CompaniesSep 4 2013

Hargreaves hails superclean success on Wealth 150 deals

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

Hargreaves Lansdown has broken recent industry silence over platform ‘superclean’ shares negotiations, proclaiming success in its move to drive down costs by announcing that close to 70 per cent of Wealth 150 funds have signed deals that will reduce costs for consumers.

In a preliminary results statement published alongside its annual results this morning, the firm said that 67 of the 98 funds that are currently in the Wealth 150 list have agreed a bespoke deal with the platform that will be cheaper than the standard clean share class.

The firm stressed that the Wealth 150 is not a buy list and attempted to head off criticisms over a potential conflict of interest that could see fund groups supply better terms in order to remain on the list by stating it “is a dynamic and investment led list and will remain so”.

The announcement comes on the back of positive results for the company, with the preliminary results statement suggesting profit before tax has risen 28 per cent to £195.2m in 2013 compared to £152.8m in 2012.

Revenue was also up 22 per cent, reaching £292.4m for the year compared to £238.7m for the preceding year. Total assets under administration stand at £36.4bn, up 38 per cent year-on-year from 2012’s £26.3bn.

The company said it took on 76,000 new clients during the year bringing its total to 507,000. It added that it enjoyed a £500,000 refund from the Financial Services Compensation Scheme after challenging the levy award for 2013.

Hargreaves chairman Michael Evans said in the statement: “During the coming year, to meet new regulation in the form of the Retail Distribution Review and the end of the commission era, we shall change the company’s pricing model. This change will mainly be limited to clients holding fund investments.

“We shall offer funds with lower annual management charges and at the same time introduce charges for the service we provide.”

Ian Gorham, chief executive of Hargreaves Lansdown, said: “Throughout Hargreaves Lansdown’s history the cost of retail investing, including our own charges has reduced over time. We will continue to share the benefits of scale, technology and success with our clients in a virtuous circle.

“Our clients have previously rewarded us with increased volumes of business for our investment and we will work hard to encourage them to continue to do so. For example, this year we have undertaken an exercise to improve discounts from investment providers, providing an additional edge in giving value to clients in return for their loyalty.”