Lloyds Banking Group and Schroders have joined forced to create a new wealth management group.
This joint venture allows Lloyds to access Schroders investment management expertise, while giving the fund manager access to Lloyds significant client base and multi-channel distribution.
As part of the deal Schroders has been given the mandate to run £80bn of assets for Scottish Widows, part of the Lloyds Banking Group.
Schroders co-head of UK intermediary James Rainbow will be chief executive of the new joint venture, while Lloyds’ Antonio Lorenzo will be its chair. Lorenzo is currently chief executive of Scottish Widows and group director of insurance & wealth.
This new joint venture aims to start trading in the first half of 2019, subject to regulatory approval.
Lloyds will own a 50.1 per cent stake of this new joint venture, with Schroders owning the remaining 49.9 per cent. Lloyds will also receive a 19.9 per cent financial investment in the holding of Schroders’ UK wealth management business.
Lloyds will transfer around £13bn of assets and associated advisers from it existing wealth management business into the joint venture. There will also be a referral agreement in place to enable Lloyds’ customers to benefit from this proposition.
In a joint statement to the stock exchange Lloyds and Schroders said they saw “significant growth opportunities in the financial planning and retirement market”. The aim is for this new venture to be one of the top three financial planning business in the UK within five years.
Lloyds group chief executive António Horta-Osório says: “I am delighted to be announcing this exciting partnership with Schroders and the creation of a new market leading wealth management proposition. This provides a strong platform for growth and is a further step in the delivery of our strategic objectives.”
Schroders group chief executive Peter Harrison adds:“Wealth management is a strategic priority for Schroders. In combining our award-winning technology and world-class investment expertise with Lloyds’ client base and digital capabilities, we are creating a strategic partnership which is exclusively focused on the evolving needs of UK savers and investors.
“I am also delighted that we have been entrusted to manage £80 billion of assets for Lloyds’ and Scottish Widows’ clients.”
Schroders was confirmed to be the front runner to run the £109bn Scottish Widows mandate earlier this month. Lloyds, which now owns Scottish Widows withdrew this mandate from Standard Life Aberdeen. earlier this year.