Hargreaves Lansdown benefits from wave of young retail traders

Hargreaves Lansdown reported a jump in first-half profits, helped by a rush of younger users joining the UK’s largest investment platform while under tight coronavirus restrictions.

The FTSE 100 company’s pre-tax profit rose by a tenth in the six months to the end of 2020 to £188m, while assets under administration climbed 15 per cent to £121bn compared with the same period a year earlier. It raised its interim dividend 6 per cent to 11.9p, the group said on Monday.

Retail investment platforms have prospered during the coronavirus pandemic as new users stuck at home flocked to trade stocks, commodities and derivatives while markets fell in March before a strong but volatile recovery. In recent days, retail traders who discuss strategies on Reddit forums have fuelled sharp rallies in a clutch of unloved stocks in a show of their growing strength.

Hargreaves have added 84,000 users since the end of June, many of whom were young people seeking to gain a return on their money. That has taken its total of active clients close to 1.5m, as its average user age has dropped to 37, from 45 in 2012.

“As our client numbers continue to grow, we are finding that younger people are taking a greater interest in investing for the future, with the average age of clients continuing to fall,” said Chris Hill, chief executive of the group.