CompaniesSep 9 2015

Hargreaves Lansdown hit by £3.6m FSCS levy increase

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Hargreaves Lansdown hit by £3.6m FSCS levy increase

Hargreaves Lansdown has reported total revenues for the year to the end of June rose 10 per cent to £395m, although pre-tax profits fell by 5 per cent to £199m.

The operating profit at the online investing group and financial adviser declined by 5 per cent to £198m.

Hargreaves also earned less interest on the cash it holds in clients’ portfolios during the year.

The drop off in profits came despite clients and assets growing substantially.

According to management the profit faced several headwinds - the decision to reduce charges for clients (reduced revenue by about £20m versus 2014); lower interest margins on client cash (reduced revenue by about £17m versus 2014); lower stock markets as the FTSE All Share fell 0.8 per cent in the year; an unexpected temporary hiatus in foreign exchange trading income (about £3.5m); and a charge for a contribution to the Financial Services Compensation Scheme to cover the failings of other companies (a cost of £4.4m versus £0.8m in 2014).

Hargreaves Lansdown has also seen co-founder Peter Hargreaves, who started the business in 1981, quit the board in April while the company changed its chief financial officer last month.

Ian Gorham, chief executive of Hargreaves Lansdown, said the business had delivered another year of great growth for Hargreaves Lansdown, against a backdrop of stock market angst and low investor confidence.

He said: “The new freedoms have put pensions back on the public’s radar and helped us to a further 13 per cent growth in clients and 18 per cent in assets during the year; assets have now passed £55bn and client numbers are now approaching 750,000.

“Hargreaves Lansdown remains the clear market leader in personal investing in the UK, and we thank all our clients for their continued support.”

Hargreaves Lansdown operates a direct to investor investment service administering more than £55b of investments in Isa, Sipp and investment accounts for 736,000 active clients.

The business has been operating since 1981 and currently provide execution only, advisory services and third party investments for individuals and corporates.

emma.hughes@ft.com