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Aegon looks to platform business to bring in 80 per cent of profits

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Aegon’s is looking to generate between 80 and 90 per cent of its profits from its platform business within the next three to five years, according to UK chief executive Adrian Grace

Speaking to Money Marketing after the release of the providers third quarter results this morning, Grace acknowledged that the goal represented a “big shift” for the business.

Grace said: “We have been really clear we want to be out of annuities and into platforms…That’s a big shift from where we were in the business only a short time ago.”

He added that completing the acquisition of Legal & General platform Cofunds was “the first and most important thing” before deciding on any developments with regards to pricing or adviser service.

Grace adds: “We are not going to be drawn on are we going to cut fees. From my perspective we will do what we need to stay competitive.”

“What we have said up until this point is that we don’t see any changes to fee structures that are in place at this moment in time. Clearly as we become the scale player you get optionality. We will continue to look at the best way to give value to advisers on a going-forward basis.”

“Scale brings lots of benefits, particularly for customers, who are our advisers. It allows you to keep investing in technology, it allows you to keep pace with legacy and regulatory events, it allows you to be more automated.”

“From my perspective scale is a critical ingredient to stay in this market.”

The Cofunds deal is due to complete by the end of 2016. Grace would not provide an estimate as to how many advisers may opt to leave the platform as it changes ownership.

He says: “We have obviously made assumptions. The feedback I have got from the market is that advisers are more than happy to give us the opportunity. The opportunity to move to new technology, one of the best platforms in market, to move existing books across allows us the ability to do unique things for the proposition for Cofunds users.”

“We can’t do anything at the moment because we don’t own the business. From our perspective closing on the deal is the first and most important thing.”

“We have proved independently of Cofunds we can grow our business in a structured way.”

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  1. It’s not just a bit but extremely late in the game for self reinvention as a platform provider. The starting whistle was blown at least five years ago. AXA tried it and looks what’s become of their Elevate platform. Aviva are having a game stab at it but only succeeding by unsustainably low pricing. And opinions are pretty well finalised as far as CoFunds is concerned. The hard truth is that there are simply more platforms than there is appetite for them. People tend to stick to what they know and trust and, after all these years, persuading them to defect to an alternative is tough going indeed.

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