Schroders and Lloyds to end wealth management partnership-report
Lloyds Banking Group is set to acquire full ownership of Schroders Personal Wealth (SPW), ending its joint venture with Schroders, according to the Financial Times (FT) report.
The decision follows the unit’s failure to meet growth targets and a high turnover of chief executives, according to sources familiar with the matter.
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Lloyds will take over Schroders’ 49.9% stake in the venture, gaining sole control after a challenging period for SPW.
The joint venture, initiated in 2019 by then Lloyds CEO António Horta-Osório and Schroders’ Peter Harrison, aimed to target the mass affluent market segment.
SPW was launched with £13bn in assets and financial advisers from Lloyds’ existing wealth management business.
Despite the assets growing to reach £15.7bn with 300 financial advisers by the end of 2024, SPW fell short of its ambitious targets, according to the publication.
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By GlobalDataInitially, Lloyds aimed for SPW to become a top three UK financial planning business, with assets under management reaching £25bn within five years.
However, SPW postponed this goal in 2021, targeting a top three position by 2025.
By assuming full control of SPW, Lloyds is enabled to offer a broader range of products to its over three million mass affluent customers, those with more than £50,000 to invest.
This move is said to align with Lloyds’ CEO Charlie Nunn’s strategy to boost growth in the insurance and wealth sectors, which are less affected by interest rate fluctuations than traditional banking.
According to FT report, the wealth management landscape has shifted since regulatory changes in 2012 reduced commission-based financial advice.
However, Nunn has prioritised expanding Lloyds’ wealth and insurance offerings as part of his strategic focus, given limited opportunities to grow the bank’s core business.
Meanwhile, Schroders continues to focus on its wealth management division for more affluent clients, recently making several senior appointments to strengthen ties with its asset management operations.
In 2023, SPW selected Aveni to use its AI-based platform, Aveni Detect, to supervise interactions with customers and create data-driven compliance evidence.
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