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MPs probe Hargreaves Lansdown on Woodford relationship

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MPs have asked Hargreaves Lansdown to explain it links to Woodford Investment Management after the broker continued to recommend the suspended Equity Income fund to clients until recently.

Nicky Morgan, chair of the Treasury Select Committee, has written to Hargreaves’ chief executive Chris Hill demanding answers about the broker’s commercial relationship with the suspended fund.

MPs have also written to the city regulator this week amid concerns it was slow to react to the Woodford situation.

On Monday, Morgan wrote to the Financial Conduct Authority (FCA) asking for details of its contact with the Woodford fund, and whether it will investigate the events that led to the suspension of the fund.

Trading in the Woodford Equity Income fund was suspended on 3 June after an increase in demand from investors wanting to withdraw their money.

Hargreaves Lansdown clients have been major supporters of Woodford, with clients holding 31 per cent of the Equity Income fund at the end of 2018.

Hill apologised to clients locked in the fund last week, saying he shared their “disappointment and frustration”.

In her letter to the broker on Tuesday, Morgan asked Hargreaves to explain how many clients were exposed to the fund and for details about its engagement with Woodford Investment Management in the run up to the suspension.

She also asked a series of questions about how long the fund had appeared on the firm’s recommended Wealth 50 list, and how the continued inclusion of the fund is considered.

She also questioned how much money Hargreaves made from fees for money its clients held in Woodford Equity Income.

Morgan has given Hargeaves and the FCA until 18 June 2019 to respond.

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