HL reports strong year but CEO and CFO waive bonuses after Woodford scandal

Revenues rose to £480.5m from £447.5m for the previous year, while profit before tax was £305.8m, an increase from £292.4m. Diluted earnings per share also rose to 52p from 49.6p.

Net new business over the year was strong £7.3bn, but came in 4% lower than last year's £7.6bn. The firm now has a record number of clients at 1,224,000 and assets under administration have hit the £100bn mark.

CEO Chris Hill said: "The second half of the financial year was particularly strong, supported by our best ever tax year end with clients continuing to use their ISA and SIPP allowances. 

"Our Active Savings launched with a full tranche of term deposits and through considerable momentum, now has over £1bn AUA. Our HL Select Global Growth Shares fund now has over £350m assets under management and is our most successful Select fund launch to date."

Woodford scandal

However, despite the strong results, Hill and CFO Philip Johnson decided to waive their bonuses for the 2019 financial year, "together with the unanimous support of the board", to mitigate the impact the gating of the Woodford Equity Income fund has had on their clients.

"I am determined that we learn from events such as these. I have apologised to all clients who have been impacted by the recent problems because we all share their disappointment and frustration," Hill said.

"In these difficult times we recognise the financial and personal impact the gating of the fund has had on them. Our aim remains to provide the best possible service and choices to allow people to manage their investments simply and effectively."

Despite the scandal overshadowing other news for many weeks, Hill said HL's own business flows and service levels have "held up well" since the events, adding that the group is "actively engaged" on the matter with Link, Woodford IM and the regulator, as well as the financial press.

"Our priority remains to support our clients and pressing for the Woodford Equity Income Fund to reopen as soon as is practicable, whilst protecting the interests of all investors," he added.

He also reiterated H's commitment to the Wealth 50 list of favourite funds, saying "the shortcomings of one fund should not detract from the benefits of [the list]". 

He said: "We are confident in the robustness of how we analyse, research and compile our favourite fund list with a focus on ensuring best value for clients. Nonetheless, we recognise that there will be learnings and improvements we can make from reviewing this event and we will ensure we apply these to benefit our clients in the future."

Hill highlighted the list's benefits, saying the research has resulted in the selection of funds which have outperformed their relevant benchmark index and their sector average after charges, by 5.8% and 11.8% respectively over the period they have been on list.

Hill also added on the fees HL receives: "It is important to note that Hargreaves Lansdown is paid directly by our clients, not by fund managers. Our fee income is calculated as a percentage of the clients' assets held on our platform, and we earn the same fee regardless of the funds our clients hold."

Transfers

Meanwhile, the CEO said the group has been working on improving areas that cause clients inconvenience, one of these being the issue of transfers, working on facilitating higher numbers of online transfers and a reduction in the overall completion times.

"We have improved our helpdesk service by responding to high volume call drivers, providing new training to managers and through deployment of technology tools. We have also maintained our marketing efforts through quieter periods of client activity," he said.

Commenting on the FCA's Investment Platforms Market Study report that was published in March 2019, he said the group anticipated the study's focus on switching "will enable a faster and more straightforward process".

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• Neil Woodford