Citi puts AJ Bell and Hargreaves Lansdown on 'negative catalyst watch'

"The growth-oriented diversified financials sector has faced a challenging couple of years, as financial investors have favoured banks and insurance. Yet expectations for falling interest rates during 2024 should be supportive for the sector as a whole, and in particular for the alternative asset managers, which is our preferred subsector," the bank said in a research note.

Citi said it is overweight the exchanges and underweight the investment platforms and Swiss private banks.

"Our most-preferred stocks are Allfunds, Intermediate Capital Group and London Stock Exchange Group. Our least-preferred stocks are EQT, Hargreaves Lansdown and Vontobel. We open new negative catalyst watches on AJ Bell and Hargreaves Lansdown."

AJ Bell shares were down 0.9% at 294.4p by 0909 GMT, while Hargreaves Lansdown fell 0.8% to 721p.