Hargreaves Lansdown to float - 600m price tag

EdInvestor

Times

ONE of Britain’s largest sellers of investment products is preparing to float on the stock market in a move that could net each of its two founders a £240m fortune.Hargreaves Lansdown, set up by chief executive Peter Hargreaves and chairman Stephen Lansdown in 1981, could be valued at about £600m when it lists on the stock market.

Hargreaves Lansdown has grown rapidly since it was set up in a bedroom. It has more than 600 staff and 350,000 active customers.In 19 of the past 20 years the company has reported revenue growth, while profits are understood to have increased by an annual average of 30% in the past decade.

It also handles about £6 billion in assets for customers using its Vantage account, a wrapper that allows investors to hold a range of investments including self-invested personal pensions, unit trusts and Isas. A further £850m is held in investment funds managed by the company.Hargreaves Lansdown is the largest broker of unit trusts and Isas in Britain and also owns the eighth largest execution-only retail stockbroker.

Good luck to the two of them

If only more people in financial services would realise that you can make more money by offering investors value, than you can by ripping them off.

freebird65

I use them and have never looked elsewhere - value for money and their service is top class!

I'm just a bit worried whether that all changes when they float and become answerable to their shareholders......hopefully an unfounded fear.

EdInvestor

I'm just a bit worried whether that all changes when they float and become answerable to their shareholders......

I wonder if they will give a special deal on buying their shares to their loyal customers?

RayWolfe

A bit worrying! Does anyone know if any other IFA is a public company?
I think their clients ought to get a free slice of the action.
Yep. That sounds like one of my better ideas ... ;-)

freebird65

I'm loving the free shares idea.....but somehow I doubt it. Will take more notice of their emails from now on!

Maybe there'll be a "get in early and get them cheap" offer. They've done that before and I've done very well out of it.....ooohhhh....how exciting!

RayWolfe

EdInvestor wrote:

I wonder if they will give a special deal on buying their shares to their loyal customers?

So, let me be the first to show loyalty:

HL are the best Independent Financial Advisors in the whole history of mankind. And sometimes they even beat that record! I would even use them if their service were terrible. Have you also noticed how handsome Mr H & Mr L are?

Do think that might do it? ;-)

EdInvestor

HL don't miss too many tricks, and they made a dreadful fuss over the QinetiQ IPO - first privatisation with no Sid shares,what a disgrace etc, so the Govt was forced to respond.

I reckon it's a dead cert they'll have a discount share tranche for customers - they'd be criticised as hypocritical if they didn't.

Besides, its a fairly normal procedure for financial companies going public these days, not least because you get loads of free publicity. :rolleyes:

dunstonh

HL are the best Independent Financial Advisors in the whole history of mankind. And sometimes they even beat that record! I would even use them if their service were terrible. Have you also noticed how handsome Mr H & Mr L are?

30,000 or so IFAs out there. Many would claim to be just as good or even better.

Maybe the float will help pay for the extra regulatory requirements that they will have to meet from April. A number of SIPP providers are struggling at this point. I dont expect them to have a problem but that could impact on future pricing. Plus shareholders will certainly excert some pressure on them to increase charges. It depends on whether they can show that having many paying a little is better than having a few paying a lot (or somewhere in between). Plcs often favour the fewer paying more as it costs less and plcs often have pressure on reducing costs.

I think it's a good move and good luck to them.

RayWolfe

dunstonh wrote:

Plus shareholders will certainly excert some pressure on them to increase charges.

Being serious for a second, it's that, that bothers me. It's almost bound to happen. Are there other IFA PLCs?
Rest assured dunstonh, that when I die I will tell my wife (from my grave) to contact you ... or EdInvestor ... ;-)

EdInvestor

I'd have thought most of the business is on the discount broking rather than on the advice side. Unlikely that shareholders would want them to change a successful business model with 30% annual profit growth as the norm.:eek:

dunstonh

EdInvestor wrote:

I'd have thought most of the business is on the discount broking rather than on the advice side. Unlikely that shareholders would want them to change a successful business model with 30% annual profit growth as the norm.:eek:

The profit could be greater by increasing charges by 30%. If they lose only 5% the business in doing so, then they have increased that profit by 25%. This is the sort of pressure they will be under.

Its finding the point where you lose more than you gain. That is the key.