Dow Jones
LONDON - Lloyds TSB Group PLC, a British banking company, has teamed up with Goldman Sachs Group of New York to offer services for Britain's growing emerging affluent market.
On Tuesday, Lloyds started a wealth management service called Create, which is to give clients access to Goldman's global brokering service, research, and initial public offerings. The service is aimed at Britons who earn more than $88,000 a year or have about $150,000 to invest.
The move came amid a major effort by British and international banking companies to beef up retail services to a group of affluent investors in Britain more attuned to investing in capital markets than fixed assets.
Lloyds said clients would be able to use Goldman Sachs' PrimeAccess service to trade equities on any major financial stock exchange, with full settlement and clearing services. The service, which will also consolidate financial products into a single account, is to start by midyear, Lloyds said.
"There's a lot more deployable cash than before," said James Johnson, a banking analyst at Credit Lyonnais Securities. Changing demographics, more inherited wealth, a shift in government policy toward self-provision, and growing awareness of the benefits of financial planning are contributing to the demand for managed investing services in Britain, Mr. Johnson said.
Lloyds is certainly not alone.
In a joint venture, Merrill Lynch & Co. and HSBC Holdings PLC are planning to launch a similar service in the United Kingdom this year as part of their global rollout of wealth management services for those with $100,000 to $500,000 to invest.
Having already launched in Canada and Australia, the venture, Merrill Lynch HSBC, offers U.K. clients access to its research, but in the next two or three months it will provide brokerage facilities and an investment and banking account.
Credit Suisse Private Banking also boasts a similar service, CSFBdirect, which is also available in Spain and Italy and offers brokering facilities and access to Credit Suisse First Boston Corp. research.
Morgan Stanley Dean Witter & Co. of New York is buying a British company that targets high-net-worth investors.
Jon Kirk, a banking analyst at the U.K. brokerage Fox-Pitt, Kelton Ltd., says the Goldman name could give Lloyds a slight edge over its competitors. "U.K. banks don't have the type of brand name that suits these kind of products," he said.
Goldman Sachs has also linked up with financial institutions in other European countries, such as Germany, Finland, Spain, and Italy, to offer access to its cross-border equity service.
