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Hargreaves Lansdown shares tumble on CEO warning

Hargreaves Lansdown shares tumble on CEO warning

The shares of FTSE 100 platform Hargreaves Lansdown fell around 7 per cent this morning after the company’s chief executive Chris Hill warned there had been an "industry wide slowdown" in inflows.

Mr Hill said: "The past quarter has seen an uncertain market environment and weak investor sentiment resulting in an industry-wide slowdown in net retail flows."

His comments came in a trading statement to the market where the company reported a 3 per cent increase in assets to £94.1bn, driven by £1.3bn of new money from clients of the firm and £1.2bn of gains from market movements.

Mr Hill added that despite this backdrop, Hargreaves Lansdown was well posititioned for when sentiment improved.

But his comments failed to soothe market concerns, which was 6.13 per cent lower today. This is a far starker fall than that of the FTSE 100 as a whole, which was down 1.82 per cent today amid a global sell-off.

Because Hargreaves Lansdown derives part of its revenues from charging clients a percentage of the assets they hold on the platform, a general decline in asset prices such as falling values for stock and bond markets would be expected to cause a drop in revenue.

This means the company’s shares would typically perform worse than those of the market as a whole when the market is falling.

Hargreaves Lansdown recently announced it is launching a cash savings product, Active Savings, which is now over £100m in terms of assets.

david.thorpe@ft.com

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