The sale follows a detailed review of the group’s private client activities which concluded that these discretionary investment management portfolios were no longer core for the group and the move is likely to result in 40 job cuts.
The deal would see around 6,000 customers with a total of approximately £1.27bn of funds under management transferred to Rathbones, subject to client consent.
If the deal completes, Lloyds will continue to manage £8.5bn assets under management for around 35,000 affluent and high net worth clients under its Investment Portfolio Management service which is not part of this transaction.
In addition to the sale, Lloyds has also secured an exclusive distribution agreement with Rathbone whereby affluent UK based clients of Lloyds with investable assets of between £250,000 and £2m, whose portfolio needs require significant assets in directly held investments, will be referred to Rathbones.
The agreement has an initial five-year term.
The amount Rathbones will pay for the businesses is based on a percentage of FUM as at the date of client transfer.
Assuming that all of the client FUM of £1.27 billion transferred to Rathbones, total cash consideration payable to Lloyds would be £35.4m.
Lloyds says it hopes to use natural turnover and to redeploy staff wherever possible and that compulsory redundancies will be a last resort.
The news follows the sale of Halifax Estate Agencies to LSL Property Services for £1 last week.
Lloyds managing director of UK private banking Tom Woolgrove says: “Lloyds has carried out a thorough review of its private client businesses and has concluded that a specialist provider would be better positioned to manage this particular service for our clients.”