Lloyds Bank is considering to reintroduce financial planning in its branches, as it looks to grow its pensions business.
As mobile banking has become increasingly popular among consumers, the bank said it is looking at ways in which its branches can be changed to help meet the more complex needs of many of its customers.
Lloyds currently offers retirement advice to customers with more than £100,000 in savings, and is now considering to offer face-to-face advice across its branches to give the company a competitive advantage.
A spokesperson said: "We’re looking to meet more complex customer needs in branch, including mortgages, moments of truth such as bereavement and representative access.
"We are already providing financial planning, investment and retirement needs through IFAs and our private banking business but are currently exploring how best to support our retail banking customers with their financial planning and investment needs in branch."
The reintroduction of financial planning is something the bank is looking at following a £3bn investment in its strategy to develop its pensions business.
IFAs have historically been critical of banks offering advice, due to their history with giving bad advice.
But it appears some can see the merits of banks reentering this space post pension freedoms, to help lower net worth clients plan for their future and minimise the frequency of mis-selling scandals.
Alan Chan, director and financial planner at IFS Wealth & Pensions, said: "To a certain extent this was inevitable and the banks were in prime position to fill the advice gap for smaller net worth clients.
"It is not commercially viable for an IFA to advise and arrange a £50 per month Isa for example. This market was traditionally served by the banks so it can lead to good outcomes."
But he added: "It’s also important for those restricted advisers to be aware of their limitations and have a process in place to refer clients that are higher net worth or with more complex finances that an IFA can deal with more effectively."
Mr Chan said for this to be successful banks needed to move away from a sales culture and remunerate their advisers differently to the old commission-based model, which was banned by the Retail Distribution Review in 2013, and in turn led to many banks shutting their doors to advice.
"This will help minimise cases of mis-selling scandals in the future and stop history from repeating itself," he said.
Tom McPhail, head of policy at Hargreaves Landsdown, said: "People need help planning their finances and banks are uniquely placed to deliver that help.
"Over recent decades the pendulum has swung between banks overplaying their hand and getting caught up in mis-selling scandals and then completely withdrawing from the market to lick their wounds. Hopefully Lloyds will get the balance right."
Yesterday (1 August) Lloyds published its half year results to the end of June.
The bank has seen its life and pension sales go up by fifty per cent to £7.5bn in the first half of 2018, compared with £5bn in the same period last year.
Lloyds said life and pensions sales were bolstered by the increase in new members in existing workplaces schemes as a result of auto enrolment and workplace contributions and bulk annuities.
Lloyds writes its workplace pensions business through subsidiary Scottish Widows, which announced a deal to buy Zurich's workplace pensions arm late last year, and is also currently exploring ways to offer robo-advice.
During the first half of 2018, the bank’s life and pensions new business income was up seventy-five per cent to £268m compared with £153m during the first half of 2017.
The company generated more than £1m in new business premiums through four bulk annuity transactions, including its deal with Littlewoods Pensions Scheme, which leveraged its existing relationship with Commercial Banking.
Lloyds has previously said it is targeting a fifteen per cent share in the corporate pensions new business market by 2020.
The company said the increase in new business income within life and pensions was offset by a £54m decrease in its general insurance income.
António Horta-Osório group chief executive of Lloyds Bank, said: "We have delivered another strong financial performance with increased statutory profits, higher returns, and a strong capital build.
"There has been significant business progress including the successful delivery of Open Banking, the launch of Lloyds Bank Corporate Markets and the planned integration of MBNA and Zurich’s UK workplace pensions and savings business.
"In February we announced an ambitious strategy to transform the group for continued success in a digital world. We have made a strong start in implementing the strategic initiatives which will further digitise the group, enhance customer propositions, maximise our capabilities as an integrated financial services provider and transform the way we work."
rosie.quigley@ft.com
