Lloyds Banking Group (LON:LLOY) is said to be planning a big push into the wealth management market under its next strategic plan.
In an effort to take advantage of pension reforms in the UK, chief executive Antonio Horta-Osorio will unveil the plan as part of the group’s three-year growth plan in February next year, the Financial Times reported, citing a banker briefed on the strategy.
The new strategy will focus on Lloyds' bancassurance offering, expanding its pensions and investments products while rolling them out to more customers, the banker said.
Lloyds has only about 2% of the UK’s wealth sector and is hoping to take a larger chunk of the market after changes by former Chancellor George Osborne unlocked access to retirement pots by dropping the requirement to buy an annuity.
The bank’s push into the wealth sector comes as lenders are under pressure from record-low interest rates weighing on interest margins, coupled with rising competition in the mortgage market.
It is understood Lloyds wants to fuel future growth by providing wealth and retirement services to its retail customer base, capitalising on its position as the UK’s only integrated high street bancassurer.
Mario Mazzocchi, a pensions and investment director at Lloyds’ Scottish Widows business, told the FT: “Lloyds Banking Group is in a unique position to offer financial planning, retirement and long-term savings solutions to retail customers and we expect demand for these products to grow, driven by a number of factors, including the introduction of pension freedoms, auto-enrolment and a shift from defined benefit to defined contribution pension schemes to name a few.”