Chief executive Peter Hargreaves (pictured) says the firm will be paying its advisers – known as client consultants – a salary as well as charging its clients a fee depending on their assets. Hargreaves Lansdown currently has 300,000 clients on its Vantage platform and 65 advisers across the UK.
Hargreaves says: “We are well on the way with what our consultants’ contracts will look like. In the next few months, we shall propose they get a salary and they will make a straightforward charge to the clients.The consultants will get a bonus depending on quality of their advice and lack of complaints against them. It will not be a commission but the straightforward chance to earn a discretionary bonus.”
Hargreaves says he hopes to have the new contracts in place by April.
Last week, Hargreaves Lansdown revealed that profits for the last six months of 2009 rose by 9 per cent to £39.8m compared with £36.5m for the same period in 2008.
Total assets under administration jumped by 58 per cent to £15.6bn from £9.9bn while new business flows stood at £1.4bn against £0.9bn.
The firm is also planning to pay as much of its dividend as possible in the current tax year, given the 10 per cent increase in the top rate of tax and the impending general election. The board says it is to pay an interim dividend of 8p per share and a special dividend of 1.6p per share, payable to shareholders on March 26. This amounts to a total dividend of £44.6m.