Hargreaves Lansdown saw new business inflows up by almost a quarter during the second half of last year, from £2.25bn to £2.77bn.
The Bristol-based firm’s interim results for the six months ended 31 December 2015 also showed growth in active client numbers, increased by 47,000 to 783,000 during the period.
This meant assets under administration hit a new record high, up 7 per cent since the end of June to £58.8bn, against a backdrop of a fall in the FTSE All Share of 3.5 per cent.
Chief executive Ian Gorham commented that as the majority of its income is derived from fees related to client assets, lower stock markets can reduce short-term income.
“However, despite lower markets, net revenue increased by 10 per cent, driven by additional new clients and assets, growth in our multi-manager funds and stabilisation of interest receivable on cash.”
However, costs did increase during the six month period, reflecting investment being made in a number of new enhancements, including new staff to develop our HL Savings cash deposit and peer to peer business.
These staff costs were up by 19 per cent (£4.8m) on the comparative half year, and increased 10 per cent on the second half of 2015 (£27.6m).
Elsewhere, revenue margin on funds held on the Vantage platform fell slightly, in line with expectations, to 0.45 per cent, from 0.47 per cent in the first half last year.
As highlighted previously, renewal commission on funds and the related client loyalty bonuses will cease from April, as stipulated under the sunset clause.
Therefore, from 6 April, the sole revenue received from funds held by clients will be the tiered platform fee, which Hargreaves anticipates to be 0.42 to 0.43 per cent a year.
The statement noted that following successful launches of three multi-manager funds last year, the firm intends to launch a further two new multi-manager funds later this year, a HL Strategic Assets fund and a HL High Income fund.
Mr Gorham stated that there are currently no plans for changes to pricing that would materially affect revenue or profit.
“Progressively lower interest rates have been a recurring theme since 2012, reducing income over that time,” he said, adding that these falls have now abated and he does not therefore expect interest income to fall further.
“For the rest of the financial year 2016 the directors expect interest rate income to continue in the previously guided range of 0.5 to 0.6 per cent.”
peter.walker@ft.com
