Lloyds Banking Group (LON:LLOY has entered into a strategic wealth management partnership with Schroders (LON:SDR), the bailed-out lender has said. The bailed-out lender has further selected Schroders to manage £80 billion of assets, part of the £109-billion portfolio which Lloyds is pulling out of Standard Life Aberdeen (LON:SLA).
Lloyds’ share price has slipped marginally into the red in today’s trading, having given up 0.34 percent to 56.24p as of 14:29 BST, outperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 1.11 percent to 6,964.40 points. Schroders’ shares price meanwhile is 3.33 percent worse off at 2,673.00p.
Lloyds and Schroders unveil alliance
Lloyds and Schroders announced in a statement today that they were entering into a strategic partnership to create a wealth management proposition, combining the bailed-out lender’s client base, multi-channel distribution and digital capabilities with Schroders' investment and wealth management expertise and technology capabilities.
The companies will set up a new financial planning joint venture for affluent customers, with Lloyds holding 50.1 percent of the share capital, and Schroders owning the remaining 49.9 percent. Lloyds will transfer approximately £13 billion of assets and associated advisers from its existing Wealth Management business to the new company, which aims to commence activities by the end of the first half of 2019. It will be led by a management team comprising representatives from both partners.
Investment management contract
Lloyds has further decided to appoint Schroders as the active investment manager of approximately £80 billion of the Scottish Widows and Lloyds insurance and wealth related assets, with the appointment to be for at least five years. The assets are part of the £109-billion portfolio which Lloyds is pulling out of Standard Life Aberdeen, with the bailed-out lender having recently awarded a £30-billion investment contract to BlackRock.