Lloyds Banking Group has revealed it is expanding into the financial advice market with Schroders partly because of a "lack of advisers coming through."
During the Autumn half-term holidays, Lloyds Banking Group and Schroders unveiled plans to launch a financial planning business that they hope will be in the top three in the UK within five years.
The business will launch by the middle of 2019 and will see Lloyds transfer some £13bn of assets and associated advisers from its existing wealth management business to the joint venture.
Lloyds will own 50.1 per cent of the joint venture.
A spokesman for Lloyds said: "The focus there for us is more around drop off in the market and lack of IFAs coming in, etc.
"So (we are) looking to provide a personalised, advice led proposition for affluent customers."
The advice gap is typically used to describe the fact the price tag for advice has become too expensive for the mass market.
Back in 2016 Andrew Bailey, chief executive of the Financial Conduct Authority, admitted the Retail Distribution Review had played a part in widening the advice gap.
At the FCA's annual public meeting, he said while the RDR had achieved the objective of removing opaque charges and raising professional standards of intermediaries, it had caused advisers to pull away or make their service too expensive for one-off or limited advice.
In 2015 the regulator reported that in 2007, two-thirds of retail investment products were sold with professional advice. This conjunction of professional advice and product sales is also a feature in other countries, it added.
However, in recent years there was a decline in the number of financial advisers offering professional advice - from around 26,000 in 2011 to 24,000 in 2014.
The new joint venture advice company will have Schroder's James Rainbow as chief executive.
Mr Rainbow joined Schroders back in 2007 as head of marketing and has since held the positions of head of UK financial institutions and strategic accounts as well as, more recently, co-head of UK intermediary.
Antonio Lorenzo, head of Lloyds insurance business, will be the new venture's chairman.
The investment industry has responded positively to the news of Lloyds and Schroders joint venture.
Ian Gordon, a banks analyst at Investec, said he expects little upfront cost to Lloyds from setting up the venture but that there could be significant earnings growth potential for the business if it succeeds.
Eric Moore, who runs the Miton Income fund and holds shares in Lloyds, said the bank was pretty much "maxed out" in all of the markets it operates in within the UK, so a move to significantly grow the advice business is logical.
The new joint advice venture is part of a wider deal between the companies, with Schroders taking over as manager of £80bn of Scottish Widows assets that had previously been managed by Aberdeen Asset Management.