There’s no such thing as a free read.


Paul Lewis highlights two articles in the Times this week which take aim at SJP and Hargreaves Lansdown for losing their clients money. I read both articles and ended up wondering whether I’d buy a subscription to the Times to read more.

The SJP article is about a woman who invests in an Enterprise Investment Scheme which – had it worked – would have made a her a lot of money (including a lot of tax relief). It didn’t work and she’s lost most of her money (except for some loss relief). On the face of it , this is rather like moaning that you bet the money on the hot favorite for the 2000 guineas, only to lose it all as the horse’s stable mate beat it to the post.

But the woman claims she was misled into thinking she was making the investment through SJP, when infact the investment was via an associated company that invested via another intermediary into an Italian wind farm – and this complicated intermediation wasn’t properly explained (or maybe was deliberately concealed). Those of us who have worked for SJP or Allied Dunbar or Hambro Life, know this kind of thing happens. As Paul Lewis says, it’s a product of “restricted advice” where introductory agreements abound but where the complexity of intermediation can lead to disputes – especially when things go wrong.

The Hargreaves Lansdown is simply about the cost of using Hargreaves Lansdown (which is expensive). I suppose the same can be said for shopping at Selfridges or Harrods rather than Tesco’s or Furniture Store. Hargreaves owners are rich because they are seen to provide value for this money by those who use the service.

All of which gets me saying to myself “so what?”.

People who invest their retirement savings into an EIS which could produce big returns, but could lose the lot are either being scammed or are consciously taking a risk. The woman’s complaint seems to put here somewhere between the two positions which makes me wonder if she is complaining about the management of the wind farm company, the due diligence of Octopus who promoted the investment, the due diligence of the firm that made the introduction to Octopus or the disclosure of this long chain of intermediaries by her SJP adviser.

Perhaps the “anonymous fan” is right and Paul doesn’t understand which of all the many things that could have gone wrong here, went wrong.  But isn’t the point that Paul is making that there really is so much that can go wrong with this web of advice and introductions, that it’s best to keep things simple. No one wins here.

But is this really representative of what is happening within SJP? Let’s hope that we hear the sequel to the story, once SJP has worked out who was responsible for what and what Geraldine Westbrook was actually told. Maybe that will be behind the Times’ paywall.

The criticism of Hargreaves Lansdown

For as long as Hargreaves Lansdown has been around, it has been blamed for being more expensive than its rivals but employed by financially sophisticated people for being more expensive than its rivals. In the world of self-invested personal pensions, it seems people rather like paying “too much”. The same can be said of discretionary spend on SJP.

So we are back in the complex world of value for money for luxury items such as advice and self-investment into complex financial instruments. If the only denominator of VFM was the money, then Hargreaves Lansdown would have no customers. But clearly it isn’t and clearly price comparison sites aren’t much good for high-end customers who are “value driven”.

It seems to me that the majority of the problems people have with Hargreaves Lansdown come down to them buying functionality that they pay for and don’t use. The flat fee is designed to give people a lot of functionality- rather like a posh gym. If you don’t turn up to the gym or only loll about in the communal areas, then you pay too much. If you beaver away and print out your Watts/Calories burn for every session, then you are a happy gymnast. Most people are happy enough to be a member of a gym that the hoi-poloi can’t afford. I guess that’s why they pay to get their financial news from the Times.

The Times’ position on all this

People who read the Times are typically the people who take out expensive gym memberships, go to SJP sponsored polo matches and use Hargreaves Lansdown. Which makes these articles relevant and readable.

While the Times has been banging away at SJP and Hargreaves Lansdown, the two businesses have been powering ahead.  The rich get richer because of them and though I am not recommending my friends use SJP and Hargreaves Lansdown, most of them do!

So you might call the Times’ campaigns to expose SJP and Hargreaves Lansdowne’s weaknesses , as failed. But of course they aren’t. Because every time one of these articles appears in SJP or Hargreaves Lansdowne’s press clippings , it has a positive impact. The same can be said for Paul Lewis, who appears to be the social media maven for the thunderer these days. Which is a little restrictive itself!

Paul doubtless gets paid for publicising the Times and that costs gets picked up in the cost of a Times subscription (which you can avoid by clicking on Paul’s free links). The Times gets paid by our subscriptions. Sadly, there is no such thing as a free read, even if you are reading my blog (which is of course one of ten websites and blogs every investor should bookmark – according to the Times).

Be happy!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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