Hargreaves feels the ‘seismic’ effect of Mail float

The Bristol-based group thanked the flotation for a “seismic effect” on UK investment as it notched up 77,000 new clients in the six months to December 31 – more than the equivalent periods of the last three years combined.

It said around 27,000 of these clients used the broker to invest solely in Royal Mail shares when it floated last October.

Including existing clients, around 118,000 people – or 18.5 per cent of the UK public who invested in Royal Mail shares – did so through Hargreaves Lansdown.

Demand was so high that up to 60,000 people a day tried to call Hargreaves Lansdown in the run-up to the initial public offering, while its website received 3.5 million hits in two weeks alone.

The surge in client business, together with a rise in financial markets in the second half of 2013, helped funds under management leap 43 per cent higher to £43.4bn, while pre-tax profits rose 11 per cent to £104.1m.

But shares fell 6 per cent as its interim profits haul missed City expectations.

Hargreaves said lower interest rates on cash holdings caused profits growth to lag behind its “staggering” rise in funds under management.

The group also announced a U-turn on plans to increase charges for customers who hold investment trusts on its Vantage platform in a move that will benefit around 77,000 clients.

It angered investors last month when it said those with investment trusts would pay an additional charge of 0.45 per cent from March 1 as part of a wider shake-up of fees to meet new City rules.

But outcry over the move, which saw some clients claim their fees were being doubled, prompted Hargreaves to axe plans for the extra 0.45 per cent charge.

“We have listened to our clients – investment trust charges are not going ahead,” the group said.

The decision will now see investment trust clients pay slightly lower fees, it added.