Hargreaves Lansdown sees profits rise

Hargreaves Lansdown sees profits rise

Leading financial services group Hargreaves Lansdown has shrugged off stock market turmoil to post a hike in half-year profits as new pension freedoms boosted business.

The Bristol-based firm said assets under administration rose to a new record, up 7% during the six months to the end of December to £58.8bn, despite falls on global markets amid fears over China and slumping oil prices.

Interim profits lifted 6% to £108m as demand from retail investors was buoyed by new rules on pensions and savings introduced last April to give investors more choice on where and how to save for retirement.

Hargreaves - which s ells pensions, shares and a range of advisory services to retail customers through its Vantage fund supermarket - said net new business leapt 23% higher year-on-year to £2.8bn in its first half.

This came in spite of a 3.5% drop in the FTSE All Share index during the final six months of 2015, with surging pension business offsetting weaker Isa and fund and share account business.

Chief executive Ian Gorham said: "Against a backdrop of fluctuating stock markets, Hargreaves Lansdown has continued to be the most popular destination for UK retail investors, with excellent new business for the period."

He added the pension freedoms, which last year saw the government scrap the need for pensioners to buy compulsory annuities, were continuing to attract "huge interest" ahead of the tax year-end.

The FTSE 100-listed group saw a 73% surge in half-year net new business for its DIY pension, the Vantage self-invested personal pension (SIPP).

But the average subscription in its Vantage Stocks and Shares Isa dropped 6%, with a 12% decrease in the number of clients subscribing, amid the wider stock market falls.

Hargreaves said the second half of its year was "key" for Isa business as clients look to use up their tax allowances by the tax year-end.

The firm's shares fell 4% despite a resilient first-half performance as analysts at Liberum said profits growth was slightly below their expectations, suggesting margins were coming under pressure.