Hargreaves Lansdown intends to use the digital advice capabilities it has to help the firm understand which products will best suit each client, rather than to replace the human element of the advice process, according to the platform’s chief executive Dan Olley.
Speaking on a media call after the publication of the company’s latest results Olley reiterated there would always be a human element to advice.
The companies half-year results, published this morning (February 22), showed a £14.4mn write-down related to two software purchases for which the company no longer “has an intended future use.”
This included £7.2mn in relation to software that was developed to support a client financial health check tool and £7.2mn on development of a tool to improve efficiency for financial advisers.
Responding to a question from FT Adviser, Olley was reluctant to describe the previous spending as a push into robo-advice, and said it was more akin to a “augmented” approach to advice.
In addition to the £14.4mn writedown on the purchase of software capability, there were also costs associated with the exit of people within the “executive and digital leadership teams".
Olley said: “When we were looking at this, we wanted to go back to what customers need. We want to give people choices, it doesn’t ever need to be a completely digital experience.
"We have people who just want to do it online, then we have people who phone up and ask how to do something on the website themselves, and that contours all the way through to advice.”
Olley became chief executive of Hargreaves Lansdown six months ago, but said at his previous employer, Relx, he worked with machine learning and artificial intelligence strategies.
He feels that the role those technologies can play within the Hargreaves Lansdown business is to analyse client data to point to where on the journey between execution only with no human engagement to full face-to-face advice a client is at.
This would allow the company to map where the next stage of the clients journey may be.
Olley’s comments came in light of the company receiving net inflows of £1bn during the period, down from £1.6bn the prior year.
Olley said most of the outflows were from clients with smaller pots of assets, and those clients were selling their investments to raise cash to pay down debt or mortgages, rather than moving to another provider.
He said the average age of new clients coming on board has dipped below 30 for the first time, while the average age of a client is 45.
Profits were £222mn for the six months to the end of December 2023.
Of that profit number, £132mn was generated from the gain Hargreaves Lansdown made from the interest generated on client cash. Hargreaves splits the revenue generate on this with the client.
david.thorpe@ft.com
