Hargreaves Lansdown shares slide as asset and customer growth slow amid growing cost-of-living crisis and market turmoil
- Hargreaves Lansdown reported inflows fell 46% to £2.5bn
- A collapse in investor confidence saw new customer numbers fall 66%
- The platform’s revenue of £196.5m was in line with expectations
Hargreaves Lansdown has seen a slowdown in asset and customer growth as market turmoil and the cost-of-living crisis has led to Britons investing less.
The Bristol-based company reported third-quarter inflows of £2.5billion, a fall of 46 per cent from last year, while total assets under administration fell by 6 per cent in the four months to the end of April to £132.3billion.
HL shares plunged as much as 10 per cent in early trading on Thursday, but recovered to a loss of around 6.5 per cent at 835.8p approaching midday.
Crisis of confidence: Hargreaves Lansdown said market turmoil and fears over the Ukraine war had impacted investor confidence
Hargreaves Lansdown said the weak quarter reflected ‘adverse market movement throughout the period driven partly by exposure to global equity markets, particularly US technology stocks’.
By contrast last year’s net inflows had ‘benefited from improving market and investor confidence resulting from Covid vaccine roll-out, investment of excess cash built up during lockdown and elevated interest in share trading’.
New sign-ups to the UK’s largest investment platform were two-thirds lower between January and April than in the same period last year when retail investors flocked to DIY platforms during the meme stock phenomenon.
Chief executive Chris Hill said the slowdown in growth was due to the ‘unprecedented macro-economic and geo-political events [which] has impacted markets and investor confidence’.
It echoes similar remarks made by rival AJ Bell which last month reported its assets under administration had dipped 2 per cent to £74.1billion. It pointed to customers investing less due to the rising cost of living.
Despite a slowdown in customer growth and inflows, Hargreaves Lansdown reported revenues of £196.5million, in line with expectations.
The hike in interest rates has helped boost income because the firm keeps part of the interest earned on customers’ cash.
It reiterated its guidance for the fiscal year and raised its expected revenue margin on cash to 30-35 basis points ‘as we see the impact of base rate rises starting to come through.’