* Net new business inflows 1.1 bln stg, down 22 pct
* Markets gains boost total assets to record high
* Shares fall more than 3 pct, lag weaker FTSE 100
(Recasts, adds detail from statement, analyst comment, shares)
By Simon Jessop
LONDON, Oct 13 British investment company
Hargreaves Lansdown said new business growth slowed in
the three months to end-September, taking the shine off a record
quarter for assets and profits.
The group, which focuses mainly on UK retail investors, was
also cautious on its outlook, which contributed to a fall in its
shares of more than three percent.
"Despite the higher stock market levels, investor confidence
has fallen and there remains much uncertainty about the future
economic environment weighing on investors' minds," it said in a
"Future stock market levels and investor confidence will
have a significant part to play during the remainder of our
The FTSE All Share index was up 6.8 percent over the
September quarter, Reuters data showed, partly helped by a boost
in profits for companies with overseas earnings as a result of a
slide in the value of sterling following Britain's vote to leave
the European Union.
Net new business inflows in the September quarter were 1.1
billion pounds, Hargreaves said, down 22 percent from the 1.4
billion recorded in the first quarter of 2016.
Total active client numbers rose by 20,000, meanwhile, down
17 percent from 24,000 in the first quarter of 2016.
But the company's total assets under administration rose 9.5
percent in the three months to end-September to a record 67.6
billion pounds, buoyed by the stock market gains.
At the same time, strong demand from clients to trade shares
in the wake of the June Brexit vote helped the company to
produce record net quarterly revenues, up 15 percent to 90.6
In response, Hargreaves Lansdown's shares were down 2.8
percent by 0738 GMT. They are down around 20 percent since the
start of the year.
Analysts at KBW, who have a "Market Perform" rating on the
stock, said the strong rise in assets would likely see consensus
expectations for the full-year raised, although the slow-down in
new business was less positive.
"We wonder how long Hargreaves can maintain its breakneck
growth," they said in a note to clients, adding that while
client retention was strong, the new business slowdown could be
a sign that demand was waning.
"Whilst Hargreaves' back book looks secure, its future
growth profile is questionable," they wrote.
($1 = 0.8042 pounds)
(Reporting by Simon Jessop; Editing by Rachel Armstrong and