You wait years for Hargreaves Lansdown to revamp its best buys list, and then three come along at once.
It is rather staggering that the move from the Wealth 150 to the Wealth 50 was only 18 months ago, and at the time was considered something quite revolutionary.
There were some swanky graphics outlining how funds were selected, and lots of explanations as to why Fundsmith was not on the list, and why Woodford Equity Income was.
Then post-Woodford we had another minor reshuffle amid some soul-searching at HL and finally last week we got a further grand relaunch.
Last year I joked that the Wealth 50 was the biggest misnomer ever as it was not 50 funds, and was not particularly wealthy either.
The bigger accusation towards HL was always that funds were picked based on the discount customers received: offer one and you are on; do not offer one and you are off the list.
But the Woodford scandal threw the spotlight on more worrying problems with governance.
That Neil Woodford breached liquidity limits within a month yet did not have to report it because he was not still in breach at the end of the month, revealed a weakness in the HL relationship withMr Woodford.
The same goes for the fact HL did not know about the Financial Conduct Authority’s visits to Mr Woodford. And then there were the conflicts of interest as its multi-manager team reduced positions in Woodford while the fund still appeared on the best buys lists.
I am sorry to use the W word so often; I know we are all tired of it but these things are important when looking at where HL has got to now with its new Wealth list.
On the most simplistic level it has abandoned the number 50.
It has also allowed funds onto the list that do not have a discount — which should prove an important first step in removing claims of bias. Actually, some 1,700 fund share classes out of more than 5,000 offered by HL have a discount, so this was rapidly becoming a moot point.
The bigger accusation towards HL was always that funds were picked based on the discount customers received: offer one and you are on; do not offer one and you are off the list.Most importantly, though, HL is trying to set a high bar for governance. “That’ll do” is no longer the mantra.
Rather funds are being told “that’s not enough”. This is what Fundsmith has discovered, which is the most notable absentee from the new Wealth list.
HL says the equity fund would have made it on performance, and certainly on the basis that it has a very clear, easy-to-understand investment philosophy.
But on governance, because it does not report full holdings and liquidity often enough to pass HL’s own measures, it is not on the list.
I bet Terry Smith cares not a jot; there is more than enough pouring in to his fund. It sends an important message though to the rest of the industry: that there should be standards when it comes to accountability.
This is an important step for HL in terms of shaking off what has gone before. And from clients I know, the fees have never been an issue.
They have always been happy to pay more because the service has always been good. And when you have a proposition like that it can be hard for others to compete.
Unhealthy split
Mortgages are the new financial apartheid.
If you have plenty of equity and a regular job then loans are cheap and affordability is good.
Now we are on the market and may be about to move. Frankly, we keep getting it wrong.If you have only got 10 per cent, then you probably should not bother. Just like the battle of the ages over who should pay for this crisis, the debate is equally polarised.
Young people think this is grossly unfair and in some cases are being forced to eat into their deposits to get them through unemployment. The older ones think the young ones have been feckless and besides, “they’ve not lived through 15 per cent interest rates”.
Whichever side you fall on, it is not healthy for the housing market. Without one side functioning properly, the other quickly falls apart too.
Moving on
The funny thing about moving house is that it is something I have written about so often, but have never done. I have bought one house and am still in it, so moving (until recently) was largely theoretical.
Now we are on the market and may be about to move. Frankly, we keep getting it wrong.
Bids are made at the wrong time and I am not sure of the order you do things. We must sound like amateurs — no wonder landlords have always got the upper hand when buying property.
James Coney is money editor of The Times and The Sunday Times
@jimconey
