Hargreaves Lansdown’s boss Chris Hill quits after claims linked to the Neil Woodford scandal

Hargreaves Lansdown’s boss has stepped down just days after lawyers kicked off a claim against the business over its involvement in the Neil Woodford scandal. 

Chris Hill announced he would be retiring from the FTSE100 company after almost six years in charge. 

The move came as the financial services giant faces a lawsuit and the result of a probe by the City watchdog into the Woodford debacle. 

Chris Hill announced he would be retiring from the FTSE100 company after almost six years in charge

Hill, 51, said he was handing over the reins as Hargreaves Lansdown (HL) embarks on its ‘next phase’ of growth. 

If he had stayed to see through this plan, he would have been at HL for a decade, the company said. But his successor faces a tough ride, after litigation company RGL Management filed a claim against HL in the High Court on Friday on behalf of an initial 3,200 investors caught up in the implosion of Woodford’s investment empire. 

The lawsuit is the first to target the Bristol-based company, which was one of Woodford’s most influential backers. Shares dipped 1.9 per cent, or 15.8p, to 796.6p yesterday. 

HL was one of the first businesses to come under scrutiny when the Woodford Equity Income Fund (WEIF) imploded in 2019. It had recommended the troubled fund to its customers through its socalled ‘best buy’ list right up until WEIF was suspended in June 2019. 

Around 133,000 HL customers were directly invested in WEIF, many of whom blamed the investment platform for promoting Woodford after they suffered heavy losses. 

HL was one of the first businesses to come under scrutiny when the Woodford Equity Income Fund (WEIF) imploded in 2019

Just weeks before WEIF was shuttered, HL’s now-retired research boss Mark Dampier told customers: ‘We think [Woodford’s] still got the skill to deliver excellent long-term performance.’ 

But thousands more were also indirectly exposed to WEIF because they invested in HL’s so-called ‘multi-manager funds’ pots of money managed by HL which spread customers’ cash across a variety of recommended funds, including WEIF. 

In total, it is thought around 300,000 HL customers might somehow have been exposed to Woodford’s investment empire. Experts criticised HL – founded in 1981 by entrepreneurs Peter Hargreaves and Stephen Lansdown – for recommending WEIF for as long as they did. 

For several months in the runup to its collapse, the fund’s performance had been poor – and there were signs that Woodford was starting to alter his strategy to invest in riskier, earlier-stage companies. 

When the fund was eventually closed down due to the trouble these issues caused, Hill was forced to apologise to HL customers. 

Now the firm’s conduct will be under scrutiny in the lawsuit brought by RGL – which is also targeting Link Fund Solutions, the business which was supposed to be supervising Woodford’s management of WEIF. 

RGL is pursuing total damages of more than £100m, and Woodford victims are still able to join the case. HL is also nervously awaiting the outcome of the Financial Conduct Authority’s (FCA) probe into the Woodford saga. 

Though it has not yet released its report, the FCA has already fined Link after its attempt to merge with Canadian rival Dye & Durham forced the watchdog to speed up its judgment. Link will be forced to hand out up to £306m of redress to WEIF victims, and pay a further fine of £50m. HL declined to comment on the Woodford probe. 

Hill, who initially joined in 2016 as chief financial officer and was promoted to chief executive in 2017, said he had been ‘privileged’ to lead HL during an ‘unprecedented time of change’. 

Yesterday, the business revealed it had made revenues of £162.9m in the three months to September, up 15 per cent on the same time last year. It also pulled in 17,000 clients over that time and generated £700m of new business. 

James Allen, an analyst at City broker Liberum, said the update ‘shows that underlying trading at Hargreaves continues to be weak, but is more than saved by higher interest rates’.

This post first appeared on Dailymail.co.uk