Tough markets offset growth in Hargreaves Lansdown’s business
Hargreaves Lansdown today said “difficult” market conditions in the first half of 2022 have halted its growth trajectory in causing the value of the assets administers to drop 9 per cent to £123.8bn.
The Bristol headquartered company said major downturns in the FTSE, Nasdaq, and S&P 500 offset £5.5bn worth of new business in a shift that saw its pre-tax profits fall 26 per cent.
As of 30 June 2022, the market turbulence has seen the FTSE drop 6.3 per cent, S&P 500 drop 20.6 per cent, and the Nasdaq drop 29.5 per cent since the beginning of the year.
The drop in Hargreaves Lansdown’s profits came as soaring inflation and the war in Ukraine reversed the record growth the UK firm experienced during Covid-19.
Hargreaves Lansdown said the inflationary pressures and Ukraine war “dented investor confidence” leading to “reduced asset values” and lower activity across wealth management as a whole.
The poor market conditions offset any boost Hargreaves Lansdown achieved via the bringing on board of 92,000 new customers.
Hargreaves Lansdown chief executive Chris Hill said: “Against a macroeconomic and geopolitical climate not seen in a generation… we have delivered £5.5 billion of net new business through the year and the quality of our service attracted a further 92,000 net new clients.