Your IndustryAug 14 2017

Lloyds targets bigger slice of financial advice market

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Lloyds targets bigger slice of financial advice market
ByDamian Fantato

Lloyds Banking Group is planning to push into the financial planning market as part of its three-year growth plan.

The company’s pensions and investment director, Mario Mazzocchi, said the move would see the lender take advantage of the recent pension reforms, which has seen billions of pounds released from nest eggs into the wider financial services market.

Speaking to FTAdviser’s sister paper the Financial Times, he said: “Lloyds Banking Group is in a unique position to offer financial planning, retirement and long-term savings solutions to retail customers and we expect demand for these products to grow, driven by a number of factors, including the introduction of pension freedoms, auto-enrolment and a shift from defined benefit to defined contribution pension schemes to name a few.”

Lloyds will be unveiling its strategic plan in February, which looks set to focus on the company’s bancassurance service.

The bank already has a wealth management service, but it is limited to those with at least £100,000 of savings and investments, including personal pensions, or a sole annual income of at least £100,000.

Lloyds' decision to expand further into financial advice makes it just the latest bank in recent months to make a return to the sector, after years of absence following the tightening of professionalism rules for advisers introduced by Retail Distribution Review in 2012.

Last year Royal Bank of Scotland said it would augment its mass market retail investment advice.

Meanwhile HSBC has also been testing standalone investment advice, where the bank would give advice on investments only without considering the customers’ wider financial situation.

Santander UK also restarted branch-based investment advice two years after it was hit with one of the biggest ever retail banking penalties for giving unsuitable advice to customers.

Earlier this year the Financial Conduct Authority revealed it was working with five banks as part of its advice unit, a project aimed at increasing access to low-cost advice.