Hargreaves Lansdown Plc, the U.K.’s largest retail broker, reported record net inflows of 1.8 billion pounds ($2.8 billion,) in the third quarter, as yield-hungry investors poured cash into equity funds.
Assets under administration jumped 35 percent to 35.1 billion pounds by March 31 from a year earlier, the Bristol, England-based company said in its statement published today. Revenue jumped 23 percent to 76.3 million pounds.
“Interest rates remain depressed across the savings and investment industry,” Chief Executive Officer Ian Gorham said in the statement. “This aids our company by encouraging equity investment, as retail investors face persistently poor returns on cash.”
The shares closed at 949 pence in London, up 5.4 percent on the day. They’ve increased 40 percent this year, giving the company a market value of 4.5 billion pounds.
Retail investors are increasingly looking to equities and other higher-yielding investments due to the poor returns offered by bank accounts and fixed-income instruments in a low interest rate environment. While driving customer numbers, that development could weigh on income next year, the company said.
“As our fixed term deposits mature, the lower interest rates have a negative effect on our interest income,” Gorham said. “Whilst strong asset and associated revenue growth continues, 2014 revenue growth will also be subject to some drag from reduced interest income if low interest rates persist.”