The decision of Lloyds Banking Group to abandon its joint venture by taking full control of Schroders Personal Wealth (SPW) after just 6 years is humiliating. No amount of spin on the part of Mr Barua, CEO of Insurance, Pensions and Investments, can turn it into a good news story, especially for those ex-Lloyds staff who are still left in the SPW business.
When SPW was launched back in 2019, with assets of £13bn and 33k customers, Lloyds said it had: “the trajectory to become a top three financial planning business for customers with target assets of £25bn within 5 years.”. That was pie in the sky. The top three financial planning business have grown significantly since 2019 whereas SPW stuttered and stalled. At the end of 2024 it had assets of just £15.7bn. It would probably have achieved more if it had stayed part of Lloyds. SPW was an unmitigated disaster from day one. Within 12 months of launching the business it was making 200 of its staff redundant, the technology never worked, the marketing of the business which staff had been promised never materialised and it suffered from a high turnover of Chief Executives who quickly realised the business was going nowhere. Now we’re getting more marketing puff to talk up this reversal!
Mr Barua – like all his predecessors – talks the talk about creating “a distinctive end-to-end wealth proposition under the Lloyds brand” but Lloyds had that before SPW was launched. Equally, he says: “By bringing SPW back into Lloyds Banking Group, we have bridged that advice gap and now offer a distinctive end-to-end proposition, powered by brilliant in-person and digital experiences to help our customers in their wealth creation. No handovers, no barriers.”. Lloyds created the handovers and barriers in the first place. And why is he going to succeed in targeting the “mass affluent” section of the Lloyds customer base (3 million) when all his predecessors have failed? A Trustpilot score of 4.8 is not going to persuade those customers to move their assets to Lloyds. So, what is he going to do that St James’s Place, Hargreaves Lansdown, Quilter, Rathbones, AJ Bell and Vanguard aren’t doing? Simply willing it to happen is not good enough. One shouldn’t forget that St James’s Place, the largest wealth management business in the UK with funds under management of £179 billion, was sold by Lloyds for a song back in 2013.
There are 300+ financial advisers and support staff in SPW many of those will have transferred with the business back in 2019. At the time of the transfer staff had to leave one of the Bank’s defined benefit pension schemes with minimal compensation. Some of their other benefits also disappeared without any compensation. Will ex-Lloyds staff get those benefits back now and what about rejoining the DB schemes? Is Lloyds prepared to do the right thing for those staff who didn’t want to leave in the first place.
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