Hargreaves, who founded the fund supermarket in 1981 with Stephen Lansdown, will continue to work for the company, the firm said, although it gave no further details.
Shares in the company fell after the news and by 1238 GMT were trading down 4.1 percent at 1,186 pence a share, the biggest faller on the FTSE 100 <.FTSE> and in the heaviest relative volume, at 86 percent of its three-month average.
"The Group continues to perform strongly and I have every confidence in the strong management team and the well diversified Board to look after my interests in the Group," Hargeaves said in a statement.
"I will continue to work in the business, but will spend more time with my family and pursuing outside interests. I will, of course, remain in close touch as a major shareholder."
Hargreaves is the firm's largest individual shareholder with a stake of just over 32 percent, Thomson Reuters data showed. Lansdown holds just under 16 percent.
"He is a remarkable individual, and while I don't think his leaving will impact the running of the company and the company's profit outlook, the share reaction is a little mark of respect for the legacy he has created," said Canaccord Genuity analyst Robin Savage.
(Reporting by Simon Jessop, editing by Sinead Cruise)
By Simon Jessop
