Hargreaves profits hit by £3m FSCS levy

Hargreaves Lansdown posted a 40% jump in operating profit in the final six months of 2010, but says the figure would have been "significantly higher" but for a £3m FSCS bill to help compensate customers of failed investment businesses.

Chief executive Ian Gorham today said it was "disappointing" the company's shareholders would have to foot the bill for the "incompetence of others", and called for a review of the way the FSCS is funded.

Operating profit in the six months to 31 December 2010 rose 41% to £55.6m, compared with the same period in 2009.

Revenue jumped 30% from £74.6m to £97m while total assets under administration climbed 43% from £15.6bn to £22.3bn.

Meanwhile, net business inflows dipped 2% to £1.34bn.

Investment firms were last month billed for their share of a £326m interim levy from the FSCS.

Firms in the investment intermediation sub-class must contribute £93m of the total to cover compensation claims against failed firms, including Keydata.

Gorham said: "Profit would have been significantly higher had we not been billed for an additional £3m in the FSCS levy.

"Our view is that shareholders in reputable firms should not have to foot the bill for the incompetence of others and we believe that the way in which such a compensation scheme is funded and operates needs to be reviewed."