Hargreaves Lansdown has railed against the adverse impact of government inaction and regulation on the funds industry, saying the situation has gone “completely mad”.
Speaking to Fundweb today following the platform’s annual results, Hargreaves Lansdown co-founder and executive director Peter Hargreaves says UK regulation has “gone mad” for many industries but especially the funds sector.
He says: “Clearly, the funds industry has borne the brunt of this regulation. A good law I would pass if I was in charge would be to repeal every bit of regulation that’s been enacted over the past 15 years. It is crazy.
“For every single fund we suggest in our Investment Times, we have got to send the full key facts literature. That’s two sides of stuff which no investor will ever read but we have to send it out.”
Hargreaves points out it is often simpler to tip a share, which is deemed a risky investment, or sell a with-profit bonds, which he labels “one of most opaque investments”, than it is to recommend a fund.
“Funds, which are transparent, have been hit with all the regulation. It is easier to see what is going on with funds, so they decided to regulate against that – the bits they couldn’t see were too difficult to regulate against.
“This means some brokers are going to be selling the bad and the opaque because actually they can earn more money out of it.”
In the platform’s preliminary results to 30 June, published today, chief executive Ian Gorham says Hargreaves Lansdown’s successes to date have come “despite regulation and government apathy in supporting investing”.
Gorham says: “It is easier to promote gambling, alcohol or payday loans to the UK public than the concept of investing in reputable investments or financing British companies to support our economy. That needs to change.
Gorham also reiterated calls for the Financial Conduct Authority and other bodies to do more to support the UK’s funds industry.
He says “The FCA, working with the Treasury, has the opportunity to take a fresh look at achieving sensible regulation and make it easier to encourage the UK public to invest.”