Hargreaves Lansdown shares plunge as pandemic trading boom ends

Like other investment platforms, Hargreaves was boosted by bored Britons trading volatile stocks during lockdown.

Wild market swings during the crisis prompted an army of retail investors to mobilise on social media platform Reddit and pile into so-called “meme stocks” such as GameStop, the US retailer, and AMC, the owner of Odeon.

However, the trading boom has receded since work from home diktats were lifted and workers returned to their desks.  

The Bristol-based fund supermarket also announced plans to invest £175m in the company’s tech capabilities over the next five years and launched a financial advice service to take advantage of a “key inflection point” in the UK’s wealth management market.

It said: “Now is the right time to target the broader wealth management market and set a new standard for how the UK saves and invests.”

Julian Roberts, an analyst at Jefferies, said: “We have thought for some time that Hargreaves Lansdown would have to sacrifice some profitability for growth as structural headwinds mounted.”

Hargreaves’ total assets under administration rose 17pc during the period to £141.2bn, while total revenues slipped 3pc to £291m.

Analysts at Peel Hunt said the hit to profitability “reflects revenue headwinds from both trading activity and prevailing interest rates”.

Hargreaves, which holds a market-leading 43pc share of Britain’s consumer investing sector, has increasingly come under pressure from rivals such as AJ Bell and Freetrade.

In November, AJ Bell launched a commission-free service similar to Robinhood, the American smartphone app that played a major role in the “meme stocks” frenzy, in an attempt to entice a new generation of traders into the stock market.