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The chair of Hargreaves Lansdown is preparing to step down after more than five years in the role, following criticism from the company’s co-founder and largest shareholder over rising costs and a falling share price.
The UK’s largest retail investment site has started a process to find a successor for Deanna Oppenheimer, who became chair in 2018.
The decision to start succession planning, which was first reported by Sky News, comes after Peter Hargreaves launched a scathing attack earlier this year of the company’s costs and plans to launch an automated advice service.
Hargreaves, who co-founded the business in 1981 and remains its largest shareholder with a 20 per cent stake, told the Financial Times in January that the board had “indulged in completely unnecessary irrelevant programmes”, adding “it’s hardly surprising the shares have collapsed”. Shares in the company have fallen about 65 per cent from a high of £24 in May 2019.
The succession process comes as board member Dan Olley gets ready to replace Chris Hill as chief executive of the FTSE 100 company early next month. Hill will remain on the board.
Hargreaves Lansdown said the company’s annual meeting in December would be Oppenheimer’s sixth as chair and that it was “good governance” to start the succession process, especially as the chief executive transition is under way. Oppenheimer is also chair of hotel group IHG and a director of Thomson Reuters.
The Bristol-based company offers investment, pensions and savings products to retail investors and manages more than £120bn on behalf of more than 1.7mn customers. Its planned automated advice service would be a step up between “do-it-yourself” investing and the more expensive option of a consultation with a financial adviser.
However, Peter Hargreaves said earlier this year that automated advice did not necessarily correctly account for the level of risk customers wanted to take and could lead them into the wrong investments.
He criticised the expense of the development, which is part of a broader overhaul of the company’s systems. Most of the £175mn expenditure is aimed at upgrading Hargreaves Lansdown’s IT, with only a small portion used to develop its automated advice, the company has said.
He also said the business needed to embark on “a huge round of cost-cutting” and had employed “at least 1,000 people that they don’t need” and criticised company boards that are “on ridiculously high salaries”.
Oppenheimer was paid £334,500 in 2021, according to the company’s annual report. She did not respond to request for comment.
