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More than 5,000 people who invested in Neil Woodford’s collapsed equity fund are suing Hargreaves Lansdowne, claiming the UK’s biggest investment site continued to recommend the product even as it ran into trouble. went
Claims firm RGL Management said the number of people taking part in a group High Court claim against Hargrave Lansdown had almost doubled in the past two years. It added that the average individual claim, including interest, was around £20,000.
The final number of claimants is expected to be higher, with RGL planning to file on behalf of more Hargreaves Lansdown customers next year.
Hargreaves Lansdown declined to comment. It had earlier rejected all claims made by RGL when it filed for the first set of claimants in 2022 “as there was no solid basis for the claim”.
Hargreaves Lansdown is the largest seller of retail investment products in the UK and has promoted Woodford’s flagship UK Equity Income Fund since it set up its business in 2014.
However, the fund collapsed in 2019 after investors tried to pull out due to poor performance of its shareholdings and private company investments.
As a result, the fund was frozen. Around 300,000 people invested in it through Hargreaves Lansdown, making up £1.6bn of the fund’s total £3.7bn.
RGL said the claim was for “losses suffered by investors as a result of Hargrave Lansdowne’s conduct in continuing the recommendation.” [the fund] Despite being aware of the Hargreaves Lansdown fund’s long-standing portfolio diversification and liquidity problems until the day of its highly publicized demise.
The claimants were seeking a refund of their lost money as well as damages for the lost opportunity to generate returns by investing elsewhere, the firm said. It is working with the law firm Wallace LLP.
RGL said on its website that if the claim is successful, “the amount to be deducted from the gross income . . . will be 25 per cent inclusive of VAT by the RGL Group, noting that this includes other expenses.” Also includes legal fees.
Michael Green, director of RGL Management, said: “Adding thousands more claimants . . . represents another step towards holding Hargreaves Lansdown to account for its conduct in relation to the Woodford Equity Income Fund. New claimants on Friday RGL filed a petition in the High Court on behalf of
Woodford’s fund administrator, Link Fund Solutions, reached a settlement agreement with the Financial Conduct Authority last year over its role in the fund’s collapse.
As part of the deal, LFS has provided redress to affected investors through a compensation scheme of up to £230mn. As a result, LFS avoided a £50mn fine from the watchdog.
