Lloyds Banking Group is set to acquire digital wealth business Embark Group in a deal worth £390 million, as it targets a top-three position in direct-to-consumer self-directed and robo-advice business.
The bank said that the acquisition of Embark, which remains subject to regulatory approvals and is expected to complete in the fourth quarter of 2021, will deliver a “modern, industry-leading mass market, direct-to-consumer proposition”.
It will also enable Lloyds to re-platform its pensions and retirement proposition.
Following the transaction, Lloyds Banking Group will acquire approximately £35 billion of assets under administration on behalf of 410,000 consumer clients.
Lloyds said that, as previously announced within its strategic review for 2021, it needs to meet more of its customers’ broader financial needs, “whilst retaining more of the c.£10 billion assets under administration which customers invest with third parties each year”.
Antonio Lorenzo, chief executive of Scottish Widows and group director, insurance and Wealth at Lloyds Banking Group said: “There’s an ever-growing customer demand for clear, simple and affordable financial planning and retirement products and services.
“Our acquisition of Embark will not only help us serve all of a customer’s financial needs in one place, but also sit alongside our existing partnerships which meet the more complex financial planning and investment requirements of mass-affluent and high net-worth customers through Schroders Personal Wealth and Cazenove Capital.”
Lorenzo added: “Through Embark’s technology, we will be able to increase the reach of our investment offerings for customers who are happy to manage their own portfolios, through modern, easy-to-use technology.”
The deal does not include the Rowanmoor SIPP and SASS administration business, which is being retained by existing shareholders.
“In eight short years, Embark has built one of the most respected and fastest growing digital retirement and savings businesses in the UK,” David Barral, chairman of Embark Group, added.
“The combination of Lloyds Banking Group’s financial strength and distribution reach, with the agility, digital capability and expertise of Embark, will provide the perfect opportunity to create a market-leading proposition for consumers, intermediaries and strategic partners.”