In its half year results today (February 22), Hargreaves Lansdown said it is to build a new "omni-channel" advice proposition that will "bridge the gap" from D2C to advice and offer and "integrated service" with a platform that helps clients manage key life events.
The proposition will begin in 2023.
Chris Hill, chief executive officer of Hargreaves Lansdown, said: "This expansion will lead to a higher share of wallet as clients consolidate their savings and investments with us and increase retention as more choose to build lifelong relationships because we can help at all the key financial moments that matter."
The company is also planning to launch 19 new funds within the next two years, including ESG funds. It will also introduce "portfolio health checks" and tools to build portfolios by 2024.
The announcement was made alongside its half year results, in which the company saw its pre-tax profit drop 20 per cent in the six months to December 31 last year as it invested in its business.
The company reported pre-tax profits of £151.2mn in the period.
Hill highlighted that the group decided to invest in its technology and support functions, as a result of the “acceleration of changes in behaviour” during the pandemic.
"In assessing the opportunities for future growth, the acceleration of changes in behaviour during the pandemic, and critical need for clients to engage with their finances, we decided to invest further in establishing the strategic capabilities and technology, as well as the associated compliance and support functions needed to deliver excellent client outcomes at scale and support growth with the next generation of wealth management," he said.
The company’s statutory costs, which includes strategic investment, increased by 25 per cent in the period.
Hill said: “Together with the lower levels of share trading compared to 2020 and lower interest rates, this resulted in statutory profit before tax being…lower year-on-year.”
Hargreaves Lansdown’s platform performed better, with a 21 per cent increase in fund platform fees, which Hill said demonstrated the benefit of diverse revenue streams, and the group’s “ability to deliver under various market conditions".
Hill added that “now is the right time” to target the broader wealth management market, and will shortly announce its next phase of growth, “to redefine wealth management”.
Net new business dropped 28 per cent to £2.3bn, and net revenues slipped 3 per cent to £291.1mn.
Hargreaves’ said the end of 2020 was an “unique period” with “record-breaking” market events which weren’t repeated in 2021.
“We also saw the full impact of the record low interest rates on our revenues,” Hill added.
Assets under administration rose 17 per cent to £141.2bn, and the company said it welcomed 48,000 new clients, bringing its total client base up to 1.7mn.
However, this was lower than the 84,000 new clients the firm saw in 2020.
Hill said: "In the first half of this financial year, we saw a gradual return to the office and calmer markets which led to more normalised share trading levels, albeit still higher than before the pandemic."
Hargreaves’ market share of the direct to consumer wealth market increased to 43.3 per cent.
In the firm's quarterly results in October last year, it saw client intake slow and revenues drop.
sally.hickey@ft.com
