Royal Mail float frenzy crashes the website at Hargreaves

Online broker angers clients unable to make quick profit as shares rocketed

Hargreaves Lansdown, Britain’s biggest website for private investors, suffered a massive blow to its reputation yesterday on one of the busiest days in the history of online trading after its services collapsed under the weight of demand for Royal Mail shares.

The firm, with more than 500,000 small investor customers, saw its website crash and phonelines overloaded yesterday, when more than 100 million Royal Mail shares changed hands in its first hour of trading.

Royal Mail shares shot up from the float price of 330p to close their first day of conditional trading at 455p, but small investors attempting to use Hargreaves to turn their 227-share allocation into a quick profit were thwarted by its services crashing.

The DIY investing giant had been heavily promoting the Royal Mail shares float to its customers for weeks, but yesterday its site hosted an embarrassing admission of “unprecedented demand” all day, apologising to customers and asking for their patience.

That patience, however, cost money. With Royal Mail shares hitting a high of 459.75p in early trading, small investors who had sold their maximum £750 stake could have turned a £294 profit on their 227-share allocation.But by the end of the day, the share price had slipped back to 455p.

Clients took to Twitter to vent their anger at the broking giant, with one tweeting: “Hargreaves Lansdown talked up its service before the float and now all systems are down. Very bad news.”

Another wrote: “Total failure of Hargreaves Lansdown to cope this morning. Entirely foreseeable.” And one customer’s reaction to the site’s inability to trade was to quit its services, writing: “Bye bye HL.”

But the chief executive Ian Gorham claimed he had not been unprepared for the demand and said Hargreaves’ dealing lines had six times more staff than usual. “While clearly we predicted and prepared for substantial activity in Royal Mail shares, the volumes involved have gone off any conventional scale,” he said.

“We have six times the normal number of dealing staff working today, and continue to work hard to deal with the demand. We will keep working flat out until our normal fluent service is restored. We’d like to apologise to our clients for any issues they have experienced this morning.’”

Clients prevented from selling their stakes due to Hargreaves’ meltdown are already demanding compensation, with one tweeting: “Can’t sell shares on HL website, they don’t pick up the phone either… How do you claim compensation for losses?”

The firm, however, refused to confirm it would offer all affected investors their lost profit, saying: “If someone complains, we will take all customer complaints seriously and we will deal with them through the normal procedures.”

Rival brokers appeared to be relishing Hargreaves’ difficulties. TD Direct Investing said it had seen a record first hour of trading, 60 per cent of it Royal Mail shares, while Charles Stanley tweeted its trading website “experienced absolutely zero downtime this morning on the increased volume.”

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee