Chris Hill, chief executive of financial services firm Hargreaves Lansdown (HL), is confident his vision for the business will transform the way people manage their money.
The boss of the Bristol-founded investment company says his purpose is to “empower people” to save and invest with confidence - no mean feat given the current macroeconomic climate.
The 51-year-old, who was formerly chief financial officer of Travelex, has arguably not had an easy ride since taking over the helm of HL in 2017. Aside from managing the FTSE-100 company through the pandemic, current political turmoil and pressures on the economy caused by the ground-war in Europe - including the energy crisis in the UK - has caused investor confidence to plummet in 2022.
HL’s profits tumbled over the first half of the year by 19% to £297.5m, while revenue also fell from £631m in 2021 to £583m. For a business whose revenue stream is reliant on the confidence of markets - and the investor community saving - it could easily be seen as a serious cause for concern. But Mr Hill is not phased - or, at least, he does not appear to show it.
“It has been a very unsettled time. Stock markets like certainty and we have precious little of that right now,” Mr Hill told BusinessLive .
“Investor confidence is really, really low - probably the lowest we have seen. We are very aware of that, but as a consequence we are aware of engaging with clients on the benefits of saving and investing over a long period of time. If you build up your financial resilience you can cope with these short-term shocks. If you are investing for the long term you shouldn’t be so concerned about the short-term volatility.”
The last three years have seen huge shifts in the investor market. Covid accelerated trends towards digital, as people worked from home, and drove more individuals of all ages - including more women and younger people - to engage with their finances.
It marks a step change for HL, which was established by Peter Hargreaves and Stephen Lansdown from a bedroom in Clifton in 1981, and whose clients had a median age of 58 back in 2007.
The company, which is based on Anchor Road in Bristol and employs some 1,800 staff, now has 1.7 million clients. Of those, a total of half a million joined the platform in the last two years alone. Last year, HL said the median age of clients had dropped to 46, with nearly half of those joining in 2021 between the ages of 30 and 54.
“We saw a surge in clients because people had time to think about the importance of saving during the pandemic,” said Mr Hill. But it’s not just the age of investors which is changing, the approach to how people want to save money is too.
“We saw, early on in the pandemic, lots of people who opened up accounts who were buying individual shares - airlines, hospitality, travel - and we surveyed clients, and we thought it was quite odd,” he said.
“We had previously seen people starting out investing and moving into funds, but now they were buying individual stocks. What was driving that? We learned it was because that was what they were hearing about [in the news].”
HL launched its Better Investor programme, which targeted communication towards these clients. As a result, people began to diversify and use more funds and tax-efficient wrappers, Mr Hill said.
The rise of ethical investing is also becoming more important to a growing portion of HL’s client base. Around 16% of the firm’s clients now have at least one “responsible investment” which is a “significant increase” on two years ago, according to the firm.
The demand is such that HL has created an environmental, social and governance (ESG) team to help investors remain informed about options as well as understanding the impact their investment decisions will have on the planet.
“It is not necessarily to drive them one way or the other, but it’s to build understanding so they can make informed choices,” said Mr Hill.
Like many large multinationals, HL has its own ESG policies, including diversity and gender targets, although what these targets are is not particularly clear. The company signed up to a scheme - called Strive - in 2021 to offer paid internship opportunities to students in the West of England from minority ethnic backgrounds. It also has a menstruation and menopause policy in place to support staff - and this year supported an employee who decided to donate her eggs to a fertility clinic.
When it comes to gender diversity, the company’s workforce is now a 65% to 35% male-to-female split, while the board is 50% women, according to Mr Hill.
“We have already made that change at a senior level. Where we are focused now is how we bring the talent up through the organisation. It can’t just be bringing people in from outside. We have got to be focused on how we bring women and [people from diverse backgrounds] up through the workforce.”
HL did not furlough any staff during the pandemic, but shifted to working from home quickly when the first lockdown hit. The company now offers flexible working, with staff having the option to work from home as well as the office. When asked to describe his leadership style, Mr Hill refers to having a “very clear purpose” that aligns with his vision.
“I think my leadership style is collaborative, client first and with a strong sense of values. One of the really great things about HL is the culture we have. People really care about the business and colleagues. I saw that so strongly through the pandemic," he said.
"There was no playbook [for the Covid pandemic], so we had to empower people so things could happen at speed. Suddenly you lose all physical contact with people, and everyone had to learn different rhythms and ways to be in touch. As a business we are very client focused, and our culture is very client focused, and I think those things really helped because people had a very clear and united vision about what we were trying to do."
HL is a major employer in Bristol - a city in which it intends to remain, according to Mr Hill. Unlike many other firms in the region that are struggling with skills shortages, Mr Hill says HL attracts staff from all over the country.
“Bristol is a beautiful city, a great location, with great people, and within HL we are very proud of our Bristol heritage. We are proud of being a Bristol business, and being involved in the community in which we are based.”
He says he is confident his vision for the future of HL will lead to success for the 41-year-old firm.
“Businesses are only as good as the people that are in them,” he added. “We have a brilliant team who are all ambitious, so the best thing a leader can do is bring people together, give them a clear vision and then empower them to get on with it.
“That is the key role of a leader - and that is what I have always focused on doing. I don’t know whether it’s the secret to success but it’s what I think is the right thing to do.”
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