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Schroders and Lloyds advice venture will go-ahead as planned

Schroders and Lloyds advice venture will go-ahead as planned

The timing of a transfer of assets to the joint advice venture Lloyds has planned with Schroders remains to be decided, following a tribunal ruling.

Today (March 19) it was revealed a tribunal ruled that Lloyds Banking Group didn't have the right to terminate a £100bn fund management contract with Standard Life Aberdeen.

Lloyds believed it could remove the assets as they had been managed by Aberdeen.

When Aberdeen merged with Standard Life, which had an insurance business, Lloyds invoked what it believed was a clause in the fund management contract allowing it to terminate the contract if the investment house was taken over by a competitor.

Aberdeen had managed the money on behalf of clients of the Scottish Widows business owned by Lloyds Banking Group.

The £100bn was to be moved to the new Schroders Wealth business that Lloyds and fundhouse Schroders are in the process of creating, with some of the capital also, separately, being awarded to BlackRock to manage.

The intention was for £30bn of that pool of assets to be managed by BlackRock, £13bn to be placed within the new joint advice venture, named Schroders Personal Wealth, and the remainder to be managed by Schroders on a fund management contract.

A source close to Lloyds revealed the launch of Schroders Personal Wealth will still go-ahead in June. The timing of the transfer of the £13bn is said to be still 'up in the air'.

The Schroders Personal Wealth business, which will see Lloyds look to hire 700 financial advisers to support the business, will be 50.1 per cent owned by Lloyds Banking Group and 49.9 per cent owned by Schroders.

The target market for the venture is those with a minimum of £100,000 in investible assets and the chief executive of the new business is James Rainbow, formerly co-head of intermediary at Schroders.

Lloyds and Standard Life Aberdeen will now negotiate a termination of the investment mandate contract.

A spokesman for Schroders said the joint venture will go ahead as planned as the timetable for the transfer of the assets was always set to happen following the arbitration process, "irrespective of the outcome".

Jason Hollands, managing director for business development and communications at wealth manager Tilney, said: "Lloyds and Schroders would have known there was an ongoing arbitration process, so the timing was never predictable.

"I think there will now be a negotiation on fees to be paid by Lloyds to Standard Life, but by no means do I think this is a deal breaker, but there will be conversations about fees to bring the money across."

When the Schroders Personal Wealth business launches in June, around 300 advisers presently employed by Lloyds will transfer to the new business.

Individual clients of Lloyds will move over as their annual review comes up.

New clients will not be able to join the new advice business until later in the year.