Kingel
18 Feb 2016
Richard Hunter quits Hargreaves Hargreaves Lansdown head of equities Richard Hunter (pictured) has left the firm alongside analyst Keith Bowman.The pair, who were both active market commentators in the national press, left after the investment broker and fund supermarket closed its London office. News of their departure came as Hargreaves appointed fund manager Lee Gardhouse (pictured below) to a new role of chief investment officer.A spokesman for the company said it wanted to have someone focused on the role as it expanded its fund range.Citywire AA-rated Gardhouse has been responsible for running Hargreaves multi-manager funds since 2001, alongside the portfolio management service, having joined as a trainee fund manager in 1995.It recently launched a Strategic Assets equity and bond fund, its ninth fund in the range which invests in other funds.The firm declined to comment on whether shutting the London office was part of a wider cost-cutting initiative. Earlier this month, Hargreaves announced a 6% rise in half-year pre-tax profits to £108.1 million on revenues 10% higher at £158.8 million.Following a review of our PR operations, we have decided to centralise all our PR activities in Bristol,’ said Danny Cox, Hargreaves’ head of communications.‘As a result, Richard Hunter and Keith Bowman have left Hargreaves Lansdown. We would like to extend our thanks to them for their hard work and commitment to growing our stockbroking business and wish them well in the future.’Hunter and Bowman’s responsibilities will be split between senior analyst Laith Khalaf and Steve Clayton, head of equity research.Hunter has nearly 33 years’ experience in investment. Before joining Hargreaves in 2004, he ran Fyshe Horton Finney’s London office, and he was also previously an executive director at Natwest Stockbrokers.Bowman began his financial services career in 1986 and joined Hargreaves Lansdown in 2005.[link]
Kingel
16 Feb 2016
Rare opportunityÂ’ to bag cheap shares Online stockbroker Hargreaves Lansdown (HRGV) has been upgraded on the back of plans for a cash savings service.Shore Capital analyst Paul McGinnis upgraded his recommendation from ‘hold’ to ‘buy’ but does not have a target price on the stock. The shares rose 4% to £11.75 yesterday.‘We think Hargreaves Lansdown’s cash savings service, due to launch in H2 2016, has huge potential to attract new money to the platform,’ he said.‘The deposit service shares similarities with the way that the platform market changed the way that funds were bought and sold. Existing Hargreaves Lansdown Vantage clients hold significant cash savings at banks.'We think investors could be seriously underestimating the convenience factor offered by the service and we incorporate a revenue stream for cash savings for the first time.’He added that the negative share price reaction which came following the interim results along with wider market weakness offer ‘a rare opportunity to invest in what we view as one of the highest quality business models anywhere in the UK market’[link]
Kingel
04 Feb 2016
Pension reforms revive profits growth The government’s pension reforms have helped Hargreaves Lansdown (HRGV + ) buck rocky stock makets and resume profits growth at the country’s biggest investment broker.Half-year results today showed Hargreaves’ profits before tax rose 6% to £108 million in the six months to 31 December, up from £101.9 million a year ago.Inflows of new business jumped 23% to £2.3 billion boosted by a 73% leap in self-invested personal pensions (Sipps) following last April’s pension freedom reforms. Overall customer numbers advanced 47,000 to 783,000 and 32 company pension schemes joined its Vantage platform.The Sipp surge was accompanied by a further fall in Hargreaves' small annuities broking arm, however, where income fell from £1.1 million to £0.8 million as investors ditched annuities and sought out the income 'drawdown' facility on its pension.Chief executive Ian Gorham said the 'freedom' of not having to buy an annuity at retirement had made pensions more popular.Since 30 June assets under administration have lifted 7% to a new high of £58.8 billion despite the 3.5% fall in the UK stock market in the second half of 2015.This is a turnaround from September when the company announced its first fall in annual profits in eight years.In his results statement Gorham said: ‘Against a backdrop of fluctuating stock markets, Hargreaves Lansdown has continued to be the most popular destination for UK retail investors, with excellent new business for the period. In particular the pension freedoms continue to attract huge interest as we prepare for the important tax year-end period.’Nevertheless, shares in Hargreaves dropped 4% as the company recorded another drop in profit margins and revealed the costs of its diversification into savings and peer-to-peer lending.The Bristol-based broker has spent £1.5 million hiring staff for the HL Savings and P2P services it plans to launch in the autumn. This pushed the wages bill 19% higher to £30.3 million, raising operating costs by a similar amount to £50 million.It is also investing in upgrades for its iPhone and Android apps, which will be unveiled later in the year.The spike in costs explains why, despite a 10% increase in revenues to £158.8 million, profits were up just 6%.The other factor is the ongoing erosion of Hargreaves’ previously high profit margins. Revenue margins on funds slipped to 0.45% from 0.47% a year ago and are expected to dip to around 0.42% when commission is fully abolished in April and the company has to rely purely on platform fees paid by investors.Stock broking margins also fell to 0.27% from 0.31% while margins on cash deposits tumbled to 0.5% from 0.62% although this had been forecast by Hargreaves and is the mid-point in the 0.5-0.6% range it anticipates for this year.There was good news for shareholders, however, with an interim dividend of 7.8p, up 7% from a year ago.Elsewhere, Hargreaves’ multi-manager funds - which invest in other funds - attracted a net £369 million, up 35% on the year before. It recently launched the HL Strategic Assets fund and plans to follow this with the new HL High Income fund later in the year.Last summer's launch of Portfolio+, a ready-made portfolio based on these fund of funds, has attracted £200 million, or 7% of new business, which Gorham said was encouraging as it proved there was a middle band of customers between self-directed DIY investors and those who wanted to pay for fully independent financial advice.However, Gorham said Hargreaves would not launch a paid-for simplified online advice service based on Portfolio+. The company had asked customers if they would pay between £100 and £400 for so-called 'robo advice' and had received a clear 'no' in response.'People don't want to pay for advice,' he said, adding that people were unsure of what they were going to get.This comes amid a big debate in the wealth management sector over whether low-cost online investment
II Editor
24 Dec 2015
NEW ARTICLE: FTSE 100 could break 130-year record "As the last remaining traders, analysts and journos in the Square Mile down tools for the four-day Christmas break, they'll reflect on a year of extreme volatility. Stocks have struggled to recover from the August crash and markets have not been ..."[link]
Kingel
14 Oct 2015
Hargreaves Lansdown shares surge Online stock broker bucks a falling FTSE 100 after reporting a strong start to its financial year, despite the summer crash in markets.Hargreaves Lansdown (HRGV + ) has shot to the top of the FTSE 100 after the online stock broker reported record inflows despite market turbulence.Shares in the broker jumped 6.1% to £13.60, bucking a falling FTSE, which dropped 49 points, or 0.8%, to 6,293. New business inflows rose 47% over the three months to the end of September to £1.4 billion, up from £1 billion in the same period last year.Despite that, assets under administration fell by £500 million to £54.7 billion over the quarter, as August heavy market falls took their toll.'Positive investor reaction to the Hargreaves Lansdown Q1 trading statement has helped its shares break out to 18-month highs, bucking today's FTSE losses,' said Mike van Dulken, head of research at Accendo Markets.'The recent flood of interest (120,000 sign-ups) in next year's Lloyds share offer is also seeing the bulls banking on this helping out over coming quarters, hopes high that the broker will get a boost to its profits similar to that seen with the Royal Mail sell-off two years ago.'James Hamilton, analyst at Numis, hiked his price target on the stock to £14.60 from £12.80 on the news. 'Hargreaves Lansdown dominates a growth industry and its market position does not seem to have been negatively affected by the retail distribution review changes,' he said referring to the City regulator's ban on commission two years ago.'The groups's scale benefits are unmatched, providing it with by far the highest operating margin and the buying power to provide the cheapest fund prices on the market.'[link]
Kingel
24 Sep 2015
'game is up' for higher rate tax relief Hargreaves Lansdown says pension contributions from higher earners have more than doubled ahead of expected curb to tax reliefs.Hargreaves Lansdown has claimed that 'the game is up' for higher rate tax relief on pensions and revealed a big jump in contributions from wealthy savers ahead of its expected scrapping.The online stockbroker said the government was likely to move to a flat rate of tax relief on pensions, no matter which level of income tax the saver pays, after widespread opposition to a mooted plan to introduce a pension-ISA hybrid retirement savings vehicle.Citywire Money last month reported that the government was drawing up plans to scrap the relief and had met with pension providers to discuss the practical implications of the move.‘The game is up for higher-rate tax relief; higher earners may feel that’s unfair but the chancellor needs to balance the books and where else is he going to go but to the people who have the most money,' said Tom McPhail, head of pensions research at Hargreaves Lansdown.High earners pile in'Savvy investors are making the most of these earnings related top-ups while they still can,' he added, saying analysis of Hargreaves Lansdown clients showed that so far this tax year, pension contributions from 40% and 45% income tax payers were up 120% on the previous year. Since the summer Budget, they are up 61% compared to the same period last year.The government is currently consulting on changes to the taxation of pensions, and McPhail said the mooted pension-ISA, an alternative way for the government to raise more in taxes than under the current system, was 'meeting virtually unanimous opposition from the pensions industry and employers, with good reason'.At the moment the pension tax regime is exempt-exempt-taxed (EET), meaning contributions receive tax relief (equivalent to the highest rate of income tax you pay), growth in the pension is tax-free but the pension income is taxed, after the 25% tax-free lump sum is taken.ISAs are the reverse: taxed-exempt-exempt (TEE), meaning contributions are made out of taxed income, growth in the ISA rolls up tax-free and withdrawals are tax-free.The Budget paper asks for opinions on moving pensions to a TEE basis and adding a top-up when contributions are paid in.Pension-ISA 'dead in the water'McPhail said a pension-ISA hybrid would 'introduce a hugely complex two-tier system with some pension money being taxed on withdrawal and post-reform money being tax free’.‘Once you start exploring the transitional complexity, it is clear that the pension-ISA concept is dead in the water. It would be horribly unpleasant to deal with,’ he said.McPhail added that a pension-ISA system ‘could cause the pension system to collapse’ without the upfront incentives to save offered by the current pension system.‘Investors were very clear that they prefer the ‘bird in the hand’; not surprisingly, they don’t trust future governments to honour promises made today,’ he said.Instead, it looks increasingly likely that higher-rate taxpayers will see a cut in the amount of relief they receive on their pension contributions.McPhail said there was a ‘growing possibility’ that the system will be reformed in favour of a new flat-rate of tax relief.While McPhail did not predict the flat rate that could be introduced he said a £1 top-up for every £2 saved was popular. Former pensions minister Steve Webb argued for a 30% flat rate but current pensions minister Ros Altmann told the Financial Times in July that current tax relief given to higher earners was ‘bound to be regressive’, prompting some to speculate that higher rate relief would be abolished altogether.[link]
Kingel
10 Sep 2015
Numis upgrades Hargreaves Lansdown Numis analyst James Hamilton has upgraded Hargreaves Lansdown (HRGV) from ‘hold’ to ‘add’ after the investment broker’s annual results yesterday.Although full-year profits fell 5% to £199 million Hamilton raised his share price target to £12.80 in the belief that the volume of new business would offset a decline in margins.‘We continue to believe that Hargreaves Lansdown justifies a significant premium valuation given its dominant market position in a growth segment of a growth market,’ he said.‘We expect substantial industry growth due to the increase in self investment and the shift from defined benefit pensions to defined contribution pensions. We also expect [pensions] auto-enrolment to significantly increase the proportion of the population with money to manage, most of which will have to be done through self-invested platforms like Hargreaves Lansdown due to the scale of these pension assets.’He added that ‘real industry growth’ will also boost the firm, which will reap ‘scale benefits’ which are unmatched in the industry.The shares closed 7% or 79p higher at £11.94.[link]
Kingel
09 Sep 2015
Hargreaves Lansdown suffers first fall Choppy stock markets and falling margins push profits lower at UK's biggest investment supermarket for the first time in a decade.Hargreaves Lansdown (HRGV + ), the country’s biggest investment supermarket, has suffered its first fall in annual profits since joining the stock market in 2007.Choppy stock markets, falling margins, a £4.4 million payment to the Financial Services Compensation Scheme and the temporary loss of currency trading income as it brought the process in house, lowered pre-tax profits by 5% to £199 million in the year to 30 June.This is the first time in a decade that Hargreaves has seen profits decline, although profits have surged 2,500% since making £7.6 million in the year before its flotation on the London Stock ExchangeMomentum has faded in the past two years as the group has grappled with the abolition of commission payments from fund managers.The re-pricing of its Vantage platform – which saw customers pay an explicit platform charge for the first time last year – knocked £18.5 million off 2015 revenues with the low margin on client cash reducing income by a further £17.3 million.Chief executive Ian Gorham said: ‘You can’t take a £35 million hit like this and not see an impact. To only see a 5% reduction [in profits] is very good,’ he told Citywire.Excluding the changes to fund pricing and low interest on cash, the company said underlying profits were up 13% and that it would return to profits growth next year.Assets under administration rose 18% to £55 billion with customer numbers up 84,000 to 736,000, although this was less than the 144,000 it attracted in 2014.The company invests heavily in technology and earlier this year revealed plans to launch a cash portal and a push into peer-to-peer lending. It says it is seeing a ‘material’ contribution from smart phone transactions using its app: with trading in shares climbing 65% and in funds by 200% in the past year, although the company declined to give specific numbers.In May the company launched Portfolio+, a so-called 'robo advice' initiative, which aims to bring in new online investors with an easy-to-buy range of pre-set fund portfolios on its website.Despite a 3% dip in earnings per share, the company declared a 3% increase in total dividends for the year of 33p per share.On the stock market, the company’s shares jumped nearly 7% or 75p to £11.90 as analysts said the ‘headwinds’ Hargreaves faced this year would abate in 2016. Stuart Duncan of Peel Hunt maintained his ‘hold’ stance with a target price on the shares of £13.45, saying the stock deserved its premium rating over traditional wealth managers. The shares have gained 15% this year and have trebled in price over five years.See Web page for graph[link]
Kingel
04 Sep 2015
CityWire Market volatility won’t hold back Hargreaves LansdownIncreased DIY investing is expected to boost stockbroker Hargreaves Lansdown (HRGV) despite market volatility. Barclays analyst Daniel Garrod reiterated his ‘overweight’ recommendation but reduced the target price from £15.00 to £14.50. The shares rose 1.2% to £11.10 yesterday.‘Hargreaves Lansdown reports full-year 2015 results on 9 September. Ahead of that we update for the quarter to June index sell-off, which saw the FTSE All Share -2.5% versus March,’ he said. ‘This marking to market causes us to lower full year 2015 underlying diluted earnings per share by 1% to 33.1p and full-year 2016 estimates by 4% to 39.5p. ‘With the increased market volatility we become slightly more cautious on full-year 2015/16 flows but still believe these are impressive…and do not imply any loss of market share in the D2C platform space.‘We believe that Hargreaves remains well placed to capitalise on favourable structural growth created by increased DIY investing.’ [link]
Kingel
29 Jul 2015
Hargreaves stops advice on pension transfers Hargreaves Lansdown has temporarily halted giving advice on pension transfers after being swamped by demand following the 'freedom' reforms.Hargreaves Lansdown has suspended advice on transfers from final salary schemes following the introduction of the pension freedoms.Under the pension freedoms, on 6 April, savers can withdraw their entire pension pot, subject to a tax charge at their marginal rate of income tax.Providers do not have to offer all the flexibilities allowed under the pension freedoms rules but must allow savers to transfer their pension funds out. However, transfers from defined benefit schemes valued at over £30,000 cannot go ahead unless the member has received financial advice.Hargreaves Lansdown has its own independent financial advice arm, but has now stopped taking on new advice cases involving transfers out of final salary schemes.The company said that it had seen transfer advice requests more than double since the introduction of the pension freedoms, which does require savers to seek advice in certain circumstances, for instance where their schemes offer safeguarded benefits or guarantees.Final salary - or 'defined benefit' - schemes are an older and increasingly rare type of workplace pension where savers are guaranteed an income based on their length of service with a company and their salary at retirement.They contrast 'defined contribution' schemes, which provide an income based purely on employer and employee contributions.Tom McPhail (pictured), head of pension research at Hargreaves, said that it was running ‘at capacity’ and that the stoppage would only last ‘days and weeks’, rather than ‘weeks and months’.‘We stopped accepting clients for pension transfer advice a couple of weeks ago because we are running at capacity,’ he said.‘We would rather not take on any work in order to continue to process the work we have in good time.’It is as yet unclear how many savers the stoppage affects. Hargreaves was contacted for comment but a spokesperson was not available to say how many people had been turned away.Latest figures this month from the Association of British Insurers – of which Hargreaves is not a member – estimated that savers taking advantage of the pension freedoms have withdrawn more than £1.8 billion from their pots.[link]
mcescher
29 Jul 2015
Infographic comparing HL. and BRW This infographic compares Hargreaves Lansdown and Brewin Dolphin Holdings plc, they have details on valuation etc. [link]
Kingel
24 Jun 2015
Hargreaves Lansdown launches low-cost Hargreaves Lansdown launches low-cost advice serviceFund supermarket claims its retirement planning will fill an 'advice gap' left by the government and financial services industryRetirees are being offered a third-way advice service that sits between pension guidance and full-blown financial planning. Fund supermarket Hargreaves Lansdown has launched the HL Retirement Planning Service that it claims will fill the ‘advice gap’ between the government’s Pension Wise initiative and costly financial advice. For a flat rate of £395 plus VAT, Hargreaves Lansdown says it will help retirees understand their retirement income options and the tax consequences of each option but will stop short of providing advice by telling investors which option to go for. After filling in a short questionnaire investors will receive a report and an hour with a financial adviser. The report and adviser will identify how much secure income the retiree may need and how to make sure income levels in drawdown are sustainable. Retirees will also be asked to think about how much contingency money they need to protect their dependents and possibly even to pay for care in later life. Although the adviser will not tell a retiree which retirement option is best for them, such as going into drawdown or buying an annuity, they will be able to tell them where to go to convert their pension into income. If a retirees decides they want more help from an adviser they can move into full financial planning and the flat-fee for the retirement service will be waived. Hargreaves Lansdown charges up to 2% of the total value of the investment for full pension advice. Tom McPhail, head of pensions research at Hargreaves Lansdown, said the service ‘picks up' where Pension Wise, the government information service, stops. ‘Pension Wise may tell you to shop around if you want to buy an annuity, it may talk to you about drawdown and point you to a website and talk through the merits of drawdown and how it may work. [Pension Wise] will talk about tax,’ he said.‘We take it to the next stage and work out how much tax you will be liable to pay and how to shop around. We will use cashflow modelling to model your income stream and how it will be affected by withdrawals.’McPhail said the service aimed to get people to the point where ‘they are comfortable with making a decision or recognise that they need more help’. Hargreaves Lansdown hopes its service will appeal to a range of investors.‘We expect a lot of the sub-£25,000 pots will go out as cash but still someone may feel the need to sense check that is OK for them,’ said McPhail. ‘We should not judge or pigeon hol people based on their pot size. Michelle Cracknell (chief executive of Pension Wise) said Pension Wise have had customers with £1 million pension pots using the guidance service.’ The fund supermarket estimates there is a market of 120,000 for the retirement service based on a retirement income market of 350,000 to 400,000 people. Research by Hargreaves Lansdown shows two-thirds of people want to be able to talk through their options with an expert and half are willing to pay up to £500 for a simple service. Data from Hargreaves Lansdown shows that since the pension freedoms were introduced in April, drawdown is by far the most popular option, accounting for three quarters of all retirement income transactions. Another 8% of people have bought an annuity and 17% of people have purchased an ‘uncrystallised fund pension lump sum’, a different type of drawdown option. The average value of funds in drawdown after the tax-free cash is taken is £117.249.[link]
xTitanic
02 Jun 2015
Resources Funds HL have removed First State Global Resources and JPMorgan Natural Resources from its Wealth 150.Only 4 years too late!.
Kingel
24 May 2015
Hargreaves Lansdown slams hike Update) Investment supermarket Hargreaves Lansdown (HRGV + Add to favourites ) has hit out at the Financial Services Compensation Scheme (FCSC) for more than doubling the amount of money it is required to pay.The FSCS – which compensates customers of financial firms that have gone bust – is funded by a levy on all regulated financial services providers and financial advisers.This year Hargreaves Lansdown has seen its FSCS levy jump to £4.6 million from £2.1 million last year as the scheme strives to cope with a surge in pension claims linked to the mis-selling of unauthorised collective investments. 'Crazy' systemThe FSCS is raising £287 million from financial firms this year, up from £276 million in 2014/15. It has recently said a review of its funding could be needed following the government’s pension freedom reforms which could encourage more people to transfer their savings into unsuitable investments. In a statement accompanying the trading update chief executive Ian Gorham said: 'It is extremely frustrating that shareholders must bear such costs with the current FSCS system placing an unfair burden on reputable and blameless firms.' Speaking to Citywire he said FSCS funding was 'crazy' and needed an overhaul. He suggested firms in higher risk areas be required to take out more insurance or put more capital behind their business to compensate their customers when things go wrong.As a provider of a low-cost self-invested personal pension (Sipp), he said Hargreaves Landsdown did not offer access to the unauthorised funds that had got some financial advisers and other 'complex' Sipp providers into trouble. Margin pressureThe increased levy comes at an awkward time for Hargreaves' which has seen its profit margins cut following the abolition of commission from fund managers and the re-pricing of its Vantage platform last year.Figures for the first four months of 2015 show Hargreaves again pushing new business to a record high, helped by a late boost to pension activity from the government's reforms in April. Yet despite a 22% leap in assets under administration in the past year to £55.3 billion, operating revenues are down 0.2% to £96.9 million. Over 10 months to the end of April operating revenues are up 0.7% to £241 million.Gorham said the main ‘headwinds’ buffeting the company continue to be the lower interest rate margins on cash held by customers on Vantage as well as the introduction last year of a platform fee. The company has also spent £3.5 million bringing in house the work of collecting overseas foreign exchange revenue.He told Citywire this year was a transitional year as the company adjusted to a 0.45% margin on customer assets compared to the margin of at least 0.6% it previously enjoyed. 'Next year we'll be comparing like with like,' he said.Pension freedom boostWhile revenues are flat the statement shows the business is expanding with 40,000 new customers joining Vantage in the first four months of the year and net inflows of £2.75 billion. Its total number of active customers now stands at 715,000, up 13% on a year ago. Gorham said Hargreaves had seen a 'considerable' increase in pension business following the introduction of the freedom reforms on 6 April, giving members of defined contribution retirement schemes complete control over their pension pots. However, he said it was too early to see them in the company's results as pension transfers took several months to complete.The company was relieved to see the reforms had not resulted in mass withdrawals. ‘We have also experienced lower than expected withdrawals from pensions as clients appear to be using the freedoms extremely sensibly, further evidence of the wisdom of trusting the British public with their own money,’ said Gorham in his statement.Hargreaves Lansdown shares dropped 47p or 3.7% to £12.34 and are up 22% this year. Broker downgrade
Kingel
21 May 2015
Hargreaves Lansdown downgraded Fund supermarket Hargreaves Lansdown (HRGV) has been downgraded after reporting flat revenues and a doubling of the levies it pays to the Financial Services Compensation Scheme (FSCS).Peel Hunt analyst Stuart Duncan downgraded his recommendation from ‘buy’ to ‘hold’ with a price target of £13.45. Shares in the online stockbroker fell 1.9% to £12.56 yesterday.While he said Hargreaves retained a ‘dominant position’ in the UK market and assets under management had growth over the four months to April, ‘revenues for both the four and 10 month periods were broadly unchanged on the prior year’.‘In addition, Hargreaves has been notified that the FSCS levy has increased to £4.6 million from £2.1 million a year ago. This reflects the failure of a number of Sipp operators, and it is difficult to predict what the future level of the levy will be,’ said Duncan. He added that dominant market position and ‘strong asset growth generated justify a premium valuation, although we think the current [value] is high enough for now’[link]
