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Aegon caps platform charges and plans to add fixed fees

Aegon is introducing a cap on its platform charges for both new and existing clients as it sets out plans to introduce a fixed fee charging option next year.

Charges on its One Retirement platform will be capped at £750 annually while its Aegon Retirement Choices investment platform charges will be capped at £1,215 annually.

There will be no charge on assets over £250,000 on both platforms. The changes come into effect on 3 May.

Aegon says around 10 per cent of existing clients will see charges capped as a result and expects that proportion to grow.

Its basis point charge on the One Retirement platform also falls to 0.3 per cent for assets under £250,000. The current charge is 0.4 per cent on assets up to £100,000 and 0.35 per cent on assets between £100,000 and £250,000.

For the ARC platform, the first £29,999 will be charged 0.6 per cent, falling to 0.55 per cent for assets between £30,000 and £49,999, then to 0.5 per cent for assets between £50,000 and £99,999, then 0.45 per cent for assets between £100,000 to £249,999.

Aegon adds it expects to introduce a fixed fee charge for new clients in 2015.

Aegon and Cofunds have reduced platform charges in the wake of the Budget, with Aegon becoming the first advised platform to introduce a cap on charges.

Charges on Aegon’s One Retirement platform will be capped at £750 annually while charges on the Aegon Retirement Choices investment platform will be capped at £1,215 annually.

There will be no charges on assets over £250,000 for both platforms. The changes come into effect on 3 May.

Aegon says around 10 per cent of existing clients will see charges capped as a result and expects that proportion to grow.

Its basis point charge on the One Retirement platform falls to 0.3 per cent for assets under £250,000. The current charge is 0.4 per cent on assets up to £100,000 and 0.35 per cent on assets between £100,000 and £250,000.

For the ARC platform, the first £29,999 will be charged 0.6 per cent, falling to 0.55 per cent for assets between £30,000 and £49,999, then to 0.5 per cent for assets between £50,000 and £99,999, then 0.45 per cent for assets between £100,000 to £249,999.

Aegon adds it expects to introduce a fixed fee charge for new clients in 2015.

Following the pension flexibilities announced in the Budget, Aegon is also reducing its minimum investment amount for drawdown from £50,000 to £20,000.

Aegon investment director Nick Dixon says: “The budget is a game changer. It is a catalyst for saving and pensions saving in particular. We wanted to reduce charges and improve access with smaller minimum investment amounts.”

Separately, Cofunds has reduced its pension drawdown charges on the platform, including removing its pension account annual admin charge. The charge was £150 for assets up to £100,000, tiered down to no charge on assets over £200,000.

The drawdown set-up fee has reduced from £120 to £100, while its annual drawdown charge has dropped from £150 to £120.

It will now charge £100, down from £150, to review clients income limits under capped drawdown.

The charge for switching out of capped drawdown and into flexible drawdown has also been reduced from £150 to £100.

All prices exclude VAT.

Cofunds chief executive David Hobbs says: “We have long believed that pensions should be at the heart of the overall platform proposition as part of a range of fund and wrapper solutions – not an add-on. We feel this is the right move to make, particularly in light of the Chancellor’s latest reforms affecting the retirement market.”

Aegon investment director Nick Dixon says: “The budget is a game changer. It is a catalyst for saving and pensions saving in particular. We wanted to reduce charges and improve access with smaller minimum investment amounts.

”The changes revitalise our One Retirement proposition, improving drawdown access and investment simplicity. It is especially rewarding for customers who want to consolidate their pension assets.” 

The Platforum managing director Holly Mackay says: “The anticipated post-Budget reforms thrust Aegon’s platform into the spotlight and one of the responses has been to introduce a capped fee. We watched earlier in the year as the direct platforms competed in a rather lukewarm price war, with some playing fixed fee and/or capped fee cards. 

“Today, over in Adviser Land, Aegon has thrown down a capped price gauntlet and we expect ensuing debate to be more about the pricing ‘how’ than the pricing ‘how much’. Watch this space for competitor reaction as platforms with relatively high pricing levels for customers with large pension pots evaluate their response and advisers ask the obvious due diligence questions.”

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  1. Rosie Dawn Chorus 9th April 2014 at 12:28 am

    That makes it simpler then. What a load of guff.
    Last desperate throw of the dice from the kings of AMD.

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