The new JV is going to be branded “Schroders Personal Finance” (SPF) and the number of advisers will increase from 300 to 600 in three years, and we expect that figure to double thereafter.
It seems that running down the clock is catching on. Much of the goodwill generated by the recent conferences, attended by advisers and the new Chief Executive, has evaporated on the back of a 30-minute teleconference by Ms Sarah Deaves. The need to engage and motivate this key group of staff made her announcement of the proposed changes to terms and conditions all the more puzzling. Instead of allaying fears and reducing anxiety, she’s done the exact opposite and in many ways made things much worse.
The Bank says that staff have two weeks to comment on the proposed terms and conditions and that timescale was agreed by Unite and Accord, who between them have had just one meeting with Wealth Management. Why two weeks? Staff are moving over to Schroders at the end of June, not the end of February. The terms and conditions proposed by the Bank are not revolutionary and could easily have been produced within a week of the JV being announced. Why wait so long to provide inadequate information to this key group of staff?
What No Compensation?
The Bank talks a lot about what’s going to happen to the reward package next year but how can it be trusted to deliver on that when it’s have offered no compensation to staff for the loss of their existing benefits.
Staff mortgages, Sharesave, Sharematch and other LBG financial products are all going but the Bank is offering no compensation whatsoever. We have never seen that before in any TUPE outsourcing. Given that LBG will still own 51% of the new company and will still be offering services to the business after the transfer date, why can’t banking benefits continue until such time as alternative arrangements have been put in place by Schroders? Staff shouldn’t forget that 51% of the profits of the new business will be going back to the Bank and its shareholders.
We are aware that following the announcement of the terms and conditions many advisers have started to talk to recruitment consultants about opportunities outside of Lloyds Banking Group and Schroders. The Bank has been warned and shouldn’t be surprised if staff decide to vote with their feet.
DB Pensions Ignored
The one piece of the jigsaw missing from last week’s announcement was compensation for those staff in one of the Bank’s defined benefit pension schemes. How can staff comment on the package when one of the key elements is missing? Is the Bank going to do what TSB did and offer staff a one-off compensation payment of 27.5% or is it going to do what it did with IBM and give staff a 10% uplift in salary to take into account the loss of this valuable benefit.
A possible 3% uplift in salary to enrol into the Schroders Defined Contribution Pension scheme is not enough compensation for the loss of such a valuable benefit. Those members who left the DB scheme because they had reached their Lifetime Allowance (LTA) have been told that their 10% uplift in salary will be maintained when they transfer to the JV.
Members need to know what compensation they are getting, if anything, for leaving the DB scheme now, and not at some point in the future.
Job Security
A number of members wrote to Ms Sarah Deaves following the announcement of the JV asking her to confirm the legal position of the Bank’s job security policy and enhanced severance terms. A copy of that letter can be found at https://files.btuonline.co.uk/letters/Letter_Deaves_Feb19.pdf. We would advise all staff transferring to Schroders to send that letter.
Ms Deaves, one assumes after taking legal advice, has so far refused to respond to those letters. We have produced a second letter for members to send to Mrs Deaves and that can be found here https://files.btuonline.co.uk/letters/LetterTwo_Deaves_Feb19.pdf. If Ms Deaves continues to maintain her silence on this important issue, that silence will become significant if there is a legal dispute over the enhanced severance terms.