Hargreaves Lansdown Group  

Hargreaves’ shares dip as assets and client numbers fall

Hargreaves’ shares dip as assets and client numbers fall
Credit: FT

Hargreaves Lansdown’s share price was down more than 6 per cent this morning following a trading update which showed a larger than expected decline in assets and less new clients compared to a year earlier.

In results published today (May 12) the firm showed assets under administration had fallen to £132.3bn in the four-month period to April 30, down from £141.2bn in December 2021. This figure also undershot analyst forecasts of £138.1bn by £5.8bn.

Net flows between January and April totalled £2.5bn, also behind analyst estimates of £3.1bn.

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Meanwhile new clients totalled 42,000, just a third of the 126,000 it attracted in the same period a year earlier. This figure was also lower than the 64,000 new customers analysts had anticipated. 

In total, Hargreaves serves around 1.7mn investors.

The retail investment platform’s share price sat at 836p at 11:00am, recovering slightly from larger dips at the time of market open. Shares have fallen around 40 per cent over the past six months.

Hargreaves’ chief executive, Chris Hill, said a “challenging backdrop” driven by unprecedented macroeconomic and geo-political events has impacted markets and investor confidence, in turn leading to “moderated flows” and asset levels with net new business of £2.5bn. 

“We saw a significant step up in flows in March and April from our tax year end campaign which focused on the benefits of long-term saving and investing, with £1.8bn of tax wrapped inflows leading to a record 747,000 clients contributing to their Isas and pensions this tax year."

The platform’s client retention rate was 92.4 per cent for the year to date. Analyst Peel Hunt said in a note this figure suggests Hargreaves’ latest trading update was more about the market backdrop than its own specific performance.

“Whilst there was some success around the tax year-end, taking in £1.8bn in March and April, investor confidence has clearly been impacted by macro and geopolitical events,” said Peel Hunt.

“Negative market movements amounted to £11.4bn, reflecting clients’ global equity and tech exposures.”

Peel Hunt said earlier this month that “short-term pain” lay ahead for the FTSE100 company, but that longer term estimates looked promising.

The recovery of flows in the coming years, the analyst said, will be as a result of accelerating the growth of its Active Savings service and the development of its new advice proposition.