Lloyds’ Wealth Management Push Sets The Stage For War With Rivals Over Top Talent

  • Feb 12, 2019 GMT
  • Team Kalkine
Lloyds’ Wealth Management Push Sets The Stage For War With Rivals Over Top Talent

Lloyds Bank, one of the largest companies within FTSE 100 and listed on both London and New York stock exchange, has many household names. Lloyds Bank, Scottish Widows, Halifax, and Bank of Scotland are some of its brand names familiar with the people, which offer several distribution channels for its customers.

Lloyds Bank, in a strategic move, collaborated with Schroders to launch a financial planning JV some time back. In the UK, Schroders is the largest listed fund management group in terms of asset being managed; Lloyds is its biggest retail lender.

The high-profile deal was one of its kind between a fund manager and British Bank, aimed at combining the investment offering from Schroders with Lloyds strong 27-mn firm customers and distribution network. The stated goal with this JV is to become a top three business in the financial planning segment in the UK.

Lloyds Bank is aiming to strengthen its insurance and wealth management sector off-late. Also clear from its recent actions, the company transferred assets worth over £30bn to BlackRock for an alliance.

With its newly found-interest and capacity into Wealth management, Lloyds Bank is pushing for hiring as many as 700 wealth managers.

The JV will place Lloyds at the helm with a 50.1 per cent stake of the newly found entity, remaining 49.9 will be with Schroders. The Lloyds bank will push a total of £13bn of assets and associated advisors from its current AUM to the JV, further, £400mn of its private client assets will be pushed as well, as soon as possible, as per the joint statement by the companies.

Lloyds Bank will take 19.9 per cent stake, as a part of the deal, in the UK wealth management business of Schroders.

Close to 300 wealth managers will be joining the JV at its launch, stipulated to happen later this year. The number may rise to 1000 in the next five years, as per comments by a person familiar with the developments while Lloyds Bank declined to comment on the issue.

The approach taken by Lloyds Bank puts it at loggerheads with other wealth management firms like St James’s Place, especially for attracting the right fund managers. The bank had a stake in St James’s Place once, and the company grew on the similar lines of coming in partnership with independent advisors.

The price war is inevitable for the talent as the industry figures show an ageing and dwindling pool of qualified advisors. A senior executive at Lloyds bank said that the competition for talented advisors is very high, forcing companies to pay huge upfront to hire the right person.

What gives a real sense of the shortage for Mr Right is that people close to discussions said that the JV is more likely to pick Schroders’s name to attract the wealth managers to make it more appealing to staff members.

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