Aegon: ‘We’re not competing for distribution’

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Aegon chief executive Adrian Grace has suggested he will not be pursuing deals to buy up advice firms as the company focuses on the integration of Cofunds.

Grace has branded 2016 as a “game changing” year for Aegon, following its deal to buy Cofunds and the acquisition of BlackRock’s defined contribution platform.

He says: “A combination of factors including the pension freedoms, investment uncertainty and an increased demand for advice on transfers from defined benefit schemes is creating strong demand for financial advice.

“Against this backdrop our goal is to help advisers and other intermediaries meet this demand by offering the best tools and service and by not competing for distribution, we believe we’ll be successful.”

Aegon sold Positive Solutions in 2014 to Intrinsic in a deal worth £9.5m. It remains the parent company of Origen Financial Services.

Aegon completed its acquisition of Cofunds on 1 January, and has been meeting with advisers to discuss the next steps for upgrading the platform.

Grace says: “At the next advisory board meeting in March we’ll outline a roadmap detailing further information on timings for our technology upgrade approach. This will focus on extending functionality to both sets of users through an enhanced version of the Aegon platform which is under development. “Cofunds users will benefit from a reduction in paper and an integrated pension, for example, while Aegon users will benefit from features like pre-funding and debit card transactions.”

He says the challenge for the wider platform industry is to improve user experience while keeping pace with “relentless” regulatory change.

He says: “Platforms have had to contend with the RDR and pension freedoms in particular and as a result investment has focused to a large extent on remaining compliant and just keeping up with the changes. This has meant underinvestment in user experience across the board.

“The next big challenge for our industry is to invest in the user experience while continuing to keep pace with regulation, which will no doubt continue to evolve.”

In its latest results, the provider’s UK’s business has posted pre-tax earnings of £18.6m. The sale of its annuity business last year hit earnings from Aegon’s life arm but were offset by increased earnings from pensions.

Platform assets reached £13.4bn as at the end of last year, with net inflows of £1.9bn and including the transfer of 165,000 legacy clients onto the platform in 2016.

Protection sales also rose by 11 per cent.