Why Citi remains convinced Hargreaves Lansdown is a sell

The RDR will also cause margin pressure, due to the greater visibility and customer focus on costs, on all parts of the investment chain.

‘Whilst Hargreaves Lansdown is currently the beneficiary of new RDR rules which force platforms to offer in-specie transfers (i.e. no need to liquidate holdings when transferring assets between platforms), this greater ease of transfer should also, in our view, increase competition for Vantage,' the analysts said.

With the share price at 817p and a target price of 675p, factoring in a dividend yield of 3.4%, the Citi analysts forecast total return of -14% and therefore reiterate their ‘sell’ recommendation.

Conversely, analysts at Charles Stanley say the stock remains a ‘hold’. They said the group's investment in technology and its product range has paid off as it has fed through to assets under administration growth.

'In the most recent reporting season Hargreaves Lansdown has increased assets under administration by 16% in a period when the FTSE All Share is up 7%, due to strong net business inflows,' the analysts pointed out in a note to clients.

'As a result the group has reported record profits and impressively it has achieved positive ‘jaws’ of 10% between revenue and cost growth.'