14.8 C
Monday, October 2, 2023
HomeEconomyHargreaves Lansdown deal volumes fall as investor confidence takes a hit

Hargreaves Lansdown deal volumes fall as investor confidence takes a hit


Hargraves Lansdown suffered a drop in trading volume in the last quarter after investor confidence suffered from market volatility and economic uncertainty.

The group told investors on Wednesday that “cost-of-living issues, rising interest rates and market volatility” affected business volumes in the three months through the end of June.

HL said share trading volumes averaged 685,000 per month in the quarter, down 11 percent from the previous three months and down 12 percent from a year earlier.

In charge: Chris Hill is the head of retail investment platform, Hargreaves Lansdown

But the company’s net new business of £1.7bn for the period was 6 per cent higher than the previous quarter.

Closing assets under management were £134bn, up 2% in the quarter.

The group also enjoyed net customer growth of 13,000 in the period, bringing the total to 1,804,000 customers.

He said clients “were focused on using their ISA and SIPP tax breaks, particularly in the final days of fiscal 2023 and the beginning of fiscal 2024.”

It added: “Active Savings posted net inflows of £0.8bn in the quarter (Q4 FY22: £0.7bn) as customers continue to manage their cash savings through us and the broad access we provide to a range of rates and banks.”

Hargreaves Lansdown Shares it was up today and up 4.86 percent or 40.80p to 881.00p this morning.

Shares in the retail investment platform have plunged 60 percent in the past five years.

Chris Hill, group chief executive, said: ‘We delivered net new business of £1.7 billion in the period, up 6 per cent from the previous quarter.

“The fiscal year-end season continues to be a critical time for our clients and this year we are focused on helping them navigate changes in the fiscal landscape, making the most of their allocations and delivering more value to our overall client proposition.”

He added: ‘Improvements in the prior quarter, including the launch of a new cash ISA, three new Portfolio Funds and price reductions on our LISA and JISA accounts, were further enhanced with the removal of dividend reinvestment fees and regular monthly investment along with the addition of new partner banks to Active Savings.

“The breadth and continued investment in our customer proposition means we remain well positioned to grow and support new and existing customers with their investment and savings needs.”

Criticism: Hargreaves Lansdown co-founder Peter Hargreaves has criticized the group's strategy and high operating costs.

Criticism: Hargreaves Lansdown co-founder Peter Hargreaves has criticized the group’s strategy and high operating costs.

On Tuesday, it was revealed that Hargreaves Lansdown chairwoman Deanna Oppenheimer will step down after a series of run-ins with the firm’s co-founder, Peter Hargreaves.

Hargreaves, who is the company’s largest shareholder, launched a sharp attack on the high costs and strategy of the group, led by Chris Hill, earlier this year.

In an interview with the Financial Times in early 2023, he said: “The board indulged in completely unnecessary irrelevant programs, which have distracted the company from its main objective. Not surprisingly, stocks have tumbled.

In a statement this week, the Bristol-based DIY investment team said it had begun seeking “successor chairman candidates” for Oppenheimer, who has overseen the firm since 2018.

Neil Shah, Edison Group director, said: ‘This is a modest set of results for Hargreaves Lansdown, with assets under management up 2 per cent and new business up 6 per cent.

They are unlikely to significantly change the conversation about the Bristol-based investment manager, whose chairman resigned on Monday after criticism from his co-founder, and whose share price has fallen 65 percent since 2019.

“Questions remain for the company about high executive pay, staff costs and a controversial automated investment advisory service currently being developed.”

He added: ‘Amidst these tumults, CEO Chris Hill has signaled a ‘back to basics’ approach to the company, targeting steady customer growth, new product launches and a rebound in new business.

“This is an investment manager’s bread and butter, a far cry from the bold tech schemes of the company’s outgoing president.

“With an anemic investment environment, coupled with the ongoing debate about the future of the company, these slow and steady results are perhaps the best Hargreaves Lansdown can currently hope for.”

Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

Latest stories