Worries are shrugged off at 'resilient' Lansdown

Britain's biggest independent financial adviser today brushed aside the effects of shaky financial markets, saying savvy UK investors are keeping their cash wrapped up in tax shelters.

Hargreaves Lansdown, which floated on the stock market last summer, today reported higher revenues, growing assets under management and soaring profits.

Recent weeks have seen a sharp sell-off in Hargreaves Lansdown stock - down 40% between November and January - on fears the company would be forced to issue a profit warning because of the volatility on world markets and the redemptions and withdrawals hitting fund managers.

"That has perhaps been our problem," said chief executive Peter Hargreaves today. "We are new to the stock market, and perhaps some of the analysts don't quite understand us yet.

"We have a resilient business model and much of the money being invested is invested in tax wraps. We are not hit by redemptions like fund managers are. If the client who has invested in a Sipp or Isa with us wants to take the money out of, say, an equity fund, that's fine but they leave it in as cash because in the case of a Sipp it's their pension and in the case of an Isa they would lose the tax-free benefits which they won't get back. Investors aren't daft."

Assets under management leapt 45% to £10.9 billion in the six months to the end of December. Revenues grew 33% and underlying operating profits were 58% higher at £27 million. The interim dividend is 3.065p.

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