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Hargreaves plans to increase advice proposition as profits leap

Hargreaves Lansdown has announced a 46 per cent increase in pre-tax profits for the 12 months to June 30, 2011.

The firm saw profits rise from £86.3m to June 30, 2010, to £126m to June 30, 2011.

The firm says it plans to increase its fee-based advice proposition, citing the fact that the “regulatory and economic challenge presents acute challenges to other firms in the financial sector.”

Hargreaves Lansdown chief executive Ian Gorham says the firm was disappointed by the FSA’s recent “significant U-turn” in last month’s platform paper which suggested execution-only firms may have to abide by the proposed ban on payments between fund groups and platforms. However, he says: “We are confident that we will be able to adapt as a business to meet any regulatory requirements whilst maintaining a clear focus on client service and on the success of our business. There is substantial water to go under the bridge in this debate.”

Hargreaves Lansdown’s share price fell by around 10 per cent the morning after the FSA extended its ban on fund manager rebates to execution-only platforms.

Gorham says that although the costs for retail investors will be driven down in the coming years, Hargreaves should benefit from increased volumes.

The firm has recorded £207m in revenues in the 12 months to June 30, 2011, a 31 per cent increase on the previous year, while total asset under administration also rose 41 per cent in the past 12 months to June 30, 2011, from £17.5bn to £24.6bn.

Gorham says: “Even though the investment market faces economic uncertainty, I believe that the company is extremely well placed to build on the momentum that has been generated. Since the year-end we have seen net new business and net new clients both significantly higher than last year’s comparatives. We shall continue to deliver excellent service, which in turn helps maintain profitable growth and generates value for our shareholders.”


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  1. These were HL’s full-year results, not H1/2011, so the first two paragraphs and para seven all need correcting.

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