Lloyds Banking Group have revealed that they plan to launch a new personal pensions and investment arm worth an impressive £100 billion. The move comes as an attempt to challenge online fund managers such as Hargreaves Lansdown who already offer similar services.
Lloyds’ chief executive and head of wealth and insurance, Antonio Lorenzo, said that “more than £10 billion” flows out of Lloyds and into online personal pension providers each year.
Lloyds currently handle just 3% of the direct-to-consumer pensions and investment market. They aim to increase this number to 10% in as little as three to five years.
Lloyds have already taken the first steps towards challenging the competition
The bank started their journey by recently acquiring the retirement website Embark Group, giving Lloyds around £60 billion in assets. Their goal is to have more than £100 billion worth of assets in the near future.
They hope to use the technology they have acquired from Embark Group to create a robo-advisor and SIPP platform to challenge their competition.
In fact, Lloyds already have their foot in the pension door, since they own both insurance and pensions provider Scottish Widows and employee pension provider Zurich.
They are also poised to challenge on the investment fund front, given that they currently operate DIY investing platforms iWeb and Halifax Share Dealing.
The new SIPP and investment services are set to be available through the Lloyds Bank Mobile Banking app upon their release. This will allow their customers to easily move their money from current accounts to retirement and investment products all in one place.
The Lloyds app already has nearly 18 million users, since they deal with a large percentage of the market share in retail banking. The move could also persuade many of these customers to switch back to Lloyds because of how much easier it is to manage your finances if they’re all managed by the same provider.