Hargreaves Landsown has revealed it is being stung by a 450% rise in its bill to help pay for the FSCS, as it announced a 5% drop in profits.
The Bristol-based company announced that it must cough up £4.4m, a rise from £0.8m in 2014.

The figures were announced this morning in the firm’s unaudited preliminary results for the year ended 30 June 2015. It showed profit before tax of £199m, compared to £209.8m a year ago.

This came despite an increase of 84,000 active clients in the year to 736,000, representing a rise of 13%. The company said it had been hit with “an unforeseen significant FSCS levy”. A number of advice firms have recently complained about similarly high rises, with a petition set up calling for a review of the fees.

Michael Evans, the chairman, said: “We have delivered strong underlying performance across our business, but in the face of known headwinds, we report a reduction in profits. “These headwinds include this year being the first full year following the introduction of the Retail Distribution Review, the changes in the regulations concerning client money, precluding the use of term deposits over 30 days, to the detriment of both our clients and our shareholders, and an unexpected increase in our FSCS levy, which we continue to see as nothing more than a tax on well run businesses.”

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Net new business inflows dropped 5% also, to £6.1bn, while net operating profit margin on net revenue went down from 71.3% to 67.3%.

Mr Evans said: “The coming year will be a challenging one but we believe we are well set to return the group to its growth trajectory, building on the new services and features delivered in 2015 to allow us to continue to thrive in our chosen markets.”

Despite the drop in profits, the company reported a 1% rise in net revenues to £294.2m.

Total assets under administration jumped to £55.2bn, up from £46.9bn, representing a rise of 18% and this was a new record high, the firm said.

Ian Gorham, chief executive, said: "We are delighted with another year of great growth for Hargreaves Lansdown, against a backdrop of stock market angst and low investor confidence. The new freedoms have put pensions back on the public's radar and helped us to a further 13% growth in clients and 18% in assets during the year; assets have now passed £55 billion and client numbers are now approaching 750,000.

“It is remarkable to note that in just 2 years client assets have grown by over 51%, from £36.4 billion in June 2013 to £55.2 billion at 30 June 2015. As many clients have more than one account, the total number of accounts held with Hargreaves Lansdown surpassed 1 million during the year.”