Hargreaves targets adviser clients for platform growth

Hargreaves targets adviser clients for platform growth

Hargreaves Lansdown is targeting clients of adviser only platforms as a source of future growth.

In its annual report, the FTSE 100 direct to consumer platform said it had assets under administration of £91.6bn in the year to 30 June 2018.

But the company said the total private wealth market in the UK was £1.6trn in size, £1.1trn of which it considered "addressable".

The company stated: "Outside the direct-to-consumer space, the bulk of this addressable market is held through independent financial advisers, independent wealth managers and vertically integrated firms.

"A significant amount of this investment pool will have been initially advised upon, maybe many years ago, but now receives no ongoing advice and little support.

"This provides a rich source of potential transfers to Hargreaves Lansdown as clients look to consolidate all their investments on to our platform."

The number of clients left behind by advisers is growing, according to the regulator.

The Financial Conduct Authority said in the interim report of its platform market study, published in July, it had seen a 9 per cent increase in the number of orphaned client accounts between 2016 and 2017.

The regulator warned orphaned clients could end up paying more with some adviser platforms imposing fees of up to 0.5 per cent in addition to their pre-existing platform charges.

Hargreaves said the direct to consumer platform market is £206bn in size, of which Hargreaves Lansdown has a 39 per cent market share.

The firm added it will continue to buy books of business held directly by asset managers.

The company said: "Industry expert Platforum also estimate that £30bn is held directly with asset managers who are increasingly realising that they are not set up to service direct retail customers.

"This provides a source of transfers or an opportunity to acquire the entire direct back books from fund management groups.

"During the year we acquired a back book from Old Mutual Global Investors and in previous years acquisitions have been made from Jupiter, JPMorgan, Legg Mason and BlackRock.

"We are actively pursuing similar deals working with fund groups and the FCA to ensure affected clients can be transitioned effectively."

The company added it was now the largest provider of Lifetime Isas in the UK, with 42,000 client accounts and assets of £218m. The company said about half of its Lifetime Isa clients were new clients to the business.

As FTAdviser previously reported, Hargreaves Lansdown posted a profit of £292m for the year, a 10 per cent increase on the previous year.