Lloyds Banking Group has announced it is buying investment and retirement platform Embark for £390 million.

The acquisition will enable Lloyds to “re-platform” its pensions and retirement platform and address the mass market and self-directed wealth segment, completing its wealth proposition.

The bank said the buyout would help the group deliver a “modern, industry-leading mass market, direct-to-consumer proposition,” completing its existing advice offerings via Schroders Personal Wealth and Cazenove Capital.

Lloyds is targeting a “top-three position” in direct-to-consumer self-directed and robo-advice business in the medium term. The group is also aiming to achieve a top-three position in the individual pensions and retirement drawdown market by 2025.

Lloyds added that the acquisition would enable it to achieve these goals.

"There's an ever-growing customer demand for clear, simple and affordable financial planning and retirement products and services,” said Antonio Lorenzo, chief executive, Scottish Widows and group director, insurance & wealth, Lloyds Banking Group. “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.”

The acquisition will see Lloyds acquire £35 billion of assets under administration on behalf of 410,000 consumer clients.

"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,” added Lorenzo. “We will 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."

Following the purchase, Lloyds plans to increase its Strategic Review 2021 net new money target from £25 billion to £40 billion by 2023, to reflect its increased growth potential.

"In eight short years, Embark has built one of the most respected and fastest growing digital retirement and savings businesses in the UK,” commented David Barral, chairman of Embark Group. “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."

Subject to regulatory approvals, the acquisition is expected to complete in the fourth quarter of 2021.

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