In a prepared statement accompanying the results, CEO, Ian Gorham said while costs remain controlled, the group now expects its FSCS levy contribution to be £4.6m for the year following a recent revision to the amounts being raised under the scheme.
This is more than double than last year’s £2.1m figure and while Gorham said it would be fully absorbed in the firm’s results to end June, he said: “It is extremely frustrating that shareholders must bear such costs with the current FSCS system placing an unfair burden on reputable and blameless firms.”
For the four month period that includes its primary asset gathering period leading up to the change in tax year, total net revenue was roughly in line with the previous four months, coming in at £96.9m compared with £97.1m in the comparable period in 2014.
According to Gohram, the firm’s main headwinds continue to be “lower interest rate margins compared to 2014 and the comparative effect of lower prices introduced on 1 March 2014, especially for clients holding fund assets.”
Revenues were also hit by the manner in which it collects overseas foreign exchange revenue; the firm has brought this operation in house because it says it will improve efficiency in the long term but, will have a short term impact of around £3.5m of the six months to June.
On the asset gathering side, the firm reported record net inflows in assets under administration of £2.75bn, 8% higher than the previous record set last year, it said.
Growth in assets was helped particularly by the pension freedoms enacted on 6 April.
“New assets of all types in the period 1 January to 5 April were a record for any similar period, but the period post 6 April has seen particular interest in pensions,” the firm said.
It added that cumulative net asset inflows for the year to date are now £5.00bn,slightly behind the £5.34bn it gathered over the 10 months in 2014.
Total assets under administration stand at £55.3bn, up 22% from the previous year.
Portfolio Plus
The other significant contributor to funds under management were the firm’s three new multi-manager funds launched during the period that together added £410m to FUM. And, it says, it is planning further funds in the second half of the year.
Hargreaves also announced plans to launch a new non-advised service called HL Portfolio Plus by 30 June, which it says will give its clients “the ability to invest directly in ready-made fully managed and rebalanced portfolios run by our investment experts.”
