Consumer Duty risks drive Hargreaves Lansdown and AJ Bell 'Sell' rating from UBS

Cyclical challenges to net new business

Valeria Martinez
clock • 2 min read

UBS has launched its research coverage of platform providers AJ Bell and Hargreaves Lansdown with a ‘Sell’ rating, due to perceived Consumer Duty risks.

In a research note published on Wednesday (7 November), the Swiss bank's equity research division said both firms are set to face revenue growth headwinds from cyclical challenges to net new business and market returns.  However, analysts argued that the biggest risk is to interest earned on client cash. UBS has estimated that interest earned on client cash makes up more than 80% of AJ Bell's pre-tax profit for this year, and 55% for Hargreaves Lansdown. The firm said that regulatory risk to revenue was high for both providers in light of the Financial Conduct Authority's Consumer Dut...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Companies