16th Apr 2014 08:18
LONDON (Alliance News) - Hargreaves Lansdown PLC Wednesday reported GBP1.83 billion in net inflows over the third-quarter, which helped to propel its assets under administration to GBP45.7 billion, boosted by an influx of new clients and accounts.
Overall, assets under administration increased by GBP2.3 billion in the three months to March 31.
Third-quarter operating net revenue increased to GBP73.7 million from GBP69.5 million in the corresponding quarter a year earlier, driven by higher asset values and new business inflows, along with strong share dealing volumes, which at 855,000 deals for the quarter were up 44% on the same quarter last year.
"New clients and accounts have generated increased revenue whilst UK stock markets, a key driver of revenue levels, have been muted, falling by 1.5%. Interest rates have remained low, prolonging the drag on our interest income. Whilst not reported on a quarterly basis, operating costs have continued to be well controlled," Ian Gorham, Chief Executive, said in a statement.
The increase in operating net revenue was largely down to a 3.5% increase to GBP55.4 million in its flagship service Vantage, the investment supermarket and wrap platform, as well a 30% increase to GBP11.4 million in its discretionary service. Net new active Vantage clients were up 33,000 in the quarter.
Hargreaves Lansdown has been adjusting to new regulations driven by the regulator's desire to ensure greater transparency in the sector's pricing system, so that customers know what they are paying and to whom.
The first round of the Retail Distribution review meant clients would no longer pay commission to financial advisors, while the second round has moved to "unbundle" platform charges. The second round of the new regulations came into play on April 6 and targets payments-to-platform service providers, such as Hargreaves Lansdown, by fund managers.
In January, Hargreaves Lansdown said it negotiated with its 'Wealth 150+' funds to offer lower fund annual management charges to its clients.
Hargreaves Lansdown Wednesday said clients are "clearly attracted" to the discounts, with over 30%, some GBP250.0 million, of all new fund investments in March were into Wealth 150+ funds, and over 40% in early April.
The company said it will keep the marketplace under review as the recent price changes continue to be absorbed.
Hargreaves Lansdown also welcomed a number of proposals made by Chancellor of the Exchequer George Osborne in his 2014 Budget. Osborne increased individual savings account limits and shook up pensions by putting an end to the effective compulsory status of annuities.
"We are enthusiastically preparing to service these new and welcome flexible arrangements, including continuing to look at the potential for enhanced cash services. As one of the largest providers of high quality, low cost ISAs and modern drawdown pensions in the UK we should stand to benefit from these changes," Gorham said.
"We look forward with optimism to a successful full year and new and exciting opportunities," Gorham added.
Hargreaves Lansdown shares were Wednesday trading 1.32% lower at 1,195.00 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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