LONDON, October 2, 2025 – Lloyds Banking Group (LLOY.L) will acquire Schroders’ (SDR.L) 49.9% stake in their joint wealth management venture after the business missed growth targets.
The move signals Lloyds’ commitment to expanding its wealth management services while highlighting the challenges facing traditional asset managers in the competitive UK retail investment market.
- Lloyds taking full control of Schroders Personal Wealth venture
- Joint venture launched in 2019 struggled with growth targets
- Deal ends six-year partnership between banking and asset management giants
Market Context
The dissolution of Schroders Personal Wealth reflects broader pressures on UK wealth managers competing for mass affluent clients1. The venture, established in 2019, was designed to leverage Lloyds’ customer base with Schroders’ investment expertise to target clients with assets between 25,000 and 500,0002.
Both companies have faced headwinds in recent years, with traditional asset managers losing market share to low-cost index funds and digital wealth platforms. Schroders shares have underperformed the FTSE 100 by approximately 15% over the past 12 months.
Venture Performance
Schroders Personal Wealth failed to meet the ambitious growth projections set when the partnership was formed six years ago3. The business struggled to gain traction in the highly competitive UK wealth management sector, where fintech disruptors and established players vie for middle-market clients4.
Industry analysts said the venture’s underperformance reflects the difficulty of combining banking distribution with asset management expertise. The mass affluent segment has proven particularly challenging as clients increasingly seek low-cost, digitally-enabled investment solutions.
Strategic Implications
For Lloyds, taking full control allows the bank to integrate wealth management more closely with its existing retail banking operations5. The move aligns with the bank’s strategy to diversify revenue streams beyond traditional lending as interest rate margins face pressure.
Schroders, meanwhile, can refocus resources on its core institutional asset management business and private wealth services for ultra-high-net-worth clients. The asset manager has been streamlining operations globally as it faces fee compression across its traditional fund management activities6.
Industry Outlook
The partnership’s dissolution underscores the evolving dynamics in UK wealth management, where scale and technology capabilities increasingly determine success7. Traditional joint ventures between banks and asset managers have faced mixed results as client preferences shift toward simplified, low-cost investment platforms.
Neither company has disclosed the financial terms of the transition, though industry sources suggest the deal values Schroders’ stake at below its original investment8. The transaction is expected to complete in early 2026, subject to regulatory approvals.
Not investment advice. For informational purposes only.
References
1“Lloyds and Schroders to end UK wealth joint venture, FT reports”. Reuters. Retrieved October 2, 2025.
2“Lloyds set to take control of Schroders wealth tie-up in ‘mass affluent”. Yahoo Finance UK. Retrieved October 2, 2025.
3“Lloyds and Schroders to abandon UK wealth joint venture”. Financial Times. Retrieved October 2, 2025.
4“Lloyds Weighs Taking Full Control of Schroders Wealth Venture”. Bloomberg. Retrieved October 2, 2025.
5“Lloyds and Schroders to give up on joint wealth partnership”. Citywire. Retrieved October 2, 2025.
6“Lloyds and Schroders to end UK wealth joint venture, FT reports”. BBC. Retrieved October 2, 2025.
7“Lloyds and Schroders to scrap UK wealth joint venture”. Financial News. Retrieved October 2, 2025.
8“Lloyds and Schroders to end UK wealth joint venture, FT reports”. Global Banking and Finance. Retrieved October 2, 2025.