Aegon has said it is planning to drum up more business from platform fees and move away from insurance products as assets on its platform passed £10bn in the third quarter of 2016.
The provider’s results today show that Aegon moved €1.5bn (£1.32bn) of client assets from its backbook onto its platform between July and September, taking total assets to £11.2bn.
Having announced both the acquisition of Legal & General owned platform Cofunds and BlackRock’s defined contribution pension platform business this year, Aegon’s UK chief executive Adrian Grace says that the firm has set out its stall to move to a more platform orientated business.
Grace says: “We’re now in a period of transition as we move from being a business whose earnings are driven by traditional insurance products like annuities, to one that generates revenues via platform fees and this process will accelerate as the integrations gather pace.”
“The [Cofunds] acquisition will give us the scale that is so critically important in the platform market. There was a time when the market thought £30-£40bn might be enough to be competitive over the long-term, but that figure now looks closer to £50-60bn. We’re expecting the deal to complete by the end of the year and we will provide further details then. We recognise that our success will depend on getting the integration right for the advisers and customers who use the platform and our plans will be built around meeting their needs.
Worldwide, Aegon’s underlying earnings before tax were €461m in the third quarter of 2016, up from €435m in the second quarter, but down 7 per cent from €495m for the same period last year.
Over the year to date, comparative earnings are down from €1.43bn to €1.36bn.