£80bn Joint Venture Deal Signed By Shroders And Lloyds Banking Group


This afternoon, one of the largest-ever wealth management alliances in the City was signed by Shroders and Lloyds Banking Group. They are joining forces in a multi-billion pound deal that is aimed at financial planning for wealthy customers.

As a part of the said joint venture, Schroders will take on a £80 billion investment contract from Scottish Widows, a subsidiary of Lloyds.

Shroders is the second largest listed fund group by assets under management in the United Kingdom. It said that it would be combining its investment expertise and technology with the client and distribution network of Lloyds.

The director of insurance and wealth at Lloyds Antonio Lorenzo, stated: “The aim is to become a top three UK financial planning business within five years.” Lorenzo is also the  Chief Executive of Scottish Widows.

The news was released in the wake of Lloyds announcing its intentions to ditch Standard Life Aberdeen (SLA) last February, which previously managed the funds.

A senior analyst at Hargreaves Lansdown, Laith Khalaf, stated: “Lloyds and Schroders may be tying the knot but there’s still a somewhat acrimonious divorce going on between the high street bank and Standard Life Aberdeen. This creates some uncertainty about when £67 billion of assets may be transferred to Schroder, which could be as late as 2022.”

Khalaf continued: “Part of Lloyds’ new strategy is to expand into the financial planning and retirement market, and the bank is targeting one million new pension customers by 2020. The government’s auto-enrolment programme is now firmly in the rear view mirror, which means Lloyds will have to pinch many of these new customers off someone else, so it needs to sharpen up its toolkit. To that end, it makes sense to team up with Schroders who have a wide range of investment capabilities and experience of managing pension assets.”