By Sinchita Mitra
(Reuters) -Hargreaves Lansdown said on Monday its Chief Executive Officer Chris Hill would step down after more than five years in the role.
The British investment platform and digital wealth manager also issued a trading update two days ahead of schedule and reported assets under administration of 122.7 billion pounds ($138.41 billion) as at Sept. 30, down from 123.8 billion pounds at the end of June.
Hargreaves and other wealth managers saw their assets under management rise after the COVID-19 pandemic took hold as lockdown savings and low interest rates drove up inflows, but are now witnessing a drop in assets on growth concerns due to the conflict between Russia and Ukraine.
Hill, 51, would be available until his successor was appointed and to allow time for a handover up to November 2023, Hargreaves said in a statement.
“The departure of the CEO will raise questions on whether a new CEO might decide to lower Hargreaves Lansdown fees, which would make it regain competitiveness, but with short-term substantial headwinds to revenues,” said analysts at JP Morgan.
Shares in the company, which have lost more than 54% since Hill took the helm, were down 4.2% by 0839 GMT.
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Hargreaves has also been hit this week by a multi-million pound lawsuit as 3,200 investors filed claims against the London blue-chip company over the failure of veteran investor Neil Woodford’s flagship fund, which was available on the Hargreaves platform.
The company on Monday reported a slowdown in its net new clients number and net new business for its first trading quarter. New business dropped to 700 million pounds versus 1.3 billion pounds a year ago.
But total revenue rose 15% in the period thanks to higher interest rates.
Hargreaves also raised its full-year revenue margin outlook to 49-52 basis points from 44-47 bps.
“Although flows into risk-based investments remain subdued, both client and asset retention rates remain strong and in line with last year,” Hill said in a statement.
(Reporting by Sinchita Mitra in Bengaluru; Editing by Dhanya Ann Thoppil, Carolyn Cohn and Alex Richardson)
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