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Highlights
Hargreaves Lansdown reports a 16% decline in new business for the last quarter.
The firm has welcomed 18,000 new clients, largely driven by its pensions and savings products.
Concerns over potential tax increases may be impacting customer asset retention.
Hargreaves Lansdown, (LSE:HL) a prominent investment platform, has reported a notable decrease of over 16% in new business for the quarter ending September 30. The firm recorded net new business of £500 million, down from £600 million in the previous quarter. Despite this decline, assets under administration remained stable, concluding the quarter at £157.3 billion, largely buoyed by positive market movements that contributed an additional £1.5 billion.
The platform attracted 18,000 new clients during this period, a significant increase compared to the 8,000 new clients welcomed in the prior quarter. This rise in clientele can primarily be attributed to the firm’s robust offerings in pensions and savings products, which continue to resonate with consumers seeking reliable financial solutions.
However, asset retention—a crucial metric indicating the proportion of customer assets retained—slipped slightly to 88.6%, down from 89% in the previous quarter. This small decline may be linked to prevailing concerns regarding potential tax adjustments anticipated in the upcoming Budget. Analysts, including Julian Roberts from investment bank Jefferies, suggest that uncertainties surrounding proposed increases in capital gains tax, which affects profits from asset disposals, could be influencing customer behavior on the platform.
As Hargreaves Lansdown navigates this challenging environment, the firm is also preparing for a potential private equity takeover slated for 2025. This strategic move underscores the evolving landscape of financial services and the need for companies to adapt to both market conditions and regulatory changes. The interplay between client engagement, asset retention, and regulatory developments will remain critical as Hargreaves Lansdown continues to position itself for future growth amidst these dynamics.
