Schroders and Lloyds team up for advice partnership

By Daniela Esnerova

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Oct 31, 2018

Schroders and Lloyds Banking Group have joined forces for a financial planning and wealth management proposition for wealthy clients.

The new business aims to address the “growing gap in the advice market” through a personalised, advice-led proposition.

The partnership will bolster Schroders’ expansion into the UK wealth management market, while Lloyds says it will help develop financial planning and retirement business.

Both companies say the union will make use of Schroders’ investment and wealth management experience and Lloyds’ client base, multi-channel distribution and digital capabilities.

In the arrangement, Lloyds will own 50.1 per cent of the share capital and Schroders the remaining 49.9 per cent. Lloyds will contribute £13bn of assets and its associated advisers from its existing Wealth Management business to the joint venture, which is set to start out in H1 2019.

Scottish Widows chief executive Antonio Lorenzo will be chairman while Schroders’ co-head of UK intermediary James Rainbow will become chief executive.

Additionally, Lloyds will receive up to 19.9 per cent in the holding company of Schroders’ UK wealth management Cazenove Capital, exposing its customers to its propositions in the process.

Lloyds will transfer approximately £400m of existing private client assets under management to Schroders’ UK wealth management business.

Schroders will be appointed as the active investment manager of approximately £80bn of the Scottish Widows and Lloyds insurance and wealth related assets. This appointment will be for at least five years. Lloyds expects the arbitration process to conclude early next year.

The management of £67bn of Scottish Widows insurance related assets start after the current arbitration process with Standard Life Aberdeen, or no later than when the existing contract ends in March 2022.

Schroders chief executive Peter Harrison says: “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 £80bn of assets for Lloyds’ and Scottish Widows’ clients.”

Lorenzo adds the new partnership hopes to become a top three UK financial planning business within five years given the “significant growth opportunities” in the planning and retirement market.

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