Hargreaves Lansdown has raised concerns about the affect Brexit uncertainty is having on investor confidence as its founder Peter Hargreaves sounds off about the benefits of leaving the European Union with no deal in place.
“Brexit is on the horizon and the prevailing political and economic turbulence is having an effect on investor confidence,” said chief executive Chris Hill in the platform’s annual results for the period ended 30 June.
Hill said regardless they would focus on establishing lifelong relationships with investors to navigate Brexit uncertainties and continue to grow market share.
Meanwhile, the platform’s billionaire founder Peter Hargreaves told Bloomberg “no deal” was the best approach for the UK to take to Brexit negotiations.
In an interview that coincided with the company’s results, Hargreaves said Germany, France and Italy would ultimately demand free trade due to their large exports to the UK.
He said Brexit had been handled poorly by UK negotiators, using a catch phrase popularised by US president Donald Trump to make his point.
“None of them know the art of the deal. And the amazing thing is they’ve never ever asked any of the people that really are great businessmen,” he said.
“They’ve left it to civil servants and not one of them has done anything of any worth in their lives.”
HL exploits trouble at rivals
Meanwhile, Hargreaves has exploited operational issues on rival platforms to win new business to grow its already dominant market share.
The investment platform attracted £7.6bn of net new business in the year to 30 June 2018, up 10% from £6.9bn in the previous year.
Assets under administration are up 16% to £91.6bn from £79.2bn last year. Pre-tax profit has increased 10% to £292.4m.
The direct-to-consumer platform benefited from “significant” transfer activity relating to operational issues on competitor platforms, which led to increased client numbers and continued wealth consolidation onto its platform.
Hill said growth in market share, client numbers and profits was driven by “excellent levels of service”. Hill said Hargreaves has reinstated its special dividend for shareholders, resulting in a 38% increase in the final dividend.
Following the trading update this morning, Hargreaves share price fell approximately 3%.
The full year results follow Hargreaves’ Q1 results when market volatility failed to hit its AUA, which grew 3.1% over the first four months of the year.
