Private investors have been running scared of stock markets in the past six months, Hargreaves Lansdown has revealed, with a 20% fall in the amount of new money it attracted.
Net new business of £2.25 billion in the half year to December was 20% down on a year ago but better than the 34% drop seen across the retail industry reported by the Investment Association.
“It was a decent performance in what was a muted six months,” said chief executive Ian Gorham.
“We gained 23,000 new clients taking us to 675,000 and that was without the benefit of a rising stock market and the interest created by Royal Mail’s privatisation a year ago.”
Hargreaves shares fell 52p, or 5%, to 993p on the slower than expected inflows. Gorham reckons the general election could provide a short-term boost but then create a lull.
He said: “We are a nation of last-minute decision takers. We could have double whammy of ISA sales and tax planing in April and investors buying into the markets ahead of the election.
“Then May could be depressed as they wait to see what a new government does.”
Hargreaves’ assets under administration rose 13% to £49.1 billion but pre-tax profits were down 2% at £102 million.
