Punters back Hargreaves Lansdown

Punters estimate that Hargreaves Lansdown's fortunes will improve

Punters wading back into the stock market since March have set up investment manager Hargreaves Lansdown for better than expected profits, the firm said.

The firm enjoyed a bumper fourth quarter on the back of higher dealing volumes and the positive impact of the market, with the FTSE 100 Index 23% above its lows nearly four months ago.

Bristol-based Lansdown's shares rose 5% after it primed investors for profits just above the £69.1 million top end of market expectations in the year to June 30.

Assets held in Hargreaves' Vanguard 'fund supermarket' platform for investors increased by 15% to £10.6 billion during April and May, the firm said.

The group's overall revenues for the 11 months to May 31 were also around 10% ahead of the previous year.

Last week the Financial Services Authority regulator published a consultation on new rules on financial advisers, although Hargreaves believes it will be largely unaffected by the rules.

This is because the vast bulk of its Vanguard business is 'execution-only' - carrying out the instructions of clients without offering advice.

"We can see nothing in the draft rules that will be overtly damaging to our business model," chief executive Peter Hargreaves said.

Numis Securities analyst James Hamilton said: "We expect continued strong organic growth to drive yet another year of record profitability...

"(The firm) has the highest margin and the strongest growth profile of the wealth managers we cover. With the clients investing their own money Hargreaves Lansdown does not suffer from performance risk."