Hargreaves Lansdown (HL) has reported a net client growth of 8,000 in the second quarter of the latest financial year, following on from 17,000 in Q1 2023.

Client retention dropped by 0.5% in the latest quarter, reaching 91.7%, with asset retention reaching 89%, down from 90.4% in Q1.

HL has said that this reflects a “muted macroeconomic backdrop” and the need for various cohorts of clients to make cash withdrawals.

The group also posted a decline in net new business, falling from £700m in Q1 to £600m in the latest quarter, stating that this reflected moderated flows being seen across the market.

In a statement, HL said that active savings continue to perform well and have been the key driver of net flows, as clients favour cash savings over risk-based investments.

HL saw share dealings average 634,000 per month in the last quarter, reflecting wider market changes after a decline from 700,000 in Q1.

However, the money services firm reported that revenue increased by 13% in the last three months to £183.8m, after reporting £162.9m in the first quarter of the financial year.

Chief executive officer at HL, Dan Olley, said: "We continue to see net client growth and positive net new business despite the macroeconomic backdrop and its on-going impact on investor confidence and client behaviour.

"Clients are looking to invest more in cash than risk-based investments, from our active savings offer, giving easy access to a range of banking partners, to money market funds and short-dated bonds. Combining this with informative and relevant content provides our clients with a wide range of solutions to meet their saving and investment needs."

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