UBS reiterates sell on Hargreaves Lansdown
Proposals from the government to shake-up the personal savings market are positive but the reaction triggered in shares of Hargreaves Lansdown (HL) seems overdone, UBS said in a research note e-mailed to clients.
Financial Services
13,969.36
17:09 25/04/24
FTSE 100
8,078.86
17:14 25/04/24
FTSE 350
4,434.34
17:09 25/04/24
FTSE All-Share
4,387.94
16:49 25/04/24
Hargreaves Lansdown
736.20p
16:40 25/04/24
Allowing retirees to sell their annuities for cash would be positive for UK exposed asset managers and asset gatherers the Swiss broker believes.
However, asset managers may be asked to provide financial advice, whereas Hargreaves Lansdown is a non-advised player.
As well, going on the basis of the government’s own estimates the Bristol-based firm only stands to gain approximately 5% in assets under administration. It now administers £49bn of assets with roughly 56% of those in funds.
The lack of a banking license also means that HL will not be interested in offering the mooted new Help-to-Buy ISAs, which may in fact compete with shares and ISAs for flows, particularly from younger savers.
The removal of the tax on cash savings could also lessen the appeal of financial investments, such as stocks or mutual funds, in favour of holding deposits.
For all of the above reasons, analysts Gregory Simpson and Arnaud Giblat reiterated their recommendation to ‘sell’ and 12-month price target of 830p.