Lloyds Banking Group is planning a big push into the wealth management market as part of its next three-year growth plan, to take advantage of sweeping pension reforms in the UK.
António Horta-Osório, chief executive, is preparing to unveil his third strategic plan in February after last month signalling his intention to remain at the lender. Speculation had mounted in the City of London that he would leave once Lloyds was back in private ownership.
The strategy is set to focus on Lloyds’ bancassurance offering, expanding its pensions and investments products while rolling them out to more customers to spur the lender’s next growth phase, according to one banker briefed on the plan.
The wealth management push comes after two years of so-called pension freedom in the UK under changes enacted by former chancellor George Osborne, unlocking access to retirement pots by dropping the requirement to buy an annuity.
For Lloyds, which has nearly a quarter of the UK current account market but only about 2 per cent of the wealth sector, the move will help fuel future growth. Banks are under pressure from record-low interest rates weighing on interest margins, and increasing competition in the mortgage market which is pushing down pricing.
The move by Lloyds is aimed at capitalising on its position as the UK’s only integrated high street bancassurer, allowing the lender to provide wealth and retirement services to its retail customer base.
Mario Mazzocchi, a pensions and investment director at Lloyds’ Scottish Widows business, said: “Lloyds Banking Group is in a unique position to offer financial planning, retirement and long-term savings solutions to retail customers and we expect demand for these products to grow, driven by a number of factors, including the introduction of pension freedoms, auto-enrolment and a shift from defined benefit to defined contribution pension schemes to name a few.”
Mr Horta-Osório has already restructured the bank in…