Hargreaves Lansdown has been trialling an advice proposition that it plans to launch to market in 2023.
The investment platform said it went through a round of client testing which helped make “significant progress” with its ‘augmented advice’ offering.
The service will “establish a brand new experience for clients, incorporating insightful tools like financial well-being dashboards and calculators with nudges and coaching to provide an enhanced level of insight that supports them in hitting their financial goals”, the firm said in its 2022 financial year results.
A pilot for the ‘augmented advice’ offering will be unveiled at the end of H1 2023.
Hire
Hargreaves Lansdown has hired Richard Caldicott as advice director to lead its ‘augmented advice’ proposition and face-to-face offering.
Caldicott will join the investment platform after a 11-year stint at M&G, where he is currently deputy managing director of M&G Wealth Advice.
Riaan De Bruyn, currently director of strategy and proposition at M&G Wealth, will replace Caldicott after his departure, M&G confirmed to International Adviser.
Results
Hargreaves Lansdown has seen profits plunge by nearly a quarter as wage inflation, subdued flows and sluggish client growth dragged the platform down in 2022.
Underlying profit before tax, the D2C giant’s preferred metric, came in at £297.5m for the year to 30 June 2022, some 23% lower than the £366m ($440m, €430m) generated in 2021.
Operating costs climbed to £284.7m, a 7% increase year-on-year, as wage inflation ticked up 3% as it recruited more people to support the business and 92,000 new clients added during the year.
In its half-year results, Hargreaves revealed a £175m plan to “redefine wealth management” and increase its client base around 50% to 2.6 million by 2026, as well as deliver £20bn in net new business by the same year.
So far, it has spent around £33m investing in its operations and dual technology running costs.
But it has seen a significant drop off of new business coming in against the challenging market backdrop. Net inflows for 2022 were £5.5bn, 37% lower than the £8.7bn that came flooding in last year.
Downbeat markets wiped £11.7bn off its total assets under administration, which fell to £123.8bn.
Client engagement
The number of new clients signing up to the platform was nearly two thirds lower than the 233,000 who joined in 2021. Despite this, total clients climbed to a record high of 1.74 million.
Hargreaves added it was continuing to attract younger savers, with the average age of new clients at 36 years old, consistent with trends emerging during the pandemic savings boom.
It continued to see “encouraging engagement” via its app, recording 290 million digital visits in 2022 and a 61.5% increase in mobile engagement. On the back of this, a record 882,000 clients contributed to their ISAs and pensions in the tax year and net new business per client increased to £15,565.
Chief executive Chris Hill described the year as “one of contrasting moods”.
“It was welcome to see signs of recovery from the covid-19 pandemic, but that sense of optimism has been replaced by new challenges including inflationary pressure, international conflict and a worsening cost of living crisis that is now having an impact on so many lives. The result is that investor confidence has fallen significantly,” he said.
However, he said the board was confident Hargreaves’ transformation programme to capitalise on the £3trn addressable wealth and cash savings market in the UK will deliver value to the business and clients.
“We are currently seeing, and for the period ahead we expect to see continued, economic and geopolitical turbulence. This will continue to, impact key drivers of our business including asset levels and investor confidence. We have supported clients through such events and period for many years and each time we have come through stronger. This time will be no different.
“The strategy we outlined in February 2022 will deliver outstanding client service, strong growth and returns and continued market leadership for HL. We are therefore confident that execution of this strategy by the highly experienced team we have assembled will deliver the metrics and targets we set out at our investor day.”
