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Editor’s note: Banks need to decide what they really want from advisers

Justin Cash, Editor of Money MarketingWe’ve heard an awful lot from banks about returning to financial advice recently. The fact that many of
these announcements have, once you dig down into them, revealed little more than shiny new direct-to-consumer investment platforms for low-value savers means that they have been a damp squib for the most part.

But given Scottish Widows’ recent fight with the newly merged Standard Life Aberdeen, when its parent company, Lloyds Banking Group, said that acquiring £50bn in financial planning assets was one of its core objectives for 2020, we sat up and took note, particularly since wording like “high-quality” and “personalised solutions” seemed to suggest at least some additional face-to-face services.

Given a history of misselling scandals, it would have been a tough pitch to come out in a more explicit fashion and say in big, bold letters that the company was hiring dozens of face-to-face advisers again. The language of “multi-channel distribution approaches” is much more investor and public-relations friendly.

Shame is, it tells us little about what the bank actually intends to do when it
comes to financial advice. Again, it is certainly worth digging a little deeper for what the real bank advice strategy is here.

Our cover story this week on the strategic direction of Lloyds, Standard Life and Aberdeen

After researching our cover story this week, we finally seemed to have hit on what is actually going on when Lloyds says it wants to “meet its customers’ growing financial planning needs” and “capture the significant opportunity arising from the growing financial planning market”.

Basically, it wants serious skin in the financial planning game. It just doesn’t want to go back to owning the advice. Taking each of Lloyds’ recent strategic decisions in turn is a good indicator. Why did it buy Zurich’s workplace business? Because it wanted a reliable revenue stream from auto-enrolment assets. Why didn’t it buy Zurich’s retail adviser platform? Because it didn’t want to bear that level of responsibility for planning done on it.

Why did Lloyds launch a new set of retirement funds? To capture a post-freedoms surge in pensions wealth that needed direction. Why did it pick Standard Life for that mandate, when it had just taken £109bn away from it with the other hand? To dilute a competitor in the retirement space, to force Standard Life Aberdeen to make the transition into a fully fledged investment house faster than it may have wanted.

Why is it promoting its D2C platform again? So, one day, hopefully those customers will become wealthy enough to be served by its private client business.

“Multi-channel” indeed. Just don’t call it holistic advice yet.

Justin Cash is editor of Money Marketing. Follow him on Twitter @Justin_Cash_1


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  1. Interesting to note the focus on D2C at a time when others such as Aegon and IFDL are withdrawing from that market.

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