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Hargreaves backs non-advised guidance as it posts £210m profit

Hargreaves Lansdown has posted a £210m pre-tax profit for the year to 30 June, up by 7 per cent from £195m in 2013.

Revenues increased by 8 per cent from £269m to £292m, while operating costs increased by the same amount from £77m to £83m.

Net profit margin shrank marginally from 71.5 per cent to 71.3 per cent, as total assets under administration rose 29 per cent from £36bn to £47bn.

The business added 144,000 new clients.

Hargreaves says recent FCA papers on non-advised sales represent “positive regulatory change around the information and guidance that we can give to clients”, adding it should allow Hargreaves to expand its “ability to assist clients without increased liability.”

It also adds that following the Budget it will look to expand its range of pension services. The results say: “Our relationship with the client continues for longer under drawdown than an annuity purchase. As we are a major provider of both independent annuity broking and drawdown services in the UK, we are planning a range of enhancements to our pension services.”

Annuity broking income fell from £7.7m in 2013 to £4.7m following the Budget. 

The firm says it will look to increase margin by adding more multi-manager funds and “enhance” its cash strategy over the next year to maximise revenues. Earlier this week it was reported the firm would look to apply for a banking licence to allow it to increase its margin on client cash.

It also predicts a reduction in the size of the adviser market, which it says will have a positive impact on the business.

Earlier this year the firm announced its new charging structure ahead of rules introduced in April that prevent it from retaining payments from fund managers. It says that “after an understandable period of familiarisation and questions clients seem to have accepted the changes.”

Chief executive Ian Gorham adds: “During the year we have continued to expand and improve the services we provide to our clients whilst also dealing with major regulatory change. Hargreaves Lansdown has not only retained but furthered its market leading position.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. This company is amazing .”ability to assist client without increased liability.” In other words sell as much as possible whilst getting around the compliance rules that daft IFAs have to follow. I wonder how many of their assisted clients really known just how much they are paying for not being advised but merely assisted. Hargreaves charges are way too high and would be so even if they gave advice. An amazing company.

  2. In other news, spiders back webs.

  3. If this is the way that the industry is going between the continual blurring of lines between regulated advice and so called non-advice or guidance advice or whatever you would like to call it, could the regulator please therefore split the categories so that any liabilities for complaints on so called non-advice are dealt with under a different category. As it is clear to me that it is very unfair that us in the regulated advice world pay for the mistakes of these firms when they get into trouble later down the road.

    I am not saying that Hargreaves Lansdown will ever get into trouble however as we have seen in the past, any organisation can get into trouble later down the road particularly when it has structures that challenge most professionals understanding of execution only advice. Clearer guidance on this matter is needed and separation of classes is fundamental, a requirement as well.

    Has anybody recently seen the Which advert advertising their guidance brochure where one of the customers clearly states that they value the independent financial advice? Is it only me that has problems with this type of advert or is blurring the line of language yet again? Whatever happened to treat clients fairly and not having misleading language in adverts!

  4. I simply cannot understand how these guys get away with it.
    Is it because they have friends in high places ?
    Just a thought.

  5. I have to be honest and say I quite like HL as company they seem to be well run and profitable, and they don’t really impact on my business ! yes I have and a couple move over to them, all but one has returned quite quickly.

    But my point is they have just made the FOS complaints list (not the kind of advert you want or need) ! now my point is do they really want to get into this quagmire of guidance bull squirt ?

    Big mistake !!!

  6. “Non advised guidance ?” Guidance is NOT advice, so how on earth can you have non advised guidance ? Exactly what is “non advised guidance” ?

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