Hargreaves Lansdown’s chair is about to leave the position after serving in it for more than five year. This comes following criticism by the co-founder of the company and its largest shareholder regarding rising costs and falling share prices.
The UK’s largest retail investing site, which became its chairperson in 2018, has begun a search for a new leader to replace Deanna Oppenheimer.
Sky News first reported the decision to begin succession planning. Peter Hargreaves had launched an attack on the company’s costings and plans for a new automated advice service earlier this year.
Hargreaves co-founded the company in 1981, and he remains its biggest shareholder, with a 20% stake. He said in January the board “indulged completely unnecessary irrelevant programs”, adding that “it is hardly surprising that the shares have crashed”. The company’s shares have dropped by 65 percent since a peak of £24 per share in May 2019.
board members Dan Olley and Chris Hill are preparing to replace each other as CEOs of FTSE 100 companies early next month.
Hargreaves Lansdown stated that the company’s December annual meeting would mark Oppenheimer’s sixth year as chairman and that the start of the succession process was “good governance”, especially since the transition to the new chief executive is underway. Oppenheimer also serves as chair of the hotel group IHG, and is a director at Thomson Reuters. The Bristol-based firm offers investment, savings and pension products to retail investors. It manages over £120bn for more than 1.7mn clients. The company’s automated advice service is a step between the “do it yourself” option and a more expensive consultation with a financial advisor.
Peter Hargreaves, however, said earlier this year automated advice may not be able to accurately account for the risk level customers want to take and can lead them to the wrong investments.
He criticized the cost of the project, which was part of a larger overhaul of the systems of the company. The company said that the majority of the £175mn is spent on upgrading Hargreaves Lansdown’s IT. Only a small amount was used to develop the automated advice.
He said that the company needed to “undertake a massive round of cost cutting” and that “at least 1,000 employees were employed that they didn’t need”. He also criticised “ridiculously high salaries” for board members.
According to the annual report of the company, Oppenheimer received £334,500 by 2021. She didn’t respond to requests for comment.