Hargreaves Lansdown has reported a 50% rise in full year profits to £403m from £269m.
The investment platform also booked an 8% rise in assets under management to £134bn. The total number of active clients increased 67,000 in the year to hit 1,804,000.
One area of weakness in the annual figures was net new business, which fell 13% to £4.8bn from £5.5bn.
The company’s active savings service grew significantly over the year, booking record new business of £3.2bn. This reflected the fact that returns offered on cash increased as interest rates were hiked.
The strong set of figures means recently appointed CEO Dan Olley, will have to guide the firm to another strong year if it is to maintain momentum. Olley moved over from a non-executive director role in August, replacing the outgoing Chris Hill, who has retired.
Olley said: “As I begin my CEO tenure, it is clear to me that at its core this is a strong business with fantastic heritage that has significant potential to benefit from the structural, demographic, and regulatory shifts in the UK and the expected growth in the wealth market.
“My early focus is to ensure we are set up to capture this growth opportunity, that we have pace of execution, cost discipline as we travel on this journey, and that we are giving our people the best opportunity to deliver for our clients and shareholders.”
Turning to the outlook for the coming year, Olley sounded a note of caution, an alluded to the fact clients may continue to seek to diversify away from equities.
“The current economic climate is likely to remain much the same for the coming financial year, and so will continue impacting investor confidence. This will provide a continued tailwind for flows into active savings but a potential constraint on net new investment flows and dealing volumes, although we will proactively mitigate this by helping all HL clients identify the opportunities that do exist and could be right for them, as we did with gilts.”
Neil Shah, executive director at Edison Group, commented: “Hargreaves Lansdown’s 2023 results align with the current subdued investor sentiment in the UK, revealing a 13% decline in net new business.
“New CEO, Dan Olley, is taking a pragmatic approach to steer the company toward capturing growth opportunities in the UK’s wealth market. His focus on cost discipline and the commitment to delivering for clients and shareholders bodes well for the company’s future.”
“Hargreaves’ improved performance should help rebuild investor confidence, following previous scrutiny regarding executive remuneration and controversial automated investment advice services,” Shah continued. “Overall, these results represent a positive step forward for the company, and it will be interesting to see how they continue to navigate the evolving financial landscape and attempt to increase investor activity as the cost-of-living crisis continues to rise.”
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