Woodford Fund Fallout: Investors Seek Redress from Hargreaves Lansdown
Nearly six years after the collapse of Neil Woodford’s investment firm, the repercussions continue as a group legal action against Hargreaves Lansdown (HL) gains momentum. The Woodford Equity Income Fund (WEIF), a £3.7 billion entity laden with unsuitable, non-liquid assets, infamously froze investor dealings and ultimately never reopened.
The fund’s dismantling resulted in significant losses for the 300,000 investors locked into WEIF when withdrawals were halted. Compensation distributed last year offered minimal recompense for their financial setbacks.
Regulatory Scrutiny of Woodford Ongoing
The disciplinary process against Woodford by the Financial Conduct Authority (FCA), the UK’s financial regulator, is still underway, proceeding at a slow pace. It remains uncertain when, or if, the FCA will hold the fund manager accountable, given past criticisms of the regulator’s effectiveness and Woodford’s perceived evasiveness.
Hargreaves Lansdown Faces Investor Lawsuit
Litigation specialists RGL have initiated a High Court group claim against wealth manager Hargreaves Lansdown. The claim centers on HL’s continued promotion of the Woodford fund to its clients, even amidst internal concerns regarding WEIF’s risky investment strategy.
This legal action, filed two and a half years ago, aims to recover investor losses stemming from Hargreaves Lansdown’s recommendations of WEIF until its suspension in June 2019. Wealth publications previously reported on this case exclusively.
Investor Claims Swell in Hargreaves Lansdown Case
RGL has been actively building its case and recently added 1,700 claimants, bringing the total to approximately 8,300 investors. The average claim is estimated at £20,000 (including interest), potentially pushing the total claim value beyond £200 million.
High Court proceedings are scheduled to commence in late May, with all claims to be formally presented to HL. A deadline of April 30 has been set for Hargreaves Lansdown customers to join the legal action.
Join the Woodford Investor Claim
Individuals interested in participating in the claim can visit woodfordlitigation.com. This includes those who had exited the fund before its suspension. Joining is free, with RGL taking a percentage of any successful claim payout.
For those seeking to recoup losses from the Woodford scandal, this represents a final opportunity to pursue compensation.
Pet Insurance Provider Pays Out After Claim Dispute
In a positive turn of events regarding pet insurance, a provider has reversed its decision to deny a claim, following media intervention.
Perfect Pet Insurance has agreed to pay £761 to policyholder Patrick Derrane after initially refusing his claim when his dog, Ted, was struck by a vehicle. This reversal follows media coverage of Mr. Derrane’s case.
Dog Accident Claim Initially Rejected
Mr. Derrane, a London taxi driver, and his wife Clare, a nurse, regularly exercised their nine-year-old Schnoodle, Ted, off-leash in a local park in Banstead, Surrey. In January, Ted ran out of the park and into the road where he was hit by a car.
Despite Ted’s quick recovery after veterinary treatment, Perfect Pet declined Mr. Derrane’s claim, citing a failure to exercise ‘proper care and attention’. Mr. Derrane contested this decision and cancelled his policy.
Public Feedback Prompts Insurer U-Turn
Following media reports and Mr. Derrane’s online review on Trustpilot, Perfect Pet reconsidered its position. Their ‘customer resolution team’ acknowledged that local regulations did not mandate leashing dogs in the recreation ground where the incident occurred.
Consequently, Perfect Pet agreed to pay £761, after deductions.
Insurance Firm Seeks Removal of Media Reference
However, Perfect Pet requested Mr. Derrane to remove mention of the media coverage from his Trustpilot review. The insurer argued this reference was promotional and breached website guidelines – a claim perceived by some as disingenuous, suggesting the company sought to avoid wider awareness of their initial claim denial and subsequent reversal.
Industry Seeks Curbs on Cash ISA Tax Benefits
Despite expectations that the Chancellor’s Spring Statement would not diminish tax advantages for savers utilizing Cash ISAs, pressure from the investment industry for changes persists.
Investment platforms and asset managers are advocating for a shift away from cash savings towards investment-focused ISAs, aiming to capture a larger share of the ISA market.
Debate over Cash vs. Investment ISAs Intensifies
Recent data highlights that cash ISA savers received £2.1 billion in tax relief in the tax year ending April 5, 2024. Simultaneously, analysis from Plum suggests investment ISA holders have accumulated pots significantly larger than those in cash ISAs – framing investment as superior to saving.
However, for many households, Cash ISAs remain a cornerstone of their financial stability.
Protecting Cash ISA Choice for Savers
Phillippa Cardno, Chief Executive of Newbury Building Society, emphasizes that numerous individuals cannot afford to risk their limited savings in investment ISAs.
It is crucial to preserve the option for individuals to allocate their £20,000 annual ISA allowance to cash, investments, or a combination of both.
Restricting cash ISAs to benefit the investment industry’s profitability would be detrimental to ordinary savers. The freedom to choose cash ISAs must be maintained.