Analysts at JP Morgan reiterated their underweight stance on Hargreaves Lansdown due to the combination of their forecasts for a drop in UK gross domestic product in 2023, alongside “elevated” inflation and the rise in overall living costs, amongst other factors.
Driving the latter, they pointed to the large increase in mortgage costs on the back of interest rates increases.
That led them to analyse how that combination might impact flows to wealth managers and platforms.
“Overall, we see greater risks for the UK and Nordics (vs. Italy) names, as well as D2C platforms (vs. financial advisors), due to a combination of unfavorable economic conditions, mortgage market structure and client demographics,” they said.
Against that backdrop, their “key” underweights were Hargreaves Lansdown (Target price: 770p) and Swiss outfit Avanza (Target price: SEK140).