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IFAs split as Hargreaves sends out &#39sell&#39 mailing

IFAs are divided over whether clients should sell out of equity funds in the aftermath of last week&#39s US terrorist attacks and subsequent market slump.

In a mailshot distributed last Friday, Hargreaves Lansdown advised clients to bail out of poor performing investments in favour of cash or gilts.

Chief executive Peter Hargreaves said he believes US consumer spending will be hit harder than people expect, prompting a possible recession and further market shakeouts.

But rival IFAs are adamant that, with uncertainty still high, investors should sit tight until markets have settled down.

Hargreaves says: “We are telling people to grasp the nettle and get rid of poorly performing products. You get in more trouble for suggesting people sell than buy.”

Chartwell investment manager Tim Cockerill says: “I do not think that when the market is like this – if you are going to sell -you can necessarily get a fair price. There is a lot of emotion out there at the moment, and it is not a time to be leaping out of markets.”

Hargreaves Lansdown&#39s mailing also promoted its Vantage service, a move which provoked accusations of insensitivity and poor timing from across the industry. Hargreaves has since conceded that it received complaints from several clients over the mailshot and apologised.

Hargreaves says: “We sent a card out to our clients. They were concerned at the state of the market. On balance, if we had had longer we would have made it more sensitive. If it happened again, we would not send it.”

Torquil Clark marketing director Mike Attree says: “This was a normal mailshot designed to frighten people into selling. To put that priority into your head at that time was astonishing. It impinged on my grief.”

The FSA is understood to be working with global market regulators investigating claims that those behind the New York terrorist attacks tried to profit by selling shares before last Tuesday&#39s attacks.


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