Hargreaves Lansdown sees client surge as private equity takeover nears, despite investment hesitancy

Hargreaves Lansdown has experienced a sharp increase in client growth, with 18,000 new clients in the last quarter as it edges closer to a private equity takeover.

In contrast to this positive trend, however, the flow of new assets into the platform has declined, registering fairly modest levels, as reported by City AM.

The investment platform which is based in Bristol, reported £500m in net new business, compared to £600m in the same quarter last year, pushing assets under administration for the firm to £157.3bn.

Ahead of the results, analysts had braced for a "relatively weak" quarter, highlighted by Peel Hunt's Stuart Duncan who cited ongoing "challenging" investor sentiment across the industry.

The release of third-quarter financial services reports in recent weeks has shown that concerns around the Budget announcement have caused investors' hesitation in entering the market.

Client and asset retention rates at Hargreaves Lansdown sat at 92 per cent and 88.6 per cent respectively, dipping slightly below last year's figures of 91.7 per cent and 89 per cent, and falling short of the company's long-term goals.

Meanwhile, the volume of share dealings per month increased to 738,000, up from 634,000 a year earlier, buoyed by an over 20 per cent rise in overseas deal volumes.

Buoyed by these figures and a higher level of assets managed, Hargreaves Lansdown enjoyed a substantial revenue jump to £196.5m for the quarter, marking an improvement from £183.8m in the same quarter of the preceding year.

Client cash balances closed at £12.7bn, up from £12.4bn the previous year, with the increase driven by net selling of investments by clients in September.

The takeover of Hargreaves Lansdown by a private equity consortium was given the green light by its board on 9 August and shareholders on 14 October.

A court hearing to sanction the scheme of arrangement is anticipated to take place in the first quarter of next year.

This deal represents another takeover of a London listed company, following a wave of departures from the London Stock Exchange this year.

Dan Olley, CEO of Hargreaves Lansdown, stated that while the platform awaits regulatory approval, the firm remains "as committed as ever to supporting our clients with the very best service, experience and value, and on executing our strategy".

"We are particularly mindful of tomorrow's Budget, and will be on hand to support and guide our clients following any potential changes that are made," he added.