Hargreaves Lansdown Share Discussion Threads

[lomax99] 04/9/2018 08:43

FT Advisor 30 August

Hargreaves targets adviser clients for platform growth


Hargreaves Lansdown is targeting clients of adviser only platforms as a source of future growth.

In its annual report, the FTSE 100 direct to consumer platform said it had assets under administration of £91.6bn in the year to 30 June 2018.

But the company said the total private wealth market in the UK was £1.6trn in size, £1.1trn of which it considered "addressable".

The company stated: "Outside the direct-to-consumer space, the bulk of this addressable market is held through independent financial advisers, independent wealth managers and vertically integrated firms.

"A significant amount of this investment pool will have been initially advised upon, maybe many years ago, but now receives no ongoing advice and little support.

"This provides a rich source of potential transfers to Hargreaves Lansdown as clients look to consolidate all their investments on to our platform."

The number of clients left behind by advisers is growing, according to the regulator.

The Financial Conduct Authority said in the interim report of its platform market study, published in July, it had seen a 9 per cent increase in the number of orphaned client accounts between 2016 and 2017.

The regulator warned orphaned clients could end up paying more with some adviser platforms imposing fees of up to 0.5 per cent in addition to their pre-existing platform charges.

Hargreaves said the direct to consumer platform market is £206bn in size, of which Hargreaves Lansdown has a 39 per cent market share.

The firm added it will continue to buy books of business held directly by asset managers.

The company said: "Industry expert Platforum also estimate that £30bn is held directly with asset managers who are increasingly realising that they are not set up to service direct retail customers.

"This provides a source of transfers or an opportunity to acquire the entire direct back books from fund management groups.

"During the year we acquired a back book from Old Mutual Global Investors and in previous years acquisitions have been made from Jupiter, JPMorgan, Legg Mason and BlackRock.

"We are actively pursuing similar deals working with fund groups and the FCA to ensure affected clients can be transitioned effectively."

The company added it was now the largest provider of Lifetime Isas in the UK, with 42,000 client accounts and assets of £218m. The company said about half of its Lifetime Isa clients were new clients to the business.

[stewart64] 30/8/2018 16:56

It was up and running for me again at around 4:20 before close...their end because they had a note on the site it was down.

[lomax99] 30/8/2018 16:27

No issues here, uninterrupted access.

[stewart64] 30/8/2018 16:19

Site is crashed just now..a lot of frustrated customers no doubt.

[lomax99] 08/8/2018 10:09

High valuation, yes, but the increased investment during the last year positions the business well for growth in the years ahead. Broker forecasts for YE 2020 suggests EPS of c. 70p, holding today's PE rating at today's opening price would translate into an share price of c. £28.65 - c. 41% higher in 2 years time.

[privileged] 07/8/2018 11:48

Very high valuation though

[lomax99] 07/8/2018 08:24

Another solid set of numbers, with investment to drive/support future growth.

[lomax99] 01/8/2018 13:53

Results next Tuesday..

[rabbrooks] 23/7/2018 15:48

I'll stay at HL but today i sold my holding for a 88% profit which reflected an annual profit of 22%. I an also pleased with the performance of the UK Select fund which i will continue to hold. Good company which may enter my portfolio again.

[privileged] 23/7/2018 08:16

HL priced for perfection surely.I switched to AJ Bell a couple years back and think the service is at least as good and is cheaper.

[robinnicolson] 16/7/2018 17:54

Citi:

"Any reduction in exit fees would likely only have a small impact on earnings for platforms such as Hargreaves Lansdown. But increased ease of transfer between platforms could lead to a lower retention rate (i.e. lower net flows). This has been stable, and high, at around 93% for many years. More transparency of pricing could also bring the relatively higher costs of platforms such as HL into consumer focus."

[robinnicolson] 16/7/2018 17:48

Barclays:

"The FCA found that customers who pay more for their platform tend to get greater functionality on average, and the FCA did not observe widespread instances of consumers paying more for no good reason. We believe this is the key point, the FCA not proposing any pricing actions, and highlighting that the more expensive platforms like Hargreaves do offer greater functionality. In our view, it is the quality and ease of use of the Hargreaves platform that results in its high customer satisfaction driving its market share and growth, and hence its PE rating (of 34x, towards the top end of its historical range), and we reiterate our Overweight rating with price target of 2100p."

"We highlight that in our view, the impact on Hargreaves Lansdown is minimal. While they may be on the higher end of spectrum in terms of pricing, the quality and use of the platform offers results in high consumer satisfaction driving its market share and growth. Revenues earned from exit fees are immaterial and hence any ban on such charges would not materially impact its bottom line. Being the largest player in the D2C platform market, Hargreaves is able to negotiate good fund discounts as we have previously written about but this unsurprising and natural for a market leader. It benefits the end customer and has limited impact on competition among asset managers. Hargreaves has also been innovative in its cash offerings which include Simple Invest and Active savings and have provided relatively good disclosures regarding charges on cash holdings."

[robinnicolson] 16/7/2018 15:26

Over the last six years the average client retention rate at HL has averaged over 94%.

[lomax99] 16/7/2018 12:16

Well I am sitting tight and bought more recently around this level. Expect these to at least double from here in the next 3-5 years....

[mozy123] 16/7/2018 12:11

Skinny, As a HL customer I was offered at the float, bought at 250p sold at 350p. :(

bought back at £12 and sold recently at £18.00 :(

Note to self! If i buy them back - dont sell mozy!!!

[lomax99] 16/7/2018 11:35

Suspect this is a storm in a tea cup. How many actually look to move in reality? HL. are reknowned for their service, so they are presumably likely to be net beneficiaries.

FCA might be better focusing on ring fenced protection (as suggested above), or perhaps providers that have really punitive exit penalties....


Update:

HL comment on switching:

Chris Hill, its chief executive, said: “Hargreaves Lansdown has been at the forefront of making transfers of investments and pensions easier and quicker and, as an example, we chair the industry’s working group on transfers mentioned in the FCA’s report. We welcome the FCA’s focus on switching between providers and hope this accelerates the adoption of technology across the industry enabling people to switch more easily.”

Analysts divided on HL:

hxxps://portfolio-adviser.com/analysts-divided-on-hargreaves-ahead-of-platform-study/

'Numis Securities agrees Hargreaves is a “structural growth story” and should remain so “possibly for decades to come”.

The broker said it expects Hargreaves and other D2C retailers to benefit from two structural drivers: the shift from institutionally managed defined benefit pension schemes to retail managed defined contribution schemes and the shift to individually managed portfolios away from adviser-managed wealth.

“We see these core growth drivers delivering teens percent growth for a generation even if HL doesn’t continue to take market share”.'

[skinny] 16/7/2018 11:31

I've been with HL since @1983 but never bought the shares at float 🙄

[mozy123] 16/7/2018 11:17

People stay with HL due to the superior service. Dont think this will have too much impact on HL. I sold my lot at £18.00 (not very good i know) so if this news drives them down to that level id be happy to pick them back up.

[broadwood] 16/7/2018 09:33

- Shares of Hargreaves Lansdown fell Monday after the Financial Conduct Authority said it was considering banning companies from charging exit fees which make it too difficult for customers to take their business elsewhere.

'Many advisers told us that they charge additional advice fees for switching platform because it is a full advice event which requires them to produce a suitability report, the FCA wrote.'

'We recognise advisers need to be fairly paid for their work. But it is not clear to us why meeting suitability requirements to switch platforms should outweigh the benefits of switching platform.'

At 9:09am: [LON:HL.] Hargreaves Lansdown PLC share price was -86.75p at 1970.25p

[brahmsnliszt] 16/7/2018 08:10

Thats all well and good but 100 pct protection for investors ring fenced holdings within nominee accounts would be far better received.

[lomax99] 16/7/2018 08:07

The FCA have released their Investment Platform Market Study today:



They indicate that they may consider banning exit fees for platform switches:




Update:

Analyst Stuart Duncan at Peel Hunt said that after his initial read of the 110-page report, it "looks relatively benign for sector, with none of the proposals likely to cause too much concern".

He noted that the FCA had found no widespread evidence of overcharging and that a key conclusion was that there that no widespread competition concerns and no findings of excess profitability.

[lomax99] 05/7/2018 08:38

Only just over a month to go until the results....

Nucleus, a comparative tiddler, is due to float later this month. It operates an independent wrap platform serving the IFA market (2,200 advisor users, £14.3bn AUA and 90,000 customers):



Of interest is the growth Fundscape anticipates in the advised platform market over the next few years:

'Platforms as a tool for retail distribution of financial products have become increasingly important. Accordingly, between 2012 and 2017, total AUA across the advised platform market grew at a compound annual growth rate of 23 per cent., to reach £350 billion. AUA is projected to grow by a further 113 per cent. to £745 billion by 31 December 2021 (Source: Fundscape Platform Market Report Q3 2017's 'Realistic Channel Projections').'

[stewart64] 23/6/2018 09:58

They have finally got around to acknowledging prices are incorrect but only on the individual share analysis and not on the summary page. Not sure why it has taken 24 hours to let customers know. The 15 minute delay price was wrong all yesterday.