Hargreaves defies the downturn

The company said revenues increased 15 per cent to £238.7m while pre-tax profits rose 21 per cent to a record £152.8m in the year to June 30.

The group’s growth came despite a seven per cent slide in the FTSE All Share index over the year.

The bumper results triggered a bigger than expected dividend payout and means founders Peter Hargreaves and Stephen Lansdown, who are still major shareholders, will receive £34.4m and £21.6m respectively. Mr Lansdown announced he will step down from the board.

The company’s Vantage platform, which allows investors to put their money into a range of products, attracted 45,000 new active clients, taking the total number to 425,000.

Assets under administration rose seven per cent to £26.3bn despite the stock market declines, as it attracted more customers.

The industry in which Hargreaves operates is to receive a major shake-up, known as the Retail Distribution Review, which will come in two phases.

The first phase due at the end of 2012 will see financial advisers forced to charge for advice but will not impact Hargreaves as it already charges. It said the change could help attract new customers.

But the second phase is likely to see fund management platforms banned from receiving commission from fund managers for listing their products.