PensionsAug 15 2017

Hargreaves targets pensions needy

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Hargreaves targets pensions needy

New Hargreaves Lansdown chief executive Chris Hill has said the company will target those people who need help with the complexity of their finances after the advent of pension freedoms.

He was speaking as the FTSE 100 company announced full year results showing it had increased its client base by 118,000 and taken on £6.9m of net new business. The company now has £79.2m of assets under administration, up 28 per cent. 

Mr Hill said: “At a time where people need to be taking greater involvement with their finances, pensions and savings are increasingly more complicated.

"The advent of pension freedoms, the challenges of drawdown, the complexity of lifetime and annual allowance pension caps, new dividend and savings tax structures and six different forms of Isa have all made it more difficult. People need help."

Hargreaves increased profit before tax by 21 per cent to £266m and raised its dividend to 29p a share, up 20 per cent.

Mr Hill said that although the Bristol-based company saw significant opportunities in the 44 per cent of people who already claim to manage their investments themselves, the group was also targeting the wider accessible investment market.

He said: "We might have a 38 per cent share of the execution-only UK D2C platform market but in the wider accessible investment market of over £1.1trn, in which we already operate, we have a much smaller share and an even smaller share of the relevant £2.4trn savings and investment pool.

"Our scale combined with our expertise and capabilities places us in pole position to be able to provide this help."

Earlier this month Hargreaves disappointed market expectations to pay a special dividend for the year ending in June 2017 after being told by the Financial Conduct Authority that it has to set aside more regulatory capital.

The company said it needed to set aside an extra £50m of capital because of its growth in "scale and complexity", meaning it will not announce a special dividend in its final results.

Stuart Duncan, an analyst with Peel Hunt, said: "Hargreaves’ final results this morning were consistent with the recent trading update, with both assets and profits ahead of consensus expectations. Hargreaves is a unique asset."