How Hargreaves Lansdown’s Accelerated Digital Strategy Shapes Its Profit Outlook Heading Into 2026

Hargreaves Lansdown (HL) is the UK’s largest direct-to-consumer (D2C) savings and investment platform, serving over 2.0 million clients and administering a massive amount of client assets. The firm’s core purpose is to help people achieve financial freedom by providing a single home for their savings and investing needs.

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The year 2025 marked a period of significant transition for HL, highlighted by its acquisition and subsequent delisting by a private equity consortium. Despite the disruption, the business remained focused on executing its growth strategy, translating into strong increases in client metrics and revenue.

Moving forward, the new private ownership structure is expected to bring additional focus and expertise to refine and accelerate HL’s digital transformation at pace. This next chapter will center on leveraging technology, data, and AI to deliver a world-class, personalized client experience and secure long-term, scalable growth.

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Financial Story

HL has delivered solid financial performance in the previous quarter, reporting revenue of £860.6m, up 13% year on year. This growth was driven by a larger average Assets Under Administration (AUA) across all asset classes, benefiting from positive market movements and a significant improvement in net new business (NNB) flows.

Underlying Profit Before Tax (PBT) increased by 19% to £544.3m, a testament to management’s focus on cost control. However, statutory PBT was limited to £405.1m (up 2%), mainly due to £139.2m in strategic investment and exceptional one-off costs relating to the takeover and delisting.

The key growth metrics reinforce HL’s market dominance: NNB rose sharply by 43% to £6.0bn, helping push total AUA to a record £172.7bn. These results demonstrate the company’s powerful operating model, where 76% of revenue streams are ongoing, ensuring a high degree of profit resilience.

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Broader Market Context

The UK wealth market is characterized by a large, continually expanding addressable market, currently estimated at £4.0 trillion and projected to grow to £4.8 trillion by 2030. This growth is fundamentally driven by the structural shift of retirement responsibility from the state and employers directly to individuals.

This environment creates fierce competition in the D2C platform space, yet the opportunity remains strong for a trusted platform that offers the breadth of products clients need across their lifetimes.

Crucially, the regulatory landscape, particularly the Consumer Duty rules implemented in 2023, reinforces HL’s core principles of delivering good client outcomes, positioning the company well against both new and existing competitors.

1. Accelerating Digital and AI Transformation

The core of HL’s strategy is turning technology into a competitive advantage. The firm is accelerating its journey toward becoming a scalable, efficient, and secure platform by progressing the migration of its data centers to the cloud. This transformation is essential to providing clients with the desired personalized and proactive experience.

This technological foundation leverages data and AI to modernize client communications and enhance call quality assurance, driving efficiency. Investing in these capabilities is key to improving the digital client experience, which ultimately fuels the business’s growth and client retention flywheel.

2. Doubling Down on Strategic Product Growth

HL successfully leveraged strategic product offerings to drive NNB growth by 43% year over year. The launch of the Cash ISA within the Active Savings platform was a major catalyst, helping grow that product’s AUA to £14.7bn. This success proves the value of offering clients a single home for both cash and investment needs.

The firm also delivered the strongest tax year-end performance in HL history in both net new business and client service metrics. HL is broadening its range of investment opportunities, including offering the digital Venture Capital Trust (VCT) service and launching a new Global Equity fund.

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3. Securing Value through Cost and Service Discipline

The business model is fundamentally designed to decouple growth from cost to serve. The 19% jump in underlying PBT was supported by a renewed focus on efficiency, delivering £18m in savings through initiatives like renegotiating broker and SaaS contracts.

This cost discipline is crucial as the company funds its multi-year strategic transformation. By maintaining a fitter, leaner operating model and holding significant capital and liquidity surpluses, HL ensures it has the resilience to withstand market shocks and continue investing in a superior client value proposition for the long term.

The TIKR Takeaway

HL’s chart reflects a year of market volatility and transition, with the stock posting a flat 0.8% price return over the last 11 months. However, the TIKR Valuation Model offers a clear roadmap of growth potential based on successful execution. Using mid-case assumptions, the model projects a potential total return of 24.9% over the next 3.6 years (5.3%).

This model also highlights that while Revenue Growth (CAGR) is expected to remain stable at 2.1%, the real boost comes from projected EPS Growth (CAGR) of 2.6% and a powerful Net Income Margin that holds strong at 45.2% in the forecast.

For an investor, TIKR illustrates that management’s focus on NNB growth and cost control is the primary lever for value creation, promising a significant annualized return if the transformation is successfully delivered.

Should You Buy, Sell, or Hold Hargreaves Lansdown’s Stock in 2025?

Hargreaves Lansdown heads into its private ownership chapter with strong momentum in client acquisition and core business performance. The focus on accelerated digital transformation and relentless cost discipline provides a clear path to margin expansion and sustainable growth.

Given the current stock price of £11.09, the valuation model suggests significant upside if the company achieves its mid-case forecasts. Investors who believe the management team and new ownership can successfully navigate the tech modernization phase and leverage the growing UK wealth market may see this as a compelling opportunity. However, those hesitant about the execution risks inherent in a multi-year transformation may prefer to wait and see for more validation.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!