Hargreaves Lansdown has cited a rise in self-investing post-RDR after attracting a record £1.8bn of net inflows in the first quarter of the year.
The inflows bring the group’s assets under administration to a record £35.1bn, a 23 per cent increase from the start of 2013. The group reported £4.7bn of new assets in the first quarter.
Hargreaves Lansdown chief executive Ian Gorham says while it is too early to fully quantify the effect of the RDR, the increased volumes appear to support his view that self-directed investing “is increasingly recognised as a sensible and good value imperative”.
The firm has also reported cumulative net inflows of £3.44bn in the nine months (of its financial year so far) to 31 March 2013 and a 24 per cent rise in year-to-date revenue to £216.6m. HL has also attracted 30,000 new clients to its Vantage platform in the first quarter of 2013, a rise on the 17,500 added in the first quarter fo 2012.
Gorham says the firm is not “expecting any surprises” from the Financial Conduct Authority’s ”RDR 2” paper, due next week, which is expected to confirm the FCA rules to be implemented next year stopping all payments to fund managers and platforms. The FCA has also been exploring whether to introduce a sunset clause to stop legacy payments from fund groups to platforms.
He says: “After assimilating the forthcoming paper we will run a process to obtain the best possible prices for our clients on suppliers’ funds before offering commission-free funds on our Vantage platform. Therefore in due course Hargreaves Lansdown will substitute fees to replace commission on funds. We have conducted extensive modelling of our potential fee structure and we feel it will be both competitive and excellent value. Subsequent to the transition we see the long term opportunity as positive.
Gorham has also hit out at last month’s decision by the HMRC to deem platform rebates to investors taxable, a move which came into force on 6 April.
Gorham says: “HMRC’s recent “discount” tax should also be challenged. The public have a right to discounts without fear of taxation.”