Hargreaves Lansdown, the wealth management firm, has criticised the UK's Financial Services Compensation Scheme for placing an "unfair burden on reputable and blameless firms" after revealing that 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, began raising larger amounts recently. 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.

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

“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, eight per cent up from the same period last year. It also boosted its assets under administration by 22% 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% and 92.7% respectively.

Vantage, the firm's direct‐to‐private investor platform, 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 upwards for the year to date to £5 billion.

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