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Where’s the competition then? boasts Hargreaves
Hargreaves Lansdown shares jump nearly 4% as a trading statement shows the investment platform operator enjoyed a good ISA season.
Hargreaves Lansdown, operator of the country’s largest online investment platform, has reported a strong start to 2012.
Rallying stock markets lifted the value of client money and encouraged investors to put more money on Hargreaves’ Vantage platform in the first three months of the year. Assets under administration rose by £2.6 billion to £26 billion by the end of March with net inflows of nearly £1 billion.
The three months to 31 March is the third quarter in Hargreaves Lansdown’s financial year. Covering the end of the tax year and the annual ISA season it is the firm’s most important business period. After the market falls in the second half of last year the firm had feared there would be a slowdown in this crucial time.
Relief at the performance saw Hargreaves (HGRV.L) shares lead the FTSE 100 with a 3.8% or 18p gain to nearly 500p. The share price has recovered 16% so far this year, compared to a 3% advance in the FTSE 100.
Chief executive Ian Gorham praised the company’s performance but warned that the eurozone debt crisis would remain a huge factor in determining investor confidence and future business.
He took a swipe at critics who have forecast the competitive threat the company could face as other companies attempt to break into the growing market for serving self-directed investors. Existing rivals have stepped up their activities, for example, Barclays Stockbrokers, the biggest online share dealing platform, which recently expanded its coverage of investment funds, traditionally Hargreaves’ core area.
‘There has been much comment about increasing competition but we have not seen any material impact from this. Indeed we have enjoyed substantial inward transfers of both ISA and pension money into our Sipp [self-invested personal pension] for the period,’ said Gorham.
At the end of last year Hargreaves was hit by the row over its introduction of monthly platform fees. Questions remain over the validity of its business model if the Financial Services Authority decides to ban platform operators from taking rebates from fund managers. However, the company has consistently expressed its confidence in dealing with any regulatory changes.
Gorham said the company would provide an update on its ‘strategic initiatives’, such as the recent launch of a cash ISA at its full-year results.
Confirmation of the good start to the year that financial companies have had came from Jupiter Fund Management (JUP.L), up 1.7p to 241.7p. It said flows of money into its UK and European equity funds had turned positive for the first time in six months with overall net inflows of £55 million in the first three months of the year.
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