Advisers urge Aegon for heavy Cofunds investment


Advisers have registered a mixed response to Aegon’s acquisition of Cofunds with hopes the insurer will invest more in the platform than previous owner Legal & General, alongside price-hike concerns.

Aegon confirmed its purchase of Cofunds for £140m in its results announcement this morning. The deal means Aegon will be the biggest platform provider in the UK.

Chelsea Financial Services managing director Darius McDermott views the deal positively and hopes Cofunds will get the investment that was not delivered under L&G’s ownership.

McDermott says: “Cofunds had stagnated under L&G’s ownership. They certainly did not invest enough that was required to make it a market leading platform. We are confident and hopeful that some of the product and technology enhancements that Cofunds has needed for a number of years may now be delivered.”

Investment Quorum chief executive Lee Robertson considers whether Aegon invests in Cofunds depends on if it wants to keep it as a platform.

He says: “If they want to have it as a platform they will have to because it has become old technology. If they want to move assets into stuff they have already got then it will be a question of whether they run it down and migrate the assets or whether they put some momentum behind Cofunds and put some money into it.”

Informed Choice managing director Martin Bamford adds: “I don’t think companies splash that much cash on a deal unless they have got a genuine intention to invest and improve.”

However, he says migrating assets is no small task and involves a lot of work for advisers in having to confirm ongoing suitability.

Bamford explains: “We have between £12m and £15m of assets on Cofunds. In respect of those assets, we will be writing to those clients, probably having to phone up to check they are happy with the migration and in some cases move them to an alternative.”

Bamford is concerned prices might also rise for Cofunds customers.

He explains: “With scale comes the option to reduce prices so the customer pays less but, at the same the deal will be expensive. The first few years if they are investing in the platform it could mean higher prices for Cofunds customers. I suspect many of them, particularly the advised ones, won’t have an appetite to pay more and there are other lower cost platform options out there.”

But Cofunds chief executive David Hobbs says there is “no intention” for charges to go up, adding fees may fall in the future.

He also plays down the impact on advisers.

He says: “The level of disruption will be relatively light but recognises there will be some new ways of working for advisers. At its heart Cofunds has always been an intermediated business and is well respected in terms of how it works with advisers.

“We haven’t always had the proposition that matches people’s needs, but when I meet advisers they are always highly complementary about our engagement and that counts for an awful lot.”


Platforum head of intermediary research Miranda Seath

Platforum: Cofunds deal is shrewd but Aegon has to win over advisers

After a prolonged period of uncertainty, Aegon’s acquisition of Cofunds is good news for Cofunds users and good news for the industry. Whilst the sale of Cofunds for £140m represents a £65m net loss for Legal & General, it is in line with L&G’s stated strategic intent to focus on its corporate assets. Some might […]


Aegon confirms £140m deal for Cofunds

Aegon is to buy L&G-owned platform Cofunds for £140m, becoming the biggest platform provider in the UK. Money Marketing first revealed Aegon had made a verbal agreement to acquire Cofunds in February. The deal, announced this morning in Aegon’s results, ends months of speculation and will create a platform with assets under administration of around […]


Aegon closes in on Cofunds deal

Aegon has reached a verbal agreement on a deal to purchase L&G-owned platform Cofunds, Money Marketing understands. In addition, it is understood Capita and platform technology provider Bravura are working on their own joint bid for Cofunds. The move follows months of speculation over the platform, which in September last year Money Marketing revealed had […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. AEGON have a platform built by the same company that built the Novia Platform, it is cheaper than the CoFunds platform and delivers more, so I suspect there lies the answer as to future plans… the question is can AEGON in partnership with those advisers and their clients create a smooth transition… AEGON’s record with past acquisitions is not too good… but if they get it right it could be a brilliant acquisition with the right personnel in place to manage it…

  2. AEGON have spent the last few years upgrading their own internal book to their platform. The process was not very smooth to begin with, but by the end it was very easy to take an older style contract and move it to the platform.
    As mentioned, they use a different technology provider to Cofunds. Rather than run two lots of tech, I suspect they will use their experience of upgrading their existing book to run a similar process for existing Cofunds clients.
    Of all the criticisms that can be levied at AEGON, their platform is not one of them. I suspect that existing Cofunds clients will see huge improvements in the technology they have been used to as well as the options available to them.
    This is very positive news for both companies, advisers and clients.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm