Hargreaves Lansdown the UK’s largest D2C investment and share trading platform, published interim results for the 6 months until the end of Dec 2021, this morning.

Client funds up 17%

The earnings release showed net new business of £2.30 billion taking assets under administration to £141.20 billion, a gain of +17.0% over the same period in 2020.

Over 1.5m customers

Client numbers have also grown at the Bristol-based money manager and stood at 1.693 million, at the end of December, rising by 48,000 since the end of June 2021.

Dividend Increase

The firm raised its interim dividend to 12.26p from the previous 11.90p, the dividend growth came despite Hargreaves Lansdown recording revenues that were down by -3.0% at £291.10 million.

Pre-tax profits down

Which in turn translated into profit before tax that fell by -13% year over year, EPS came in at 27.8p per share versus 2020’s 32.10p.

43% market share

However, Hargreaves Lansdown believes its market share is now 43.30% and that figure creates a platform for it to target the wider wealth management market.

The firm set out its growth strategy at a capital markets day that accompanied the earnings release and in a presentation to analysts and investors, the firm outlined a five-pronged approach to what it called redefining the wealth market.

Hargreaves Lansdown’s growth plan

Those five prongs begin with developing the firm’s digital backbone through investment in data analytics, data transfer and cloud computing, to enable the scaling of the HL platform, a reduction of costs and an improvement in service through the adoption of automation.

The second prong is about leveraging data-driven insights to assist clients, building the new products and services that will allow clients to move their wealth, quickly, and into the right products.

Hargreaves Lansdown believes that this more efficient use of data will ensure that it has time to engage with clients, in high-value conversations.

The third part of the strategy is based on the rapid expansion of the products and services that it offers to clients.

The firm intends to launch 19 new ESG focused funds by 2024 with a view to increasing the proportion of clients’ assets that are held in its proprietary products.

The firm is also working on portfolio health, wealth building and allocation tools, that once again it hopes to have in place by 2024.

The last two prongs are an initiative to increase regular and active savings, the intention being to grow the group’s asset under administration through increased marketing spending and the formation of new distribution partnerships with banks.

Finally, Hargreaves Lansdown wants to build out the best human and digital advice platform by leveraging its 40 years of experience and insights into the D2C space and combining that with the latest innovations in technology to provide a game-changing proposition.

Futures outlook

Overall the group is aiming to increase its client base by +50.0% whilst at the same time boosting operating leverage and margins.

The firm anticipates a client base of 2.60 million customers by the end of the financial year 2026, and blended margins in the business of between 42 and 44 basis points, from the end of the financial year 2023 and beyond.

Speaking about the strategy CEO Chris Hill said that :

“In my 5 years as CEO, I have never been as excited about the opportunities we see for our business as now.”

Adding that:

“We have a vision – to transform the savings and investment experience, combining the best of human expertise and supercharging it with technology and data to deliver a uniquely personalised service that will make managing wealth, financial health and resilience easier and more intuitive than ever.”

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