Lloyds’ intended acquisition of the investment and retirement platform business, and its ambitions on robo-advice, draws a parallel with M&G’s acquisition of the Ascentric platform, and its wealth management brand appointing Ignition Advice to develop a hybrid digital advice service.
An observation made by commentators is the heavy advertising and marketing costs faced by robo-advisers to acquire new customers.
But according to Lloyds’ 2021 strategic review, published in February, around half of UK adults have a relationship with the group, and it boasts 17.4m digital active users, making it the UK's largest digital bank.
Ben Hammond, platforms director at consultancy Altus, says: “There is an advice gap, particularly in the banking world.
“[Lloyds] have many millions of customers, but being one of the 'big four', if they can provide a simple-to-use proposition directly to their customers, underpinned by some digital advice with a decent platform in the background, they’re going to be filling a big gap that they have at the moment for a lot of their banking customers.”
But Holly Mackay, chief executive of financial website Boring Money, is not so sure. She says: “Most [banks and building societies] have an advice proposition for higher net worth individuals but have not been able to crack the conversion of more hesitant cash savers (with balances of less than £100,000) to investment solutions.
“Robo-advice has not been a success for banks so far who are seeing that if you build it, it doesn’t mean they will come. Technology and platforms are an important part of the equation but they won’t be the secret sauce of success. A top-three position will mean a radical rethink and a less product-centric, more service-focused approach.”
