Hargreaves Lansdown assets fall as choppy markets take toll

Hargreaves Lansdown said Tuesday assets under administration fell in the fiscal first half of the year as new business flows were hurt by rising market uncertainty and volatility owing to geopolitical events.

For the six months to 31 December, assets under administration fell 6% to £85.9bn, down from £91.6bn at the June end, but pre-tax profits edged 4% higher to £153.4m from a year ago.

The fall in assets under administration comes as net new business was offset by 'significant negative stock market movements impacting asset values,' the company said. Net new business slumped 24% to £2.5bn from £3.3bn year ago.

The company added 45,000 net new clients to its services in the six months to 31 December 2018 and grew its active client base by a further 4% to 1,136,000.

The company declared a 2% rise in the interim dividend to 10.3p a share.

The company said Brexit uncertainty would continue to impact markets and muddy financial decision making, prompting clients to hold off investing more in volatile markets.

'The second half of our trading year is traditionally our stronger half for new business, including as it does the tax year-end, which acts as a natural incentive for clients to use tax allowances,' said Chris Hill, Chief Executive Officer.

'Investor sentiment and stock market levels are usually key to the levels of new business but this year has the added complication of Brexit. Such uncertainty during our busiest time of year is clearly not helpful for predicting new flows and business volumes, but we will be prepared operationally to deal with any outcome.'