Growth at Hargreaves Lansdown was dented in the first part of the year as the turmoil in global markets and fears over the war in Ukraine led British savers to invest less.
New customer sign-ups at the UK’s largest investment platform were two-thirds lower in the first fourth months of this year compared with the same period in 2021, when investors flocked to trade surging markets and dabbled in volatile US memestocks such as GameStop and AMC.
Net client inflows fell 46 per cent from last year to £2.5bn in the period. The company ended April with £132.3bn in assets under administration, down 6 per cent from the start of the year.
After a record year for trading in 2021, the slowdown in dealing volumes has meant leaner times for brokers in the US and UK. Savers have held back from making new investments as they grapple with the rising cost of living and watch global markets tumble in response to tightening central bank policy and Russia’s invasion of Ukraine. The MSCI World Index dropped 13 per cent from January to April, after gaining 21 per cent last year.
“The challenging backdrop driven by unprecedented macroeconomic and geopolitical events has impacted markets and investor confidence,” said chief executive Chris Hill.
The company typically reports results for a four-month period, rather than a quarter, in order to reflect dealing around the end of the UK tax year, when many clients rush to invest before the deadline.
Despite the hit to client growth and inflows, which were worse than analysts had expected, Hargreaves Lansdown’s revenues held up at £196.5mn from January to April, in line with expectations. Higher interest rates helped boost the company’s income because it keeps part of the interest earned on clients’ cash.
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