Hargreaves Lansdown client growth surges as takeover looms

Hargreaves Lansdown’s client growth surged to 18,000 in the last quarter as the investment platform’s private equity takeover approaches.

However, despite the growth, which compared to just 8,000 new customers in the same quarter last year, new assets coming into the platform dropped to fairly low levels.

Hargreaves Lansdown reported just £500m in net new business, compared to £600m in the same quarter last year, pushing assets under administration for the firm to £157.3bn.

Analysts had expected a “relatively weak” quarter, with Peel Hunt analyst Stuart Duncan warning that investor sentiment has remained “challenging” throughout the sector.

With a host of financial services reporting third quarter results over recent weeks, many have blamed jitters over tomorrow’s Budget for the hesitancy of investors to put their money in the market.

Client retention for Hargreaves Lansdown was 92 per cent and asset retention was 88.6 per cent, compared to 91.7 per cent and 89 per cent respectively last year, leaving both metrics below the platform’s long term ambitions.

Share dealing volumes per month ticked up to 738,000 from 634,000 last year, thanks to overseas deal volumes reaching above 20 per cent.

Thanks to this and the higher level of assets under administration on the platform, total revenue for the firm surged to £196.5m in the quarter, compared to £183.8m the year before.

Client cash balances closed at £12.7bn from £12.4bn the year before, with the increase driven by net selling of investments by clients in September.

Hargreaves Lansdown takeover nears

Hargreaves Lansdown’s takeover by a private equity consortium was approved by its board on 9 August and by shareholders on 14 October.

A court hearing to sanction the scheme of arrangement is expected to be in the first quarter of next year.

The deal marks yet another takeover of a London listed company after a flurry of exits from the London Stock Exchange this year.

Dan Olley, CEO of Hargreaves Lansdown, said that while the platform waits for the regulatory approval, the firm remains “as committed as ever to supporting our clients with the very best service, experience and value, and on executing our strategy”.

“We are particularly mindful of tomorrow’s Budget, and will be on hand to support and guide our clients following any potential changes that are made,” he added.

“With millions of households without enough saved to enjoy a comfortable lifestyle in later life, it has never been more important for the UK to save and invest for their financial futures, and as the UK’s largest platform for retail investors Hargreaves Lansdown is well placed to help them do so.”