Financial services firm Hargreaves Lansdown has seen revenue and profit fall in the first half of this year as it announced a digital growth strategy to “redefine” wealth management.
In a set of interim results for the six months ending December 31 2021, the Bristol-based company said revenue dipped by 3% to £291.1m from £299.5m for the same period a year earlier.
Profit before tax dropped by 20% to £151.2m - down from £188.4m in 2020, while net new business dropped by 28% from £3.24bn to £2.32bn.
The firm’s chief executive Chris Hill said record-breaking stockbroking volumes seen in 2020 did not appear last year, with the “full impact” of record low interest rates felt on its revenue.
Despite this, Mr Hill said Hargreaves Lansdown welcomed 48,000 net new clients, taking its total client base to a record 1.7 million, while its assets under administration reached a record level of £141.2bn - a 4% increase over the last six months.
Mr Hill added that a strong performance from fund platform fees (+21%) demonstrated the benefit of diverse revenue streams and the company’s ability to deliver under various market conditions.
He added improved client service levels and greater levels of client engagement combined with the launch of its latest national advertising campaign meant Hargreaves Lansdown was ”well placed” to increase new clients and net new business ahead of the tax-year-end season.
Mr Hill said: “Such a skew towards an improved second half performance is not new, but what is, are the significant levels of inflation we are currently seeing along with geo-political tension and it is not clear how this may impact on markets and investor confidence in the coming months.
“As ever though, we will be there to support our clients helping them to navigate such issues and achieve better financial outcomes.”
The results were released ahead of a presentation to investors of the group’s new five-year £175m growth strategy, which will include investment in new technology to help clients to manage and monitor investments and wealth. Mr Hill said the UK’s wealth management industry was at “a key inflection point”.
Mr Hill said: “Hargreaves Lansdown was the original disruptor and now is the right time to target the broader wealth management market. Few companies have the capabilities we have to transform the saving and investment experience.
“Our comprehensive digital wealth management service will help clients manage through key events and sustain lifelong relationships. As such we will ensure strong and sustainable growth, scalability and shareholder returns into the future.”
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