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Hargreaves posts 10% profit rise as FSCS bill hits £5.5m

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Hargreaves Lansdown has posted a 10 per cent increase in pre-tax profit from £199m to £218.9m despite a £5.5m bill for the Financial Services Compensation Scheme.

The firm has published its annual results alongside an announcement that its chief executive Ian Gorham is to step down and be replaced by group chief financial officer Chris Hill in September next year.

Its FSCS levy is up 25 per cent from £4.4m last year.

The group has seen a 12 per cent increase in assets under administration for the period, reaching £61.7bn, while net revenue also increased year-on-year from £294.2m to £326.5m.

The firm has seen a slight drop in net new business inflows, from £6.1bn to £6bn.

Gorham says: “We are delighted to present a set of results demonstrating a healthy profit growth and continued substantial new assets and clients.

“Hargreaves Lansdown is well positioned to take advantage of the structural opportunity for growth in the savings and investments market, including the launch of the Lifetime Isa in April next year.”

Among its products, the firm saw a 17 per cent increase in net new pension assets at £2.7bn, following the introduction of pension freedoms.

However, net new Isa business was down 15 per cent to £2.2bn compared to 2015, which the company attributes to “difficult markets and low investor confidence”.

Elsewhere, the firm says it has seen “considerable demand” for its asset management services which are set to expand, as well as its fund management range and Portfolio+ service.

Assets in its multi-manager funds total £6.3bn and are up 13 per cent from a year ago.

The two new funds launched in April, the High Income and Strategic Assets funds, had a combined total of £380m in assets at 30 June.

The Portfolio+ online investing service hit £311m of assets from £26m a year ago.

The firm has also confirmed the launch of a Lifetime Isa for April 2017, as well as a cash management service in June and followed by a peer-to-peer lending offering, as previously reported by Money Marketing.

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