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Osorio to put Widows’ “front and centre” after Lloyds review

Lloyds Banking Group is expected to confirm its intention to retain Scottish Widows tomorrow as it looks to profit from the “mass market” advice gap post-RDR.

The bank’s insurance arm was thought to be under threat as part of chief executive Antonio Horta-Osorio’s strategic review of the business, with analysts pointing to a potential £7bn flotation.

However, Osorio is now expected to place the provider “front and centre”, with a focus on its intermediary and bancassurance offerings.

Lloyds plans to use Widows’ investment, protection and savings products, which will then be sold through the bank’s high street branches.

The bank is also expected to confirm plans to “rationalise” its international businesses.

A source says: “Antonio sees that there’s a big opportunity for growth both in the intermediaries sector, as well as in bancassurance.

“RDR is going to create a mass market gap, and Lloyds will be able to use Scottish Widows as the place that can manufacture protection, investment and savings products, which can all be sold through Lloyds many, many branches.

“Widows’ really is going to be front and centre tomorrow.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Will this will help them avoid a little of the criticism directed at Lloyds? Perhaps one day they’ll repackage the whole outfit and hope consumers forget who fleeced them!

  2. This must be pleasant news for the consumer Lloyds can now rip off more of its customers and get away with itThe FSA will be pleased

  3. Simon Little, Autumn Life Retirement Solutions Ltd 29th June 2011 at 5:34 pm

    I look forward to this being confimred tomorrow. He seems to have realised the value in the Brand that is Scottish Widows. Lets hope they re-enter the Equity Release market whilst they’re at it.

  4. So, business as usual for Lloyds/Scot Wid

  5. The new regulator should force Lloyds group to sell Scottish Widows as they are obviously unable to give high quality advice. You only have to look at their past record to confirm this with mis-selling of structured bond products and also the banks mis-selling PPI insurance.

    If the regulator is serious about creating companies that give high-quality financial advice then banks should be banned from this activity entirely and only be allowed distribute products.

    I hope that the regulator will not allow them to pose as Independent Financial Advisers as many of the present bank assurance models that claim this are clearly not!

    What is needed by the consumer is greater choice and it is obvious to anybody that the Lloyds banking group needs to be broken up into several individual parts and that Scottish Widows needs to be independent of any banking group once again.

    The other concern in the insurance industry at present is the mergers of large groups or takeovers e.g. Axa and Friends Provident have we learned nothing that big is not always beautiful.

  6. Sell, Sell, Sell thats what got you banks into trouble in the first place.

    How about following the FSA guidelines and Advise, Advise, Advise. Dont forget to give them your fee charging structure.

  7. As a colleague at LBG, it would be nice to see abit more thought from people when discussing the review. Normal colleagues of the bank who work there to earn a living do need to see constant scrutiny from Joe Bloggs every two minutes.

  8. So Mr. Horta-Osório makes a commitment to Scottish Widows “both from an intermediary and bancassurance point of view”. Well I have always wondered why any IFA would use SWF anyway. It is a fact of business that we need to differentiate ourselves – so what is the point stocking a product that can be bought through any old high street bucket shop? If they had a ‘must have’ then one would have to consider, but they patently don’t have that. What they do have can be sourced equally well if not better from a plethora of suppliers who aren’t found in every local bank. Anyway it would seem that we are in for the same old banking nonsense, pile it high, sell it dear and build in a 15% compensation margin at the outset.

    Perhaps Mr Horta-Osório needs to read Money Marketing:

    FSA attacks banks over aggressive selling tactics
    FSA’s Margaret Cole says high risk of misselling will remain unless banks’ business models are changed.

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