Hargreaves Lansdown has expressed its frustrations at the significant jump in its expected FSCS Financial Services Compensation Scheme levy contribution.

UK-based wealth manager Hargreaves Lansdown has slammed the Financial Services Compensation Scheme for placing an “unfair burden on reputable and blameless firms” after revealing it expects to contribute a £4.6 million ($7.1 million) FSCS levy.

The scheme, which is funded by a levy on authorised financial services firms, carried out a recent upward revision to the amounts being raised. Hargreaves Lansdown's estimated FSCS levy is more than double the £2.1 million it paid last year, the firm revealed in a trading update.

“It is extremely frustrating that shareholders must bear such costs with the current FSCS system,” said the firm's chief executive, Ian Gorham.

“The FSCS levy is calculated and applied to companies on a formulaic basis to cover the costs of other defaulting regulated firms in the market and does not reflect any wrongdoing on Hargreaves Lansdown's part.” 

Elsewhere in the update, the firm posted net inflows of £2.75 billion over the four months to 30 April, 8 per cent up from the same period last year. It also boosted its assets under administration by 22 per cent year-on-year to a record £55.3 billion.

Total net revenue reached £241 million, up marginally from £239.3 million at the end of April 2014. Meanwhile, client and asset retention rates were healthy at 93.4 per cent and 92.7 per cent respectively.

The firm's direct‐to‐private investor platform, Vantage, added 40,000 new clients over the four-month period.

Hargreaves Lansdown said its efforts to become fully pension reform-ready had paid off. The British pension freedoms, which came into force on 6 April, helped drive the firm's cumulative net asset inflows for the year-to-date to £5 billion.

“These preparations have paid off as the group has benefited from both extensive new business and consolidation through inward transfers,” said Gorham.

“We have also experienced lower than expected withdrawals from pensions as clients appear to be using the freedoms extremely sensibly, further evidence of the wisdom of trusting the British public with their own money.”