Hargreaves Lansdown saw a more than 16% drop in new business last quarter, as the investment platform gears up for a private equity takeover in 2025.
The London-listed firm said it brought in £500 million in net new business in the three months to September 30, compared with £600 million in the previous quarter.
However, assets under administration finished the quarter in line with analyst expectations at £157.3 billion, helped by positive market movement of £1.5 billion.
The firm welcomed 18,000 new clients, up from 8,000 previously, driven mainly by its pensions and savings products.
Asset retention, a measure of whether customers are selling off their assets on Hargreaves’ platform, fell slightly to 88.6% from 89% in the first quarter.
Julian Roberts, an analyst at investment bank Jefferies, wrote on Tuesday that this could be to do with fears about tax increases in Wednesday’s Budget.
Labour is expected to increase capital gains tax, a levy on profits made on investments such as selling shares or property, as part of a bid to fund public spending.
Capital gains #tax (CGT) changes are looking more likely in the upcoming 2024 #AutumnBudget.
— Hargreaves Lansdown (@HLInvest) October 29, 2024
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https://t.co/iVCZxmWXbB#Budget2024 #CapitalGains #CGT
Earlier in October, Hargreaves Lansdown shareholders agreed to a takeover by a private equity consortium including buyout giant CVC Capital Partners and the Abu Dhabi wealth fund.
The £5.44 billion deal, which would take the Bristol-based company off the London Stock Exchange, is expected to complete in the first quarter of next year.
Chief executive Dan Olley said: “In the meantime, we remain as committed as ever to supporting our clients with the very best service, experience and value, and on executing our strategy.
“We are particularly mindful of tomorrow’s Budget, and will be on hand to support and guide our clients following any potential changes that are made.”
Mr Roberts. from Jefferies, added: “While flows may be weaker than expected, revenues (driven by volumes) are strong and the customer base continues to grow.
“Near-term headwinds from worries about the Budget may dissipate, and HL (Hargreaves Lansdown) approaches the expected completion of its acquisition in the first quarter of 2025 in good shape.”
