New business

Hargreaves Lansdown AuM, net drop in new business; fall in stocks

Hargreaves Lansdown Shares fell on Thursday after the investment platform reported lower new business and assets under management.

The company said assets under management fell to £132.3 million as of April 30, from £141.2 million as of December 31, 2021. This factors in unfavorable market movements throughout the period, in part due to exposure to global equity markets, particularly US technology stocks, with the Nasdaq. down 21% over the period, he said.

Meanwhile, net new business fell to £2.5bn in the four months to the end of April, from £4.6bn a year earlier. HL said this reflected moderate flows seen in the market. He pointed out that in 2021, flows benefited from improved market and investor confidence resulting from the deployment of the Covid vaccine, the investment of excess cash accumulated during the lockdown and increased interest in stock exchanges.

Revenue for the period was £196.5 million, in line with expectations and down from £233.2 million the previous year.

Hargreaves reiterated its guidance for fiscal 2022, while increasing the expected revenue margin on cash to 30-35 basis points for the full year, saying it sees the impact of rate hikes base starting to make itself felt.

Chief Executive Chris Hill said: “The challenging environment driven by unprecedented macroeconomic and geopolitical events has impacted markets and investor confidence, in turn driving asset flows and levels moderate with net new business of £2.5 billion over this period.

“We saw a significant increase in flows in March and April compared to our fiscal year-end campaign which focused on the benefits of long-term savings and investing, with 1.8 billion pounds sterling in tax inflows, leading to a record 747,000 clients contributing to their ISAs and pensions this tax year.”

As of 09:05 BST, shares were down 7% at 831.20p.