Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
P.B. writes: In January 2023, my wife began a regular monthly investment into her Hargreaves Lansdown share account. Last October, Hargreaves Lansdown asked about the source of the funds. She provided a clear answer and was told this was the end of the matter.
However, they wrote again, asking for the same information and threatening to cancel her investment and restrict our other accounts. We complained and they apologised and paid us £500, but then said they wanted details of the source of all her funds going back 21 years.
Tony Hetherington replies: By the time you contacted me, Hargreaves Lansdown had already frozen your wife’s accounts and refused to allow withdrawals. As well as her share account, the pair of you have pension plans and Individual Savings Accounts (Isas) with the firm, where you have been customers since 2003.
You might think that after two decades, Hargreaves Lansdown would know enough about you, but in March this year your wife was asked to reveal ‘the full source of payments which have funded the account since its inception’.
She opened an Isa in 2003, a self-invested personal pension in 2005, and a share account in 2007, and the brokers insisted they ‘would require evidence/information for each of these accounts from these relevant dates’.
Hargreaves Lansdown is an investing and savings service that employs over 2,000 people
You asked me: ‘Can it be right that our Isa contribution of £7,000 from 2003 is now denied to us by way of capital withdrawal because we may not have evidence of its source of funds 21 years later?’
Hargreaves Lansdown told me: ‘Clients are not expected to keep proof of all their financial records.’ But, ominously, they added that they do expect clients to be able to provide an employment history, details of any inheritance, and evidence such as bank statements showing salaries. It became clear that Hargreaves Lansdown was using its anti-money-laundering team to conduct its investigation.
What attracted their attention was that your wife was paying a remarkable £10,000 a month into her share account. The brokers wanted to know where she got this money. And the answer, ridiculously, was that it came from cash she held in a different account with Hargreaves Lansdown itself.
The money was transferred to your bank and then back to the brokers each month for investment in an index tracker fund. What was the point? Well, one good reason was that Hargreaves Lansdown charged no fees for a regular investment from an outside account.
And where did this cash come from? It came four years ago from many years of investment in shares, which your wife turned into cash when Covid struck. And where were all these shares held over those many years? Where else but Hargreaves Lansdown!
An ISA, or individual savings account, is a tax-free way of saving or investing. The two main types are cash ISAs and stocks and shares ISAs
One of the broker’s managers agreed your reinvestment scheme made perfect sense. But more recently, perhaps after realising you had found a way to sidestep fees, the firm decided this was ‘an improper use of our service’.
I asked for clear answers. Should clients keep personal financial records forever? And why did the firm not ask its questions when your funds were first deposited?
Hargreaves Lansdown said clients are not expected to keep records for ever, but fudged this by adding that it would carry out ‘enhanced due diligence’ when necessary. As for asking questions earlier, the reply was that the questions only arose after the reinvestments began.
Hargreaves Lansdown is still demanding full details of your wife’s employment over the past 21 years, including salary figures and other income. You refused to meet the firm’s deadline last Monday, so by now I fully expect the brokers to have frozen your funds again.
When there is a final outcome, I shall report it, but right now there is a brick wall which can only serve as a warning to the firm’s other clients.
We’re watching you
A crook who cheated investors out of more than £1 million has been jailed for five years and eight months at Basildon Crown Court.
Ross Perry, 44, pleaded guilty to fraud involving his company Global Water Group Limited.
He claimed the business had a successful six-year track record, and that it belonged to ‘a high level network of investors in, and advisers on, issues related to water supply whose members include heads of state, leaders in the global water industry, leading universities and academic institutions, wealth management firms, philanthropists, pension funds and high net worth investors’.
I warned in 2021 that Perry was already known to me. In 2012, he had been a director of Elite Asset Exchange, which marketed investment in storage units before it went bust. And in 2013, he was a boss of London Green Financial, a scam business which promoted investment in carbon credits before it too collapsed.
Police are tracing Perry’s assets so they can be seized to compensate his victims.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk.
Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.