Hargreaves Lansdown says new business hit by ‘weak investor sentiment’

Hargreaves Lansdown has said it was hit by “weak investor sentiment” in the past three months due to fears surrounding Brexit and the global economy.

It told investors that the uncertainty had impacted new business, however it hailed a “solid start” to the financial year in the current climate.

The fund supermarket reported a 6% rise in net revenue to £128.1 million for the three months to September 30.

The company said new business also increased, up to £1.7 billion from £1.3 billion in the same period last year, as it looks to boost its share value which has come under pressure in recent months after the firm became engulfed in the saga involving Neil Woodford’s frozen fund.

Hargreaves Lansdown has apologised and waived fees for the near-300,000 Hargreaves investors who have around £1.6 billion in assets trapped in the Woodford Equity Income Fund.

Despite the ongoing saga, the company said it saw an acceleration in client growth, with 35,000 new clients joining the group in the quarter, up from 29,000 in the same period in 2018.

The FTSE 100 firm also reported that the assets under its administration rose by 3% to £101.8 billion during the three-month period.

New business joined through a variety of channels including organic new client growth, ongoing wealth consolidation from current clients, flows into its Active Savings management service and £900 million in direct book transfers from JP Morgan and Baillie Gifford.

But the fund supermarket added that it was struck by “weak investor sentiment” arising from “continuing Brexit and political uncertainty in the UK and wider global macro issues such as trade tariffs”.

The company said that following a period of heightened investment over the two previous years, it is now “deliberately moderating the rate of investment”.

It warned it is mindful of the uncertain market environment and “hence remains watchful on costs despite the client and revenue growth experienced during the period”.

Chris Hill, chief executive of Hargreaves Lansdown, said: “I’m pleased to report a solid start to our financial year for client, net new business and revenue growth.

“We continue to focus on our strategy of delivering excellent service, information and value during these continued uncertain times for our clients.”