"This is a big victory for Standard Life Aberdeen, and a serious setback for Lloyds’ new foray into wealth management."
The assets were formerly managed by Aberdeen on behalf of Lloyds, prior to the merger with Standard Life.
Following the merger, Lloyds gave notice it was terminating the agreement early on the basis that the combined Standard Life Aberdeen was now a material competitor.
Standard Life Aberdeen appealed the decision, and today announced an arbitration panel has ruled in its favour.
Laith Khalaf, senior analyst at Hargreaves Lansdown, commented: "This is a big victory for Standard Life Aberdeen, and a serious setback for Lloyds’ new foray into wealth management.
"While this is relatively low margin business for Standard Life Aberdeen, it’s clearly a large sum of money, and against a backdrop of fund outflows, will be particularly well-received. A big part of the rationale for the merger between Standard Life and Aberdeen was built on scale, which £100 billion of assets clearly speaks to.
"Lloyds has already ear-marked the lion’s share of these assets to form the basis of its new joint venture with Schroders, and has also hired Blackrock to manage some passive strategies.
"Negotiations will now begin between Standard Life and Lloyds to find some sort of resolution. This could involve Standard Life Aberdeen remaining as manager of the assets until 2022, or Lloyds stumping up some cash for breaking the agreement early.
"We think there could even be a bit of mix and match, where Lloyds pays to release some assets to get its joint venture with Schroders up and running, while leaving some funds with Standard Life Aberdeen. We’ll be watching for further details as and when negotiations are concluded."
