Hargreaves Lures New Customers, Shaking Off Woodford Woes

(Bloomberg) -- Hargreaves Lansdown Plc attracted more new clients in the three months through September, a sign the platform is moving on from the fallout of Neil Woodford’s decision to freeze his flagship fund.

The U.K.’s biggest online investment platform got 35,000 new clients for the period, it said in a statement on Thursday. That’s 21% higher than the 29,000 clients it signed on for the same quarter of last year.

Hargreaves has come under intense scrutiny for its longstanding support of U.K. stock picker Woodford. The company said in June that a quarter of investors using its platform were exposed directly or indirectly to the now frozen LF Woodford Equity Income Fund. Woodford shocked the financial world that month when he suspended withdrawals from the fund, citing an inability to sell holdings quickly enough to meet redemption requests.

Assets under administration rose to 101.8 billion pounds ($124.5 billion) as of Sept. 30, up from 99.3 billion pounds at the end of June. The firm’s net revenue rose to 128.1 million pounds for the third quarter, compared with 120.8 million pounds for the same period a year earlier.

The company warned that new business was being impacted by “weak investor sentiment” from Brexit and political uncertainty, as well as global macro issues including trade tariffs.

Hargreaves removed Woodford’s fund from one of its “favorite” lists after he stopped redemptions. Hargreaves also waived its platform fee for clients who had invested in the suspended fund. The company estimated the loss of revenue would be about 360,000 pounds per month while the fund remains closed, according to the company’s last earnings statement in August.

Hargreaves managers including Chief Executive Officer Chris Hill and Chief Financial Officer Philip Johnson will forgo their 2019 bonuses, according to the August statement.

The platform had received 41 million pounds in fees from clients’ investments in Woodford’s flagship fund in the five years before the suspension.

To contact the reporter on this story: Suzy Waite in London at swaite8@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Ross Larsen

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