Hargreaves feasts on 'lack of trust' in banks

Peter Hargreaves, founder of Hargreaves Lansdown — which he describes as the “largest investment supermarket” in the country — today said his firm was seeing record numbers of new clients partly because people no longer trust banks.

“Customers are opening new accounts at a greater rate than ever in our history,” said Hargreaves. “Our clients don’t trust banks any more. But with us they see a FTSE 100 company with more  than £100 million in the bank  and a history of 30 years of unbroken profits.”

Hargreaves Lansdown’s pre-tax profits jumped 30% to £93.7 million in the six months to December. The value of assets which it manages also rose by 30% to top £30 billion for the first time at £30.4 billion. The shares led the FTSE 100 risers gaining 7%, or 50p, to 784.5p.

The firm added 21,000 new clients since June last year taking the total to 446,000 with the inflow of new cash up by 42% at £1.65 billion.

Hargreaves is highly critical of the Government’s Funding for Lending scheme, which he sees as having been hugely disadvantageous to savers while doing little for the small-business sector it is meant to help.

He said: “Basically, it is giving cheap money to banks in the hope they will lend to companies which they would not want to lend to on risk grounds in the first place. The good companies out there don’t need or want to borrow money. It is just another example of why governments should not try to interfere in economics.”

Hargreaves added: “I used to think most politicians were useless but recently I’ve changed my mind. All politicians are useless.”

Low savings rates are driving more and more private investors into equities, he said.

Hargreaves Lansdown raised its interim dividend by 24% to 6.3p, which means Hargreaves will collect a cheque for £9.64 million.