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Hargreaves breaks records & celebrates 'immense' Royal Mail boost
by Jun Merrett on Oct 15, 2013 at 07:57
Hargreaves Lansdown has reported assets hitting fresh highs over the three months to the end of September, and said the Royal Mail flotation, which is not captured by its interim management statement released today, had resulted in 'immense' levels of business.
The discount broker boosted client numbers by 20,000 to 528,000 and increased assets under administration to £39.3 billion over the three months to the end of September.
The company said the key drivers were strong new business inflows of £1.3 billion, up 129% from the £550 million reported over the same period last year, and improved investor confidence and stock markets.
It attracted 20,000 new clients over the three months, a 186% increase over the same quarter last year when it brought in 7,000 clients.
Ian Gorham (pictured), chief executive of Hargreaves Lansdown, said the broker had benefited from the flotation of the Royal Mail and would report the resulting uplift in clients as a result of the move in the next quarter.
'The beginning of the second quarter has seen unprecedented public interest in the flotation of the Royal Mail. Public offerings of well-known companies have historically substantially boosted our client numbers.
'The rules of the offer prevent us from immediately disclosing details of participation through Hargreaves Lansdown, but suffice to say it was immense.
'In addition to interest from existing clients, a large proportion of our Royal Mail investors were new clients, many investing for the first time. Some will have used our services solely for facilitation short-term Royal Mail profits, but we expect to retain most as new investors.'
Revenue was also up to £78 million, compared to the £69 million reported last year.
Assets under administration for Vantage, Hargreaves' direct to consumer platform increased by 8% to £37 billion in September from £34.2 billion in June. Assets held in the company's Portfolio Management Service and range of multi-manager funds also increased by 10% to £3.7 billion in September, from £3.3 billion in June.
Hargreaves added that although its clients experienced a 'reduction' in services when its systems were overwhelmed by client demand for Royal Mail shares, it consider there were no notable financial implications, although it apologised for the inconvenience and said it would consider any lessons to be learned for the future.
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