Hargreaves Lansdown margin hit overshadows asset rise

* Takes in net 2.75 bln pounds; total assets 55.3 bln pounds

* Operating revenue dips 0.2 pct; Vantage platform down 2 pct

* Shares (Frankfurt: DI6.F - news) fall 3.8 pct (Recasts, adds detail, analyst quotes, shares)

By Simon Jessop

LONDON, May 20 (Reuters) - British investment firm Hargreaves Lansdown (LSE: HL.L - news) said revenues from its flagship online platform dipped in the first four months of the year after lower margins marred its run to a fresh record in total assets.

The company, which makes most of its money by offering retail investors access to a range of funds on its Vantage platform, said operating profit in the period was down 0.2 percent on the year. Vantage revenues slipped 2 percent.

An industry leader, Hargreaves has seen its stock rise 21 percent since the start of the year, but the impact of low interest rates and changes to its pricing model have curbed its ability to translate asset growth into higher profit.

"The positive impact of higher asset values and net new business inflows have been offset by the impact of lower margins earned on client money and funds held on the platform," the company said in a statement.

In response, shares in Hargeaves were down 3.8 percent at 0905 GMT, the second-biggest faller in the FTSE 100 index .

Keeping his 'hold' rating on the stock, Shore Capital analyst Paul McGinnis said revenue headwinds remained, including lower net interest margin on client cash balances and the impact of its move to charging platform fees instead of taking commission from fund providers.

"We think the Hargreaves' business model and management execution are amongst the most impressive in the UK market... (but) we think the valuation now looks overly stretched for earnings growth currently somewhat muted," he wrote in a note.

The company collected record net inflows of 2.75 billion pounds during the four months to the end of April, boosted by strong demand for its pension services after the government relaxed rules on what people can do with retirement savings.

That helped total assets under administration rise 6.2 billion pounds to a record 55.3 billion pounds, compared with 49.1 billion pounds at end-December.

"Hargreaves Lansdown has invested heavily in at-retirement support and planning tools... The group has benefited from both extensive new business and consolidation through inward transfers," said Chief Executive Ian Gorham.

"We have also experienced lower than expected withdrawals from pensions as clients appear to be using the freedoms extremely sensibly." ($1 = 0.6449 pounds) (Reporting by Simon Jessop; editing by Nishant Kumar and Keith Weir)