Schroders and Lloyds partner for financial planning firm

Lloyds takes 20% stake in Cazenove as Schroders nabs £80bn Scottish Widows contract

After much speculation Lloyds and Schroders have struck a deal to enter into a strategic partnership, which will see them be equal joint-owners of a new financial planning company.

The joint venture will capitalise on what the firms have identified as a “growing gap in the advice market”. It is due to launch by mid-2019.

Lloyds will own 50.1% of the share capital, while Schroders will own the remaining 49.9%.

As part of the deal, Lloyds will transfer £13bn to the JV. It will also receive a 20% stake in Schroders’ wealth management business Cazenove Capital.

Schroders meanwhile has snagged the remaining £80bn Scottish Widows contract, as widely predicted. Its appointment will be reviewed every five years. Earlier this month, Lloyds appointed Blackrock to run £30bn of the mandate, which it yanked from Standard Life Aberdeen in Q1 this year.

The strategic partnership will combine Schroders’ investment and wealth management expertise with Lloyds’ significant client base and multi-channel distribution and digital capabilities, a stock exchange announcement from the pair said on Tuesday.

The duo has ambitions of the joint venture becoming one of the top-three UK financial planning businesses within a short span of just five years.

Schroders co-head of UK intermediary James Rainbow (pictured) and Scottish Widows chief executive Antonio Lorenzo are set to become chief executive and chairman of the new financial planning business, subject to regulatory approval.

António Horta-Osório, group chief executive of Lloyds, 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.”

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