Strategic report Governance Financial statements Other information CHIEF EXECUTIVE OFFICER’S REVIEW EXCEPTIONAL GROWTHIN UNIQUE MARKET CONDITIONS 2021 has been a year of exceptional growth despite the unique external conditions. Any one of us who looks back on the challenges the website, or by phone. Our focus on service Our strategy is focused on of the last year – from both a business and a has meant we have seen £8.7 billion of net new building and developing lifelong personal perspective – would appreciate that it business flows, the first time we have ever might count as a success to simply have ended generated over £8 billion in a single financial year.relationships with our clients. the year with our own health, the health of our Confidence in both the quality of our service and employees, the health of our clients and the our offering has driven these flows and, health of our business intact. For a business like when combined with market growth, has also ours, alongside the impact of COVID-19, we have led us to reach new AUA highs of £135.5 billion, also faced further volatility from political a 30% increase on the prior year. uncertainty – from Brexit to the US elections. If the biggest trend has been the change in But while it has been a challenging year on so demand for online service, the second biggest many fronts, these pressures have also caused trend has been in the demographic mix. This record of supporting clients through their up 8% to £366.0 million. To put those profits enormous change. Demand for online services of demographic change has been underway for financial lives. As we work with these new clients in context, they are now bigger than our net all kinds has soared. There has been a permanent some time across the industry but has become on similar paths, the lifetime value of our overall revenues were five years ago. shift in consumer behaviour in areas from more noticeable through the pandemic. In FY21, client base will increase. groceries to health services, from online 83% of our new clients were under 55. We are Whilst some of this volume of trading has clearly investing to wealth management. We have also seeing younger clients show an interest in – and Thirdly, we benefited from the market volatility been exceptional – and we do not expect it to seen a rapid acceleration in the importance of willingness to learn about – investing, prioritisingthat has been the inevitable outcome of the remain at such high levels – there are two key ESG for consumers, investors and policy makers. financial resilience and saving. They are starting challenging year. Investor confidence started lessons for us from the year. First, we believe It has not been a year when you could stand still. to benefit from thetransition of wealth from the year at a low but swung dramatically on the there has been a permanent shift in behaviour, And at HL we haven’t. older generations. The fact that we have positive news of COVID-19 vaccines and the and the key structural drivers for the wealth Instead, 2021 has been a year of exceptional attracted so much of this generation to our political certainty provided by the US election management industry will continue to underpin growth. We have continued to deliver our client- service gives me confidence that our investment and Brexit. The subsequent upwards trend in our long-term growth. Second, we have been focused growth strategy – welcoming a record in our proposition and user experience is paying confidence, alongside a greater interest in able to capitalise on this extraordinary year – and 233,000 net new clients in the year. We have off. This younger mix of clients underpins our markets and trading during lockdown, led to enlarge our client base substantially – due to our achieved this by ensuring we can provide our future growth because their investment record equity trading volumes – up 54% on the previous investment decisions and confidence in service to clients through any channel: via mobile, behaviours mirror the trends of previous cohorts: previous year. This was one of the drivers of the opportunity ahead. we know what they need from our 40-year track strong underlying profit before tax growth, 13 Hargreaves Lansdown Report and Financial Statements 2021