Hargreaves’ business booms as people turn to DIY investing
Hargreaves Lansdown is just the most recent DIY investment platform to report bumper business volumes as people use the pandemic as the opportunity to take control of their financial future.
The company added almost 85,000 new clients in the six months from June 2020, a 40% increase in net new business adding £3.2bn to its assets under management; as of the 31st December it had £120bn AUM, a 16% year on year increase, driving a 10% increase in half-year profits to £188.4m.
In announcing its results, chief executive Chris Hill said that more younger people have taken to the platform as the pandemic has ‘underpinned the importance of financial resilience’.
Since 2012, the average age of new clients on the Hargreaves platform has fallen from 45 to 37; in the first half of 2020, 47% were aged 30-54.
‘I wish to thank my colleagues for their hard work throughout this incredibly difficult time,’ said Mr Hill. ‘Their dedication has delivered a period of very strong growth with record new clients and increased market share against the backdrop of the pandemic and the political uncertainty of the US elections and Brexit’.
In volatile markets trading in equities was up 123% on the prior year; ‘While consumer sentiment leads to cyclicality of flow, what this period has showed us is that Hargreaves Lansdown and the broader wealth management industry is experiencing structural growth,’ the firm notes.
Hargreaves’ results follow equally positive numbers from AJ Bell and interactive investor with DIY investing booming as never before; whether rebounding from a Covid wallop because they had no rainy day fund, or fearing a repeat in the future, more people than ever are seeking the sense of being in control that comes with managing their own money.
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‘Over the course of the pandemic, many have found the time and seen the need to prioritise household savings which has enabled and led them to invest for the first time,’ says Hargreaves. ‘This event is extending a trend we have seen over several years now where investing has become not just a task for those approaching retirement but is now an important tool for individuals to support themselves across their entire lifetime.’
The company plans to up its interim dividend by 6% to 11.9 pence per share.