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Lloyds to bolster direct sales arm in RDR orphan client push

Lloyds has revealed plans to invest heavily in its “direct sales channel” to capitalise on clients it says have been left without access to advice by the Retail Distribution Review, after it posted strong half-year results on the back of a surge in business from so-called ‘orphan clients’.

Lloyds Banking Group’s results for the first six months of 2013 show a profit before tax of £2.1bn for the first half of 2013, a turnaround from the £456m loss registered for the first half of 2012. Underlying profit rose by £1.8bn to £2.9bn.

The bank recorded revenue growth of 2 per cent, with underlying income up 6 per cent. Cost and impairments were also reduced by 6 per cent and 43 per cent respectively.

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António Horta-Osório, group chief executive of Lloyds, said the improved performance and growing sales were based on a “strong pipeline” of business generated in the lead up to the RDR.

In particular he singled out the launch of the bank’s enhanced annuities proposition, which he described as a “key step to expanding our participation in the growing annuity market” and reflected the “significant potential” of serving the “growing direct market”.

Mr Horta-Osório: “We continue to see strong growth in corporate pensions, reflecting the strength of our proposition and the strong pipeline generated in the run-up to the implementation of the Retail Distribution Review, and have now launched our enhanced annuities product as a key step to expanding our participation in the growing annuity market.

“We see significant potential in serving the retirement needs of our retail bank customers and the growing direct market.

“We are investing in the capability of our direct channel with a focus on meeting the needs of customers who may no longer have access to independent financial advice, following the implementation of the Retail Distribution Review.”

Lloyds is not set to ditch the intermediary channel, Mr Horta-Osório added, and is planning to develop a new protection proposition aimed at advisers.

He said: “Similarly, we are committed to helping meet the UK population’s protection gap. We are developing our protection proposition for the intermediary channel to complement our market leading bancassurance protection proposition.”

Additional reporting by Ashley Wassall