FinTech: Bankers Fight For Wealth Management Turf; Lloyds Acquires Embark For $500M

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Lloyds will acquire all of the Embark Group’s share capital and its digitally-led retirement solutions business.

Lloyds Banking Group (LON: LLOY) announced Thursday (July 29, 2021) the acquisition of Embark Group, an investment and retirement platform business, for £390 million (US$500 million). Embark will become a wholly subsidiary of Lloyds’ Scottish Widows Group, bringing with it about £35 billion of assets under administration on behalf of 410,000 consumer clients. Jackie Leiper, Managing Director Pensions, Stockbroking & Distribution at Scottish Widows, will become CEO of Embark. (Lloyds Banking Group)

The transaction excludes Embark’s Rowanmoor SIPP and SSAS administration business, which is being retained by existing shareholders. According to Lloyds, this accounts for only £5 billion out of over £40 billion assets under administration.

Investment rationale

Lloyds said in a statement the acquisition would help it boost its presence in the mass market and self-directed Wealth segment, thereby completing its Wealth management services.

Lloyds will also re-platform its pensions and retirement proposition. In sum, the transaction will deliver a modern, industry-leading mass market, direct-to-consumer proposition, complementing its existing advice offerings.

Lloyds intends to achieve a top-three position in the direct-to-consumer self-directed and robo-advice business in the medium term. The bank is also targeting a top-three position in the individual pensions and retirement drawdown market by 2025.

Antonio Lorenzo, Chief Executive, Scottish Widows, and Group Director, Insurance & Wealth, Lloyds Banking Group said: “There’s ever-growing customer demand for clear, simple, and affordable financial planning and retirement products and services. Our acquisition of Embark will not only help us serve all of a customer’s financial needs in one place but also sit alongside our existing partnerships which meet the more complex financial planning and investment requirements of mass-affluent and high net-worth customers through Schroders Personal Wealth and Cazenove Capital.”

“Through Embark’s technology, we will be able to increase the reach of our investment offerings for customers who are happy to manage their own portfolios, through modern, easy to use technology. We will also be able to enhance our intermediary proposition, strengthen our offering in Retirement and modernize the way Scottish Widows works with advisers, recognizing the continued value of advice.”

Related Story:  UK-Based PensionBee Reports Assets Under Administration Have Doubled In A Year                                                 

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