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In defence of preferred lists: Mark Dampier hits back at Nic Cicutti

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As creator of Hargreaves Lansdown’s Wealth150 list and one of the people who worked hard to shape the Wealth150 Plus list, I take issue with Nic Cicutti’s article.

I resent suggestions, direct or implied, that the list is chosen on a commercial basis. I believe the quality of this list stands out, although inevitably I do not expect everyone to agree with every selection (especially those who have a commercial interest in knocking HL).

The FCA regularly interviews platforms about the compilation and constituents of ‘preferred’ lists such as ours and we are unsurprised the regulator is doing so once more. HL has not been “forced” to explain anything recently – we’ve been explaining for the last 10 years to those interested in listening.

What has surprised me this time around is just how few commentators have bothered to take the time to ask myself or Lee Gardhouse (HL’s investment director) anything about the funds and the managers selected. Fewer have taken up the open invitation to visit HL’s offices and be run through the databases and systems behind the analysis – the invitation is still open by the way.

Prior to RDR HL was attacked for the list not being transparent on charges. Now it is transparent, yet we are still criticised based on cynicism and “suspicion”. HL was the only platform to openly ask groups for their best prices for its clients, although other investors have also benefited from our negotiations.

Independently, we looked for what we believe to be the best funds looking forward, aiming for the ‘best funds at the best prices’. It would have been very easy to have filled the list with lesser funds at much lower prices but we did not, as they did not meet our performance criteria.

Equally, it would have been easy to fill the list with the latest top performers, reducing the risk of criticism for daring to back out-of-favour managers. However, we are playing the long game and believe the quality of our overall offering will continue to show through.

The performance record of the Wealth 150 since 2003 speaks for itself. We believe our initiatives to bring prices down compliments our record of picking winning funds and should be applauded, not bemoaned and we believe investors who back our selections will do well in the future as they have in the past.

Mark Dampier is head of research at Hargreaves Lansdown 

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. “we’ve been explaining for the last 10 years to those interested in listening.” – May be so, justification before scrutinisation? The fact you have had to do this for 10 years suggests something is not right… hence the cynicism of others.

    as someone said yesterday “when is advice not advice – when its a wealth list!”

  2. goodness gracious 14th March 2014 at 3:06 pm

    So HL are whiter than white, everything is fine and dandy and we really do work in the client’s interests. How do HL make their money? Platform fees, higher than most of the platforms advisers use, but without the on going advice charge. Lower amounts invested may have additional fees as well.
    So what do you get for this service? A direct access platform with a few bells and whistles on top.
    What advice and guidance do I get when choosing where to invest my money? ‘None whatsoever, we don’t give advice unless you pay extra’. ‘However, you may be interested to glance at our Wealth 150 plus list as we have a load of funds on there we have researched, and they tend to do what they say on the tin. Each one is risk rated and a combination of funds if chosen from different segments, could reduce risk, but we take no responsibility if you make stupid choices’. ‘We also have negotiated reduced charges for those on this list so when combined with the platform fee, overall it does not look so expensive. Please look at our suggested asset allocation charts as well, as these can point you in the direction of our 150 plus list.
    I would have no quibble if most people I speak to that use HL, say they independently researched some funds then bought them via HL, but most say they chose because HL recommended the fund. Unadvised clients don’t know what is advice, guidance or recommendations. Most are also disappointed with performance as they don’t know what they are buying.
    By all means have a platform, give instructions about how to buy and sell as well as costs for each fund, that’s fine, but stop giving non-recommendations, let your clients do the work. If they don’t know, let them seek proper advice.

  3. Preferred list are quite simply “advice without responsibility” Fortunately no one can really pick winners over any extended period of time so an investor buying from HL would hardly be likely to do significantly worse than one being advised if charges for the platform were not so high. Investors are buying direct from HL to in order avoid the expense of on going advice. For many there are cheaper and better ways to invest direct.

  4. Two words…sour grapes. If advisers hadn’t alienated most financially astute consumers over the last few decades HL would not be as successful as they are. Well done HL I say.

  5. I take issue with the spurious comments form Nic Cicutti as I did when he claimed to be a ” journalist ” for ” financial adviser”, or “money marketing”, two papers which relied on the sponsorship of product providers – and he consistently ” slagged ” off advisers to their persecution. Clearly he has his own personal interests at the heart of his spurious comments – rather than an ability to deal with Facts. One of the major benefits of Hargreaves Lansdowne – is their ability to carry out research – not something in which Mr Cicutti cares much about or it appears conducts. I terminated my financial adviser and money marketing rather than read the poor quality reporting and inaccurate statements …..heaped on advisers and companies who are successful . . .for their clients . . .for their advisers . . . and are profitable. Two such companies are Hargreaves Lansdowne and St James Place – who have served more clients very well, operate a professional and profitable companies – than it appears the rest of the industry put together . . . . .I can only work form my experience of the blackmail by Standard Life to remove my agency – if I continued to request the costs and charges of their pension schemes for and on behalf of my client. Sir Sandy Crombie terminated my agency to new business – with the agreement of the Board of Directors which I assume includes David Nish. Destroying competition by Standard Life and Nic Citcutti – is their commercial aim – to only have Tied Agents and Restricted Advisers – to remove Independent Financial Advice . . .. or companies offering the results of their research to those who may not wish to go through an adviser – or deal with companies who lack integrity and lack professionalism. I am most grateful to have found Hargreaves Lansdowne – when Scottish Widows retirement benefits Scheme ( SWRBS – the internal pension scheme for SW Employees ) – as a result of Fraud a result of Blackmail and the Directors refusal to deal with Formal Complaints – and their protection of fraud and corruption at Scottish widows – The SW Trustees and the Scottish Equitable ( now Aegon ) fiddled the figures and stole part of my Cash Equivalent. I was transferring our of the SWRBS Final Salary Scheme – because I could not Trust SW Directors or Chairman – to act with any integrity or professionalism ( They had three years to sort out their mess – and refused ). I transferred into Hargreaves Lansdowne – I am happy to pay their fees – because the benefit and Peace of Mind I have from Hargreaves Lansdowne is most important to me. As a customer I a treated with respect – rather than contempt. My pension fund is well managed . . . .I am required to take excessive risks – after having my pension fund stolen by SW Trustees ( Like Robert Maxwell ) – and I have the peace of mind that the research provided allows me to choose the level of risk I wish to take. I take responsibility for this based on the information provided – but at least it is provided – not hidden as it is in Scottish Widows and Standard Life. Hargreaves Lansdowne operates on a basis of the provision of information in an open and transparent manner – successfully. If a client does not like the charges, or if they do not like the service – they are free to go elsewhere. I take responsibility for the investment – I have control and I am given information necessary. If I want additional information I can pay for it . I believe this service to be great value for money ( and I could transfer my SWRBS pensions for commissions – as I did when transferring from Scottish Widows to Scottish Equitable commission paying office ). Rather than take commissions because I did not need commissions I enhanced the benefits in lieu of commission to make up for the poor investment performance of SWRBS – and untrustworthy incompetent SW Trustees ( I.E SW Directors and Management) . There is a cost of having Trust ! Can it be identified in financial terms or a monetary amount ? I do not believe so. Hargreaves Lansdowne has earned the Trust of millions of people – Nic Cicutti has yet to earn any trust . Well done and thanks to Peter Hargreaves and all the employees at Hargreaves Lansdowne . I prefer to pay more for such a service – to know we have good management looking after OUR cash.

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