Lloyds stumbles in its wealth management dash for cash

Digest opened free editor

Rola Khaleda, FT editor, chooses her favorite stories in this weekly newsletter.

Lloyd Bank’s plan is scheduled to end to become a major player in the UK wealth management by collaborating with Schrooders as it started: with the deadline.

The presentation of their joint project in 2019 due to technology problems and uncertainty in the exit of Britain from the European Union. This month, the annual results of the project will be deployed late due to the accumulation of the companies ’house. These accounts may be the last Schrooders Personal Wealth: Lloyds plans to restore control From the entire work.

These simple delays speak to a larger issue that has robbed the partnership from the beginning: it is amazingly difficult to build a large wealth management company in the United Kingdom.

Financial advice is one of the most attractive sectors in the financial sector in the United Kingdom. The profit margins are high, the capital requirements are low, the number of potential customers grows and the financial authority is Trying to reduce Organizational barriers. But because of it, everyone wants a piece. Banks, private stock companies, asset managers, insurance companies and advice specialists are all fighting them.

The Schrooders Personal Wealth could have been a huge opponent, combining the network of the largest retail bank in the UK and the investment Schrooders expertise, while shipping the project with the brand that attracts good efficiency customers.

But it is struggling to meet Early ambitious goals. The assets subject to management increased by only 15 percent between 2019 and 2024, to about 16 billion pounds. The assets increased in the ST James’s Place-which was owned by the majority by LLOYDS-by 63 percent during the same period.

New companies that want to provide personal advice have additional challenges. Besides keeping customers happy, they also need to attract quality consultants. It can be difficult for high -street banks in view of their history in hot and cold running in their commitment to wealth management. Young investors who are happy with happiness may prefer real human consultants because their wealth is increasing in size and needs more complicated.

True, neither LLOYDS nor Schroders surrender. Lloyds hope to take advantage of all its group rich services under one roof, while Schrooders still target a similar customer base through its standard capital arm. If anything, the competition will only grow: Jpmorgan Chase was the latest heavy weight Announcing major expansion plans Earlier this week.

Lloyds President Charlie Nun has less than his predecessor Antonio Horta Odorio when she launched the Schrooders project. Next, reduce low interest rates from other growth prospects for the bank; This is no longer the case. You can invest and wait for some time to pay, like the so-called “Henry” wealth managers: the owners of the observers, not the wealthy-so far.

Nicholas.megaw@ft.com