Lloyds Banking Group to acquire Embark for £390m

The sale will see Lloyds Banking group acquire some £35 billion of assets under administration on behalf of around 410,000 consumer clients within Embark Group

Lloyds Banking Group is acquiring Embark Group, one of the largest retirement solutions providers in the UK, for £390 million.

As part of the deal, all of the Embark brands will join Lloyds, the UK financial services organisation that runs Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows, except the Rowanmoor SIPP and SSAS administration business, which is being retained by existing shareholders.

Embark says its sale “presents a significant opportunity” to continue its rapid expansion, as a wholly owned subsidiary of Lloyds Banking Group.

Lloyds intends to invest in and support Embark’s proposition and service innovations for the intermediary sector. The wealthtech operates under the brands Embark, Advance, Horizon, Stocktrade, Vested and The Adviser Centre, and operates a wide portfolio of white label services to several markets, including wealth management, robo-advice, retail banking and workplace pensions.

Embark has grown significantly since its formation in 2013 as a digitally led retirement solutions business, enabled by its strategic partnership with asset servicing and technology provider FNZ and its ability to attract investment.

The Embark Group, including Rowanmoor, has more than £40.8 billion of assets under administration on behalf of more than 425,000 clients.

It achieved this by attracting billions of pounds of inflows and through the acquisitions of the advised and partnership books of Alliance Trust Savings, Zurich’s retail wealth platform and its five risk-rated Horizon multi-asset funds, which remain leading performers in their sectors.

The sale will see Lloyds Banking group acquire some £35 billion of assets under administration on behalf of around 410,000 consumer clients within Embark Group.

Jackie Leiper, managing director of pensions, stockbroking and distribution at Scottish Widows, will become chief executive officer of Embark on completion of the acquisition. Both are subject to regulatory approval.

David Barral, chair of Embark Group, comments: “In eight short years Embark has built one of the most respected and fastest growing digital retirement and savings businesses in the UK. The combination of Lloyd’s Banking Group’s financial strength and distribution reach, combined 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.”

Barral adds: “Rowanmoor, as a leading specialist SIPP, group pension trust, and SSAS administration provider, will become an independent standalone business.  It will have the ongoing support of existing shareholders who remain committed to the business, and will continue to work closely with partners and financial advisers to deliver excellent service and good outcomes for their customers.”

Antonio Lorenzo, chief executive of Scottish Widows and group director of insurance and wealth at Lloyds Banking Group, says: “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.”

“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. We’ll also be able to enhance our intermediary proposition, strengthen our offering in retirement and modernise the way Scottish Widows works with advisers, recognising the continued value of advice.”

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Mark Dugdale