Hargreaves Lansdown has sent a warning to its billionaire co-founder to stop publicly criticising the company.
In the latest annual report which was released last week, the firm revealed it has ‘shared protocols’ with co-founder Peter Hargreaves, to ‘ensure a common understanding of how interactions will take place’.
The ‘shared protocols’ reminded Hargreaves of a shareholder agreement that prohibits what he can say about the company in public.
Co-founder Peter Hargreaves, 77, (pictured) is still the largest shareholder in Hargreaves Lansdown just under 20 per cent
The warning comes following months of attacks from Hargreaves, one being on chair Deanna Oppenheimer, who he has accused of overseeing a ‘diabolical’ performance at the business.
Hargreaves, also launched a stinging attack on the group’s high costs and strategy, led by outgoing boss Chris Hill, earlier this year.
In an interview with the Financial Times earlier in 2023, He said: ‘The board indulged in completely unnecessary irrelevant programmes, which have distracted the firm from its prime objective. It’s hardly surprising the shares have collapsed.’
The 77-year-old is still the largest shareholder with just under 20 per cent,
In the 1980s, Hargreaves, along with business partner Stephen Lansdown, created what has become one of the UK’s biggest investing firms.
Last month, the firm reported a 50 per cent rise in its profits this year, as rising interest rates pushed customers to its savings offering.
The group said its profit before tax had grown 50 per cent to £402.7million, while revenue increased 26 per cent to £735.1million in the 12 months to 30 June.
Hargreaves Lansdown said annual revenue growth reflected an improved net interest margin as interest rates rose and more customers held cash in both their investment and savings account.
Hargreaves Lansdown shares are up 0.11 per cent to 705.80p in midday trading on Monday.
Hargreaves Lansdown has refrained from responding directly to its co-founder’s criticisms.
It is now Britain’s biggest self-directed investment platform, administering almost £135 billion of assets for more than 1.8 million clients. Hargreaves stepped down as chief executive in 2010 and then left its board altogether in 2015.
The relationship between the tycoon and the company is now governed by a shareholder agreement, which is not a public document and was drawn up in 2020. Under that agreement,
Hargreaves appointed Adrian Collins, 69, to act as his representative on the board. According to the annual report, in February the company ‘shared protocols for interactions with Peter Hargreaves and also with his shareholder representative to codify relevant obligations of each party under the shareholder agreement, relevant legislation and the [UK Corporate Governance] Code to ensure a common understanding of how interactions will take place’.
A spokesman for the wealth manager said it had made the disclosure in its report in the interests of transparency and to demonstrate ‘that our relationship with Peter and his board representative is governed appropriately’.
Hargreaves did not comment. Chris Hill, the former chief executive, started moving the business beyond its core DIY investment platform
Despite Olley taking charge and the criticisms of its co-founder, the company has said that it will continue with the strategy set out by Hill.
Hargreaves opposed the re-election of Oppenheimer to the board at the wealth manager’s annual general meeting last year, although she still secured the backing of 66.5 per cent of shareholders who voted.
Even so, the group is preparing for her departure and confirmed in July that it had ‘commenced an exercise to determine the attributes of any successor chair candidates’.
Oppenheimer has led the Hargreaves Lansdown board since 2018.
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