Lloyds Banking Group (LBG) and Schroders said on Tuesday they agreed a multi-billion pound wealth management joint venture that sees Schroders appointed as the active investment manager of £80 billion of Scottish Widows and Lloyds assets.
About £67 billion of the £80 billion represents a large slice of the £109 billion mandate Lloyds has said it will move from the previous manager Standard Life Aberdeen.
The assets previously managed by Standard Life Aberdeen (SLA) are subject to arbitration, after SLA disputed Lloyds’ right to terminate the contract.
However, Lloyds said the assets will transfer to Schroders regardless of the outcome of the arbitration — either once the arbitration is complete or when the LBG’s contract with SLA expires in March 2022.
Antonio Lorenzo, chief executive of Scottish Widows and LBG group director of insurance & wealth, said: “The unique combination of two of the UK’s strongest financial services businesses will enable us to create a market-leading proposition which will benefit customers.
“The aim is to become a top three UK financial planning business within five years, given the significant growth opportunities in the financial planning and retirement market combined with the new company’s ambitious medium term growth strategy.”
Lloyds Banking Group CEO António Horta-Osório said: “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 CEO Peter Harrison said: “Wealth management is a strategic priority for Schroders.
“In combining our award-winning technology and world-class investment expertise with Lloyds’ significant 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.”
Under the deal, Lloyds and Schroders will establish a new financial planning joint venture company (JV) for affluent customers.
Lloyds will own 50.1% of the share capital and Schroders 49.9%.