New business was £1.11bn ($1.4bn, €1.2bn) for the quarter, down from the £1.43bn registered in the first three months of the year.
Despite the higher stock market levels, the discount broker said investor confidence has fallen with much uncertainty about the future economic environment weighing on investors’ minds.
“Such concerns have impacted net new business flows which were down 22%, albeit against a record first quarter performance last year, which was boosted by the new pension freedoms and transfers of Child Trust Funds into Junior Isas,” read a stockmarket announcement.
“New money and transfers in have been comparable to last year but we experienced higher levels of cash withdrawals in the early part of the quarter following the EU referendum, particularly from the Fund and Share account where investments tend to be less sticky and trading profits can be more easily withdrawn.”
Revenue growth was driven by higher asset values, alongside strong share dealing volumes – up 49% to over one million in the quarter following the EU referendum.
Assets under administration increased by £5.9bn compared to June, to a record £67.6bn, while total client numbers now total 856,000.
“As ever, future stock market levels and investor confidence will have a significant part to play during the remainder of our financial year,” the firm said.
“However, we remain confident in the execution of our strategy to take advantage of the structural growth opportunity in the UK savings and investments market to the benefit of our clients and shareholders.”
In May, Hargreaves reported a sustained a drop in net inflows in the first four months of the year, despite seeing a 3% increase in the value of assets held by its Vantage service and an expanding client base.