More than 80 per cent of Hargreaves Lansdown’s new clients over the past year were under 55, showing a clear shift in demographics, the firm has said.
The company's chief executive Chris Hill said in the group’s results statement this morning (August 9) the number of younger investors using Hargreaves Lansdown had been growing for years, but has been accelerated by the Covid-19 pandemic.
He said the structural growth drivers of this trend are clear, comprising enduring low interest rates over the past decade, greater individual responsibility for retirement saving, the generational transfer of wealth, and an increasingly complex savings environment.
"Furthermore," he said, "Covid has accelerated these trends and has driven more people of all ages to engage with their finances. Younger people now have a greater appetite for investment."
He added that the pandemic has reinforced the importance of effective savings and the need for individuals to be financially resilient.
“We are seeing younger clients show an interest in - and willingness to learn about - investing, prioritising financial resilience and saving. They are starting to benefit from the transition of wealth from older generations," he said.
The statement outlined how the firm’s median age of client has dropped from 58 in 2007 to 46 in 2021.
Hill added: “During FY21, nearly half the clients joining our platform were in the 30-54 age bracket - one of the key demographic groups who build wealth over time. Getting clients onto the platform earlier means that we can support them for longer as they grow their wealth.”
The firm saw its assets under administration rise by 30 per cent in the year to June 30 to £135.5bn.
Net new business inflows rose 13 per cent to £8.7bn and revenue rose 15 per cent to £631m.
But pre-tax profits dropped by 3 per cent to £366m.
Hill said: “This has been an extraordinary year and I am proud of how our colleagues responded and continued to deliver to clients throughout this challenging period.
“Our focus is, as always, on our clients and their lifelong needs, not just their short-term interests. We have been able to capitalise on this extraordinary year - and enlarge our client base substantially - due to our previous investment decisions and confidence in the opportunity ahead.
"As the UK's market-leading digital wealth management service we have continuously advanced our service and broadened and strengthened our proposition, as client needs evolve, and the wealth market continues to broaden and digitise.”
The update comes four months after the firm said it expected its pre-tax profit for the year to be above expectations because of a surge in share dealing during lockdown.
In February the platform reported a surge in new clients in the second half of 2020, as the platform continued to cash in on the coronavirus trading boom.
In a trading update published on March 17, the FTSE 100 company said this trend had continued into 2021, with “elevated volumes” of share dealings, leading to a period of "very strong growth".
Hargreaves said this share dealing was increasingly directed towards international equities, driven by interest in US stocks from existing clients.
sally.hickey@ft.com
