While Hargreaves believes the revenue model could be adapted to meet potential regulatory changes (more explicit charging likely), there is clearly an element of uncertainty on the potential impact. Fundamentally the business continues to perform strongly.
JON HOCKING | MORGAN STANLEY
We continue to believe that HL should trade at a material premium to the asset managers as a consequence of 1) lack of asset performance risk, 2) falling cost-income ratio and 3) longer duration assets due to the very high proportion of assets held in tax wrappers.
ROBIN SAVAGE | COLLINS STEWART
We expect Hargreaves Lansdown will adapt to new rules without losing revenues or incurring large costs. We expect platforms will change their agreements with product providers to adhere to the FSA’s rules (currently unpublished).