Hargreaves Lansdown says the pandemic brought about a generation of lockdown investors
The Hargreaves Lansdown share price fell by more than 11% on Monday morning as the investment platform warned the pandemic-induced boom in trading may not be here to stay.
The FTSE 100 company added that the pandemic has, however, brought about a generation of lockdown investors.
Hargreaves Lansdown confirmed a record number of customers joining the investment platform throughout the year ending in June.
The Reddit movement focused on Gamestop and AMC stocks were a particular source of demand, as equity dealing volumes increased by 54%.
However, as lockdowns came to an end, the investment platform confirmed that the surge in trading activity did the same thing, bringing about the dramatic fall in its share price seen today.
Hargreaves Lansdown saw its profits fall by 3% compared to the year before to £366m as its costs rose.
During the previous financial year, 83% of new clients were below the age of 55, while 98% of trades on the platform are now being done online.
“This younger mix of clients underpins our future growth because their investment behaviours mirror the trends of previous cohorts: we know what they need from our 40-year track record of supporting clients through their financial lives. As we work with these new clients on similar paths, the lifetime value of our overall client base will increase,” CEO Chris Hill said in his review of the results.
Hargreaves and Lansdown’s total dividend for the year was down 8% to 50.5 pence per share.
Moving forward, the company is expecting to see stronger client activity in the coming year with investment in the client engagement experience on the cards.
“We have delivered a record performance and exceptional growth during an extraordinary and challenging year. Our investment in the scalability, diversity and resilience of HL’s business model has resulted in a record 233,000 net new clients and £8.7 billion of net new business in the period, taking total clients to 1.645 million and assets to £135.5.”
“This has been an extraordinary year and I am proud of how our colleagues responded and continued to deliver to clients throughout this challenging period. We have not furloughed our people, enacted any COVID related redundancy programmes or sought any Government assistance,” Hill said.
