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Cofunds loses £500m in assets amid sale uncertainty

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Cofunds has lost £500m of its retail assets as advisers switch away from the platform amid uncertainty over its sale, data from Platforum shows.

Estimated assets under administration data from Platforum shows a drop in assets from £37.5bn to £37bn over the first quarter of this year for Cofunds.

According to a Q1 adviser survey conducted by Platforum, 42 per cent said “commitment of the parent company” was a reason for transferring assets off any platform.

Miranda Seath, senior researcher at Platforum, says: “The continued uncertainty over the platform’s ownership is having a negative impact and we hope that a deal can be done soon.”

Cofunds parent company Legal & General put the platform up for sale last year. Plans for AJ Bell to purchase the business fell through last year after it failed to agree a deal with L&G.

Aegon has reached a verbal agreement on a deal to purchase Cofunds.

Of the advisers surveyed by Platforum that were transferring assets away from a platform, one quarter were transferring assets away from Cofunds.

Seath adds: “Poor performance in the markets could be a factor but there are indications that advisers that use the platform as a secondary or tertiary platform are transferring assets away.

“We asked advisers transferring assets away from a platform to tell us the drivers for doing so and service was the top reason, while just over 40 per cent said that commitment of the parent company was a factor.”

A spokesman for Cofunds says: “Our Q1 figures won’t be released until August in line with our parent Legal and General’s reporting timetable and we cannot comment on them due to city rules. Any ‘guesstimations’ therefore need to be taken with a pinch of salt and no one should draw any conclusions from them. We can say that we wrote over £4bn in retail new business during 2015.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Do these figures include the assets held by Rplan which uses the Cofunds facility?

  2. Has there been any update on AEGON’s ‘verbal agreement’ to buy the platform yet, as that was going back to February the last time it was reported (if I’m not mistaken).
    Also, I hate to find myself defending Cofunds as I have nothing good to say about the platform, but surely a drop in AUM by half a billion could be explained away by many things other than the worry about the platform selling, not least of course the performance of investments in the time period.

  3. @J

    Well I don’t know why you have nothing good to say about Cofunds. My only complaint is that L&G own it and therefore service (if you need it) is abysmal. Otherwise it is a good website and provides some really valuable features.

    You can do dated valuations. You can analyse every movement and payment for each client. You have a very good analysis feature which can comp[are several funds simultaneously, but in this case it shows the top ten funds of each fund on the same page. The volatility of each fund. The turnover, the beta and various other statistics not available on one sheet from other platforms.

    It was a good logical platform easy to use with very straightforward dealing and switching process. What’s not to like?

    The idea of AEGON owning it is depressing. The best service was when they were a reasonably independent entity (owned by a consortium of fund managers) and after the early days when there were horrendous teething problems, which to their credit they sorted. Everyone had a point of contact that was approachable and knowledgeable. Under L&G you were lucky if you got anyone to answer the phone and when they did they were most likely incapable of answering any question let alone spell L&G.

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