This week we heard more about Schroders Personal Wealth, the joint venture with Lloyds which aims to become a ‘top three UK financial planning business within five years’.
The RDR largely killed off financial advice in bank branches as well as wresting control of fund distribution away from asset managers. Banks and asset managers both want to get closer to financial advice provision, especially because demand for advice has reached unprecedented levels.
Schroders already has a 77% stake in Benchmark Capital – which includes advisers and adviser technology. The new JV brings £13bn of assets and advisers from Lloyds with the potential to tap 26 million retail banking customers.
For Lloyds, the new venture validates its ability to provide best of breed investment services. High end clients will have access to the prestigious Cazenove, and overall £80bn of assets will be entrusted to Schroders as investment manager.
The JV will launch with 300 financial advisers and the ambition to get much bigger. This will bring new talent into the industry and training. It also rings PPI alarm bells, but there’s a different ethos at banks these days, not to mention a wariness of profit-killing fines. Schroders will be equally motivated not to get tarred with the same brush as the banks of yesteryear – eyes will be wide open going into this partnership.
In our latest UK D2C: Market Size and Structure report we observe that Lloyds could bring a ‘potent mix’ of brands into the advice gap – including Halifax Share Dealing and Scottish Widows. We expect to see a bolder D2C strategy and Schroders Personal Wealth steps firmly into the advice gap with an advised proposition.
Where Lloyds leads, can Barclays, HSBC and Santander be far behind?