Hargreaves Lansdown welcomed 67,000 new clients to its platform in the latest financial.
This number was significantly down on the 233,000 net new clients it brought on in 2021 and 92,000 in 2022.
In its financial report for the year ended 30 June 2023, the investment platform said people have less disposable income, investor confidence is low, and the outlook remains uncertain.
Against this challenging backdrop, the business said it has delivered “robust” financial performance, having attracted £4.8bn of net new business in the year.
Total assets under administration and active client numbers to £134bn and 1.8 million respectively.
Despite the slowdown in client growth, Hargreaves Lansdown reported revenue for the full year of £735.1m, up 26% on the prior year (2022: £583.0m).
Meanwhile, profit for the year was £323.7m, up from £215.8m the previous year.
Hargreaves Lansdown 2023 financial performance
“We have seen continued base rate increases throughout the year and have passed over 85% of the benefit through to our clients over the last 12 months,” said chief financial officer Amy Stirling.
“Net interest margin has also increased as a result and it is encouraging to see growth across all our key revenue lines in the second half of the year.”
New chief executive Dan Olley, who took up the post in August this year, said the current economic climate is “likely to remain much the same” for the coming financial year, and so will “continue impacting investor confidence”.
“This will provide a continued tailwind for flows into Active Savings but a potential constraint on net new investment flows and dealing volumes,” he added.
“Although we will proactively mitigate this by helping all HL clients identify the opportunities that do exist and could be right for them, as we did with gilts.
“We will also provide tools to help clients efficiently consolidate assets to save them time and help us provide increasingly personalised services, whether they want to interact digitally or speak to an HL colleague directly.”
He said many people are confused by the array of jargon and terminology, or put off by the wide range of product options available to them.
This often results in inertia as investing is put off ‘until tomorrow’.
And the current economic environment is only exacerbating this issue, putting more demands on people’s finances, and dropping saving and investing down the list for many.
“The size of our client base is a significant differentiator in enabling us to have a strong gauge on changing client needs and our ability to therefore respond to help make investing accessible and understandable to everyone,” said Olley.
“Doing this for a small number of clients may be relatively straightforward. However, to offer this proactive and personalised service in a scalable and cost-effective way to over 1.8 million clients, each with different needs, knowledge and experience, is a completely different challenge.
“It demands that we combine the best of our curated knowledge and market insights, with advances in technology and our digital platform, to help our clients identify the best savings and investment options for them.
“For example, earlier this year it became clear from our client interactions and market trends that gilts could be an attractive yielding investment option for higher rate taxpayers and those that have used their full ISA allowance.
“Through personalised and targeted education-based content, we were able to help clients take advantage of this opportunity, investing over £430m in July.”
Commenting on the results, James Fox – an equity research analyst at investing comparison platform InvestingReviews.co.uk – said: “With regards to investor activity, the slight uptick in trade volumes towards the end of the financial year may be a sign of improving sentiment.
“Moreover, with interest rates likely to moderate over the coming year, the return of capital to equities could provide a further boost.”
