The ambition was confirmed by Lloyds Banking Group in its annual results out today.
Lloyds Banking Group chief executive António Horta-Osório says he wants Schroders Personal Wealth to be one of the biggest Financial Planning firms in the UK within four years.
He said: “In partnership with Schroders, during the third quarter of 2019 we launched Schroders Personal Wealth, with the ambition of becoming a top three Financial Planning business by the end of 2023.”
Schroders Personal Wealth aims eventually to employ 700 Financial Planners and previous aims for the company have only referred to it as becoming a “leading Financial Planner.”
Schroders owns 49.9% of Schroders Personal Wealth with the remaining 50.1% owned by Lloyds Banking Group. In October Schroders made changes to the leadership with Schroders Personal Wealth chief executive James Rainbow moving to a new role to be replaced by Peter Hetherington.
The company, a joint venture between Lloyds Banking Group and Schroders, saw 500 staff from Lloyds transferred to the new business.
Overall the Lloyds group reported pre-tax profit for 2019 down 26% to £4.4bn, mainly due to PPI costs of £2.45bn in 2019 (2018: £0.75bn).
The annual results do not clarify the cost of setting up Schroders Personal Wealth but the results refer to a cost of £471m related to “severance- related costs, the integration of Zurich’s UK workplace pensions and savings business and costs associated with the establishment of the Schroders Personal Wealth Joint venture.”
Lloyds Banking Group says it is expecting more profits in future to come from its Insurance and Wealth division, which includes Schroders Personal Wealth.
The Insurance and Wealth division, which includes half of Schroders Personal Wealth, now has assets of £170bn with ambitions to increase this significantly. Underlying profit for the division rose 19% in 2019 to £1.1bn.
Insurance and Wealth provides insurance, investment and wealth management products and services and serves 10m customers.
The annual results state: “The Group continues to invest significantly in the development of the business, with the aims of capturing considerable opportunities in pensions and Financial Planning, offering customers a single home for their banking and insurance needs and driving growth across intermediary and relationship channels through a strong distribution model.”
Figures for pensions and investment arm Scottish Widows are not reported separately in the results but the bank noted that Scottish Widows now offers its standard annuities on the open market and is aiming to achieve a 15 % market share by the end of 2020.
There was strong growth in life and pensions sales. These were up 22%, driven by increases in new members in existing workplace schemes, increased auto enrolment workplace contributions and bulk annuities. The company says it is on track to achieve a 15% market share of workplace business by end of 2020 compared to a 10% market share at start of 2018.
Lloyds Group signed up 1m new pension customers during 2019.