list even when it was clearly performing extremely badly when compared with other funds over a similar timeframe. Why on earth Terry Smith’s fund wasn’t in their Wealth 50 I’ll never know.

fromdownwest · 13/06/2019 10:34

@wavyneighbour - Welcome to the world of investing.

Sadly there are always losers as there are winners, HL is primarily a self invest platform. Therefore they assume that you have done due diligence when investing and have read the KIID's and risk warnings.

Having more than 20% in one fund, particularly an income fund in a time of low bond returns is not smart investing.

If however you received advice, then you would have had a risk profiling undertaken and also a portfolio constructed. Any adviser that could justify more than 25% in a single fund is going some, so in that instance you would be in a position to challenge. However, you would have paid for this advice.

Arnoldthecat · 13/06/2019 20:00

I do not have any managed OEICs/funds. I have global trackers including fixed interest/bonds and some ITs. I think woodford let human emotion get in the way of his investment decisions. I also think HL and some of its employees/directors need to be investigated as to why they cashed out before the gate closed.

HL have other issues to address,for example,

Their excessive platform fee
Their excessive charging for moving an ISA i,e £25 per holding plus £25 closure fee. This effectively inhibits competition and freedom of movement.

HL do provide very good customer service but i do not believe they listen to customers and only deliver what generates fat profits for them.

NeedAUsernameGenerator · 13/06/2019 20:40

I'm sorry you lost money OP. I had a small amount of WPCT but didn't hold it for long as my Dad warned me against it. How many other funds do you hold and how has your portfolio done overall? If you held a significant percentage in Woodford then I definitely think you received bad advice.

Alwayscheerful · 14/06/2019 16:00

@Drasticaction which Vanguard tracker are you referring to Please?

MrPickles73 · 28/06/2019 08:24

I also have money in the frozen Woodford fund...

User8888888 · 28/06/2019 15:39

The woodfood fund was never really one suitable for a large percentage investment for a new investor. I think there are certainly questions about the way HL market the wealth 50 funds but whether they’ll be held accountable for that is questionable. You could definitely pick a very risky portfolio if you just selected from the wealth 50 without really knowing what you were doing.

I did look at it but fortunately didn’t invest as there was a lot of chatter on the mse and city wire forums about the nature of the fund.

funcreativity · 28/06/2019 15:59

HL are a relatively expensive platform to invest through. I think Cavendish online and Charles Stanley Direct have some of the lowest fees in the market. Vanguard have their own platform to invest directly in their funds. I e invested a little in their Lifestrategy funds and they're doing well.

NightsOfCabiria · 02/10/2019 21:33

Just reanimating this thread as I have over £5,000 in the Woodford Fund. Ive heard that its highly unlikely that it’ll ever be unfrozen. Scandalous, especially given the timing of the Hargreeves Lansdown withdrawal.

MissConductUS · 04/10/2019 18:45

Wow, I just googled the Woodford Fund as I wasn't familiar with it. This is a case study for tracker/index funds that only invest in highly liquid assets, and for Vanguard, which is owned by its investors and run for their benefit.