Hargreaves Lansdown weathers Woodford as asset rise lifts shares

By Simon Jessop

LONDON (Reuters) - British fund supermarket Hargreaves Lansdown overcame adverse publicity over the suspension of Neil Woodford's flagship fund to increase full-year assets by 8.4% on a growing client base and net savings inflows, sending its shares higher.

The UK's biggest online investing platform appeared to have weathered the ire of clients and policymakers since the June suspension of Woodford's equity income fund, which Hargreaves had championed for years to its many retail savers.

Hargreaves said on Thursday that total assets under administration were 99.3 billion pounds at end-June, up from 91.6 billion pounds a year earlier and beating a company supplied consensus of 15 analysts for 98.7 billion pounds, helping to underpin a 7.7% rise in its shares.

"We recognise that there are industry headwinds and that the environment continues to be difficult and we remain vigilant to these conditions," Chief Executive Chris Hill said.

A 133,000 rise in client numbers to 1.22 million combined with the trend for consolidating their savings on the Hargreaves platform drove net new business of 7.3 billion pounds, while market gains added a further 400 million pounds.

However, Hargreaves said revenues were impacted by reduced client demand to trade shares given uncertainty around Brexit, while its decision to waive platform fees for clients affected by Woodford was costing 360,000 pounds a month.

Hargreaves' promotion of the fund only ended on the day it was suspended, leaving nearly 300,000 clients trapped until it reopens for trading, something unlikely to happen until December, the fund's Authorised Corporate Director has said.

Britain's financial regulator is looking into the circumstances surrounding the fund's suspension, which occurred when client demand to leave caused a liquidity squeeze.

Hill and other Hargreaves executives confirmed on Thursday they would give up their bonuses for the year over the affair.

"Our priority remains to support our clients and pressing for the Woodford Equity Income Fund to reopen as soon as is practicable, whilst protecting the interests of all investors," Hill said.

Despite questions about the way Hargreaves constructs and markets its favourite fund picks, used by many clients to decide where to invest, it stood by its 'Wealth 50' list.

"We are committed to a favourite funds list as one of many tools which are important for our clients."

(Reporting by Simon Jessop, editing by Sinead Cruise and Alexander Smith)