Hargreaves Lansdown has benefitted from savings provider NS&I cutting its interest rates with the fund giant seeing increased interest in its own savings account.
In a trading update published today (October 8) the company said flows into its active savings accounts had been "hampered" by the once market leading rates offered by NS&I.
But since the government-backed provider announced last month it was set to slash interest rates in a bid to return to "a more normal competitive position", Hargreaves Lansdown said it had seen a "marked impact" on activity back into its own savings accounts.
NS&I will reduce rates on its products from November 24, with those on its easy access ‘direct saver’ account falling from 1 per cent to 0.15 per cent (gross/AER).
Rates on its investment account will fall 79 basis points, from 0.8 per cent to 0.01 per cent, while income bonds will fall by as much as 115 basis points, also to 0.01 per cent.
It came as Hargreaves reported it had gained 31,000 clients in the three months to September, with new business of £800m significantly down on the £1.7bn seen last year.
But Hargreaves attributed the sharp difference in new business to the firm benefitting from a £900m back book transfer from J.P. Morgan and Baillie Gifford last year.
Now serving 1,443,000 active clients Hargreaves Lansdown closed its first quarter managing £106.9bn in assets, up from £101.8bn the previous year.
Chris Hill, chief executive at Hargreaves Lansdown, said: "Today we report a good start to our financial year, with growth in clients, assets and revenue.
"These results are against the ongoing backdrop of market uncertainty and highlight the resilience of our business model and client proposition."
rachel.mortimer@ft.com
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